SCOTUS Sides With Refiners on RFS

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LINCOLN, Neb. (DTN) -- The Supreme Court sided with refiners on Friday, ruling a federal appeals court made the wrong decision in January 2020 when it ruled the EPA mishandled three small-refinery exemptions granted to HollyFrontier and others.

In a 6-3 vote the Supreme Court said a small refinery that previously received an exemption may obtain an extension even if it saw a lapse in exemption coverage in a previous year.

Refining company HollyFrontier brought the question before the court this spring in an appeal of a ruling by the U.S. Court of Appeals for the 10th Circuit in Denver in January 2020.

That court found EPA acted improperly when it granted exemptions to three small refiners, including HollyFrontier, because they had not received exemptions in previous years.

The ruling by the Supreme Court is likely to determine how EPA grants similar exemptions going forward.

During oral arguments attorneys for all sides grappled over the meaning of "extension" when it came to SREs.

"The plain meaning of 'extension' does not require unbroken continuity," the court said in its opinion.

"Dictionary definitions contemplate the possibility of resumption after an interruption. Federal rules permit litigants to seek (and courts to grant) an 'extension' of time even after a lapse. And recent federal statutes provide an 'extension' of benefits that previously expired months or even years earlier. A different statutory context might make for a different outcome, for example, where Congress uses modifying language requiring an extension to be 'consecutive' or 'successive.' But the statutory context here confirms the best reading of subparagraph does not require unbroken continuity."

Growth Energy CEO Emily Skor said in a statement the court's decision does not change a ruling made by the U.S. Court of Appeals for the 10th Circuit.

"In the past, the biofuel industry has looked to the courts to halt abuse," she said. "Today, new leaders at the Environmental Protection Agency have shown a willingness to defend the RFS, most recently by reversing three improperly granted exemptions."

Todd Neeley can be reached at todd.neeley@dtn.com

Follow him on Twitter @DTNeeley



06/25/2021
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