Small Oil Refiners Win Biofuel Case at Supreme Court

The High Court restored small refiners' exemptions from federal renewable fuel blending requirements.

June 28, 2021

Supreme Court

WASHINGTON, D.C.—The U.S. Supreme Court Friday overturned an appellate court ruling that had curbed the Environmental Protection Agency’s ability to exempt struggling small oil refineries from a federal law requiring them to blend increasing amounts of ethanol and other renewable fuels into their products, Reuters reports.

Ruling 6-3 in favor of the refineries in the case, HollyFrontier Cheyenne Refining LLC v. Renewable Fuels Association, the justices rejected a 2020 ruling by the 10th U.S. Circuit Court of Appeals that faulted the EPA for giving refineries in Oklahoma, Utah and Wyoming economic hardship extensions on waivers from the Renewable Fuel Standard under the Clean Air Act despite the refineries’ prior exemptions having expired. The biofuel industry groups had challenged the EPA’s flexibility to grant exemptions to small refiners. The case involved units of HollyFrontier and CVR Energy.

Justice Neil Gorsuch, who wrote the majority opinion, said “It is entirely natural—and consistent with ordinary usage—to seek an 'extension' of time even after some time lapse." Justice Gorsuch compared the extensions at issue to ones given in a contract whose terms had expired or a student who needs more time on a paper.

In a dissent, Justice Amy Coney Barrett, joined by justices Sonia Sotomayor and Elena Kagan, took issue with the interpretation of the word “extend.” The “EPA cannot ‘extend’ an exemption that a refinery no longer has,” Justice Barrett wrote.

Under the RFS program, refiners must blend billions of gallons of ethanol or other biofuels into their fuel products or buy Renewable Identification Number compliance credits, known as RINs, from refiners that do.

“We are pleased that our longstanding arguments were today validated by the Supreme Court," HollyFrontier Corp. said in a statement. The company urged the EPA to "immediately take action to make the RFS a workable program for U.S. refiners and consumers.”

The Iowa Renewable Fuels Association said it is "extremely disappointed" with the ruling but noted that the lower court had faulted the EPA's decisions on other grounds as well.

“We fully expect the Biden EPA ... to deny the vast majority of RFS exemption extension requests that are pending or that will be submitted in the future,” Iowa Renewable Fuels Association Executive Director Monte Shaw said.

A recent Convenience Matters podcast unpacked the alphabet soup of RINs and RFS. Listen to Episode No. 286, “RINs, RFS and EVs and What They Mean to the Fuels Sector.”

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