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COURT VACATES PRIOR ADMINISTRATION'S MIDNIGHT REFINERY EXEMPTIONS
Source: Renewable Fuels Assn news release

The Renewable Fuels Association today hailed an order from the U.S. Court of Appeals for the Tenth Circuit vacating three small refinery exemptions granted by EPA to Sinclair the day before President Joe Biden was inaugurated. The court's decision came promptly after EPA petitioned for the vacatur and remand of the exemptions on April 30 and Sinclair responded on May 18 that it did not oppose EPA's request.

The court order states that any further administrative proceedings on these exemptions must be "consistent with this court's decision in Renewable Fuels Association v. EPA," where the Tenth Circuit ruled that EPA may only extend pre-existing refinery exemptions, that EPA's exemption decisions must reconcile the agency's consistent findings that all refineries recover the costs of compliance with the Renewable Fuel Standard, and that EPA may only use hardship caused by the RFS to justify granting exemptions.

"We're pleased that the court has vacated these improperly granted waivers and is sending them back to EPA for reconsideration," RFA President and CEO Geoff Cooper said.

"If these exemptions had been allowed to stand, they would have erased RFS blending requirements for 260 million gallons of low-carbon renewable fuels, destabilizing rural communities and taking a step backward in the fight against climate change. EPA did the right thing in April by requesting that these spurious exemptions be vacated, and we applaud the agency for honoring President Biden's commitment to putting an end to the surge of illegitimate refinery waivers," said Cooper.

Background
With less than 24 hours remaining before the inauguration of President Joe Biden, EPA on January 19 announced that three small refinery exemptions had been issued to unidentified refineries, letting those facilities out of their RFS compliance obligations for 2018 and 2019.

As noted in EPA's April 30 brief seeking a vacatur, RFA immediately filed a petition for review and an emergency motion to stay the effectiveness of the exemptions in the U.S. Court of Appeals for the D.C. Circuit, even though the identity of the refineries was unknown at the time. On January 21, the D.C. Circuit granted the administrative stay requested by RFA. Sinclair later confirmed that its Wyoming refineries were the recipients of all three exemptions, and the proceedings then moved to the Tenth Circuit.

In its April 30 filing, EPA said the previous administration "...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 this Court in Renewable Fuels Association v. EPA, and there is substantial uncertainty whether, if EPA performed such an analysis, it could grant the petitions submitted by Sinclair."

Notably, EPA's brief underscores that Sinclair has already retired the RINs necessary to demonstrate compliance with its 2018 and 2019 RFS obligations. Thus, vacating the three exemptions, as requested by EPA, would preserve stability in the marketplace "...by ensuring that the RINs that Sinclair already retired to demonstrate its small refineries' compliance with their 2018 and 2019 compliance obligations remain retired."


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