President Trump’s Denial of “Gap Year” RFS Refinery Exemption Requests is Great News for Biofuels Producers, Farmers, and RFS Integrity
September 14, 2020
Long Term Impact is Significant Under 10th Circuit Court Ruling
Contact: Cassidy Walter
JOHNSTON, IA – Today the EPA announced it was denying so-called “gap year” RFS refinery exemption requests for compliance years 2011 through 2018. These requests were a transparent attempt by some oil refiners to “end run” a recent decision by the 10th Circuit Court that limited EPA’s ability to grant RFS exemptions once a refinery has completed its transition to full RFS compliance.
In response, Iowa Renewable Fuels Association Executive Director Monte Shaw made the following statement:
“This is outstanding news for biofuels producers, farmers, and RFS integrity. Today’s action by the Trump EPA short circuits a blatant attempt by some oil refiners to skirt the RFS law. With gap year waivers denied, the number of refiners eligible to even apply for – let alone receive – an RFS exemption going forward is reduced to single digits. As long as the Trump EPA applies the recent 10th Circuit Court ruling nationwide, a ruling they have officially accepted by default given their decision not to appeal it to the Supreme Court, the long RFS refinery exemption nightmare should be over.
“By this action, 2019 will be the first compliance year when the RFS was actually enforced at statutory levels, including 15 billion gallons of conventional biofuels like ethanol. We are grateful for President Trump taking this action after hearing from farmers and our elected champions. A special debt of gratitude is owed to Sen. Joni Ernst who publicly pressed this very issue with President Trump during his trip to Iowa on Aug. 18. Assuming the 10th Circuit Court directives for the remaining RFS exemption requests are followed, President Trump is on track to uphold his promise to Iowa voters to protect the RFS.”
One of the key findings of the 10th Circuit Court was that the RFS law clearly created a refinery exemption process designed to allow for a transition to compliance with the RFS. Exemptions are not an on-gain, off-again switch. In other words, after the initial automatic exemption for “small” refiners provided by the RFS law ended, the “small” refinery could request an extension of the exemption based on demonstrating economic harm. But once a refiner no longer had an exemption, they are not eligible to request an extension because there is nothing to extend. They have completed their transition to the RFS.
That is important because the “gap year” requests were an attempt to end run the Court decision, to reestablish a continuous line of exemption extensions, thereby making the refineries eligible to ask for additional exemptions in future years. The petroleum industry itself has said that there are likely only 2-3 truly small refineries that still have a continuous line of exemption extensions.
While more than 30 exemption requests from 2019 and 2020 have still not been adjudicated, under the 10th Circuit Court ruling (that the Trump Administration just chose NOT to appeal) all but 2-3 are ineligible for consideration and should ultimately be denied.
The Iowa Renewable Fuels Association represents the state’s liquid renewable fuels industry and works to foster its growth. Iowa is the nation’s leader in renewable fuels production with 43 ethanol refineries capable of producing over 4.5 billion gallons annually – including 34 million gallons of annual cellulosic ethanol production capacity – and 11 biodiesel facilities with the capacity to produce nearly 400 million gallons annually. For more information, visit the Iowa Renewable Fuels Association website at: www.IowaRFA.org.