NEW YORK (Reuters) - A biofuels trade group asked a federal court on Tuesday to rule whether the U.S. Environmental Protection Agency violated the law in granting a growing number of small refineries exemptions from renewable fuel laws, according to a court filing.
The Advanced Biofuels Association (ABFA), which counts oil major BP Plc as a member, submitted a petition to review the agency’s waiver decisions in the U.S. Court of Appeals in Washington DC.
“ABFA members are concerned that Administrator (Scott) Pruitt is granting these exemptions in an arbitrary and capricious manner to undisclosed parties behind closed doors with no accountability for its decision-making process,” Michael McAdams, the head of the trade group, said in a statement.
The EPA did not immediately respond to requests for comment.
The lawsuit is the latest move in the biofuel industry’s fight with the EPA over the agency’s expansion of the small-refinery hardship exemption from the U.S. Renewable Fuel Standard (RFS).
The RFS requires refiners to blend increasing amounts of biofuels such as corn-based ethanol into the nation’s fuel each year or purchase blending credits from other companies - a policy intended to provide a boost to Midwestern corn growers, reduce pollution and cut fuel imports.
In the past, the EPA has issued between six and eight waivers from the RFS per year to refining operations of less than 75,000 barrels per day that can demonstrate they are struggling financially to comply.
The EPA has said it has granted more than two dozen waivers for 2017 but has declined to name the recipients. The surge in approvals comes after a federal judge in August said the EPA had been using criteria that was too strict in denying exemptions.
Biofuel groups say the EPA is using the court decision as a rationale to gut the RFS, and that some of the nation’s largest refining companies have secured exemptions.
Reuters reported in April that Andeavor, one of America’s biggest refining companies, which reported about $1.5 billion in net profit last year, was among companies that received hardship waivers. An Andeavor spokeswoman Destin Singleton declined to comment for that article.
The EPA also granted a waiver to a refinery owned by billionaire Carl Icahn, a former adviser to President Donald Trump, according to two industry sources briefed on the matter.
The EPA keeps the names of the recipients secret, arguing it is confidential business information.
Reporting By Jarrett Renshaw; Editing by Susan Thomas