The Environmental Protection Agency proposed Thursday to push back 2019 and 2020 compliance year deadlines for the Renewable Fuel Standard, citing uncertainty surrounding small refinery exemptions.
In a proposed rule that would have to be finalized by the incoming Biden administration, EPA is proposing to extend the 2019 compliance deadline for biofuel blending requirements for small refineries to Nov. 30, 2021, and an associated deadline for submission of attest engagement reports to June 1, 2022.
An extension is also proposed for the 2020 compliance year deadlines for "all obligated parties" which would be extended to Jan. 31, 2022, and June 1, 2022. But EPA said it would not be taking a position on 2019 small refinery exemption requests because of its involvement in a Supreme Court lawsuit.
Small refineries producing less than 75,000 barrels per day may apply for a small refinery exemption if they are concerned complying with the RFS would cause them undue economic harm.
"Due to the ongoing litigation, we take no position on the availability of SREs for the 2019 compliance year," the proposal read.
Renewable Fuels Association President and CEO Geoff Cooper sees that statement as a good sign.
“We’re hopeful it means EPA will not attempt to unlawfully grant midnight-hour SREs in the last five days of the Trump administration,” Cooper told Agri-Pulse.
Cooper said that while RFA doesn’t agree the EPA needs to wait as long as it is proposing, particularly for the 2020 compliance year the group does agree with EPA that the outgoing administration should refrain from any further action on the pending small refinery petitions.
Growth Energy CEO Emily Skor echoed Cooper's comments.
“What we heard today suggests that Mr. Wheeler is not going to take any further action on SREs," Skor told Agri-Pulse. "We certainly hope that’s the case, and that Mr. Wheeler doesn’t suddenly reverse course in the last few days of this administration.”
Interested in more news on farm programs, trade and rural issues? Sign up for a four-week free trial to Agri-Pulse. You’ll receive our content - absolutely free - during the trial period.
In the proposed rule, EPA said extending the deadlines is necessary because the 10th U.S. Circuit Court of Appeals decision is pending before the Supreme Court.
EPA said that since refiners who sought to rehear the Tenth Circuit Court case were denied a rehearing April 7, 2020, the decision was “not final until after the compliance reporting deadline for the 2019 compliance year that had already passed on March 31, 2020.”
“Because of the uncertainty both leading up to the March 31, 2020, deadline and of SREs going forward, we do not believe it would be appropriate to require small refineries to demonstrate compliance with their 2019 obligations pending ongoing appeals of the RFA decision,” EPA said.
Geoff Moody, vice president of government relations at the American Fuel and Petrochemical Manufacturers, said the deadline extensions were crucial.
“With the tremendous uncertainty around annual RFS volumes and other aspects of the program, it is prudent to extend compliance deadlines to allow companies to better manage their compliance strategies,” Moody said.
Kurt Kovarik, vice president of federal affairs at the National Biodiesel Board, said the original compliance deadline for 2019 passed on March 31, 2020 ,and many refiners collectively met the obligations on more than 183 billion gallons of fuel sold in 2019 regardless of any COVID impacts, according to EPA data.
"With this additional deadline flexibility, EPA should not grant the pending small refinery exemptions based on the COVID emergency; the agency must stick to analyzing the impacts of the RFS program itself,” Kovarik told Agri-Pulse.
The Supreme Court said last week that it would hear arguments on a case appealing the ruling issued last January by the 10th Circuit. The ruling struck down three SREs and created a new rationale for the EPA to follow in considering future waivers.
EPA has yet to act on 66 small refinery exemptions dating from compliance years 2020 to 2011, according to the agency’s dashboard.
The agency will hold an online public hearing Feb. 9 on the proposed rule. Comments on the proposed rule must be received by March 11.