EPA asks court to vacate, remand 3 SREs approved in January

By Erin Voegele | May 03, 2021

The U.S. EPA on April 30 filed a motion in the U.S. Court of Appeals for the Tenth Circuit asking the court to vacate and remand three small refinery exemptions (SREs) approved by the Trump administration on Jan. 19, the day before President Biden’s inauguration.

The Renewable Fuels Association on Jan. 20 filed a petition for review and an emergency motion to stay the effectiveness of the three SREs with the Court of Appeals for the D.C. Circuit. The court on Jan. 21 granted the administrative say requested by RFA. Sinclair later confirmed that its Wyoming refineries were the recipients of the three SREs, and the proceedings were moved to the Tenth Circuit Court of Appeals, according to RFA. Sinclair filed a new petition for review on March 15.

In its April 30 motion, the EPA said the agency “did not analyze determinative legal questions regarding whether Sinclair’s refineries qualified to receive extensions of the small refinery exemption under controlling case law established by” the Tenth Circuit Court of Appeals in its January 2020 ruling on SREs, “and there is substantial uncertainty whether, if EPA performed such an analysis, it could grant the petitions submitted by Sinclair.”

In its motion, the EPA notes that Sinclair has already retired the renewable identification numbers (RINs) necessary to demonstrate compliance with its 2018 and 2019 Renewable Fuel Standard obligations. The EPA said that remanding its decision with vacatur “would preserve the status quo ante by ensuring that the RINs that Sinclair already retired to demonstrate its small refineries’ compliance with their 2018 and 2019 compliance obligations remain retired while EPA reconsiders Sinclair’s exemption petitions.”

The RFA has spoken out in support of EPA’s court request. “We strongly support EPA’s request for vacatur and remand of these three midnight-hour exemptions that were handed out to Sinclair in the waning moments of the Trump administration,” said Geoff Cooper, president and CEO of the RFA. “If allowed to stand, these improperly granted exemptions would have erased demand for another 260 million gallons of low-carbon renewable fuels, undermining the rural communities that depend on a strong RFS. We are greatly encouraged by EPA’s actions, which are consistent with President Biden’s commitment to stem the tide of unwarranted refinery exemptions and put the RFS back on track.”

Growth Energy also welcomed news of the EPA’s motion. “EPA is addressing the previous administration’s mishandling of the SRE program, including the midnight-hour grants of three SREs to Sinclair,” said Emily Skor, CEO of Growth Energy. “We are hopeful that EPA will continue to rein in the SRE program to achieve its limited purpose and ensure that the RFS advances the biofuels industry today and in the years to come.” 

The American Coalition for Ethanol expressed hope that the EPA plans to get the RFS back on track. “Ahead of Trump EPA’s hasty approval of these three SRE requests, ACE sought assurance from the EPA Inspector General that any last-minute SREs complied with federal law,” said Brian Jennings, CEO of ACE. “We're glad to see EPA is trying to right this wrong by asking the court to vacate the waivers and hope this action is one of many steps the Agency plans to make to get the RFS back on track.”