February 4, 2019 / 9:29 PM / 7 months ago

Biofuels group Growth Energy sues U.S. EPA over small refinery exemptions

FILE PHOTO: The U.S. Environmental Protection Agency (EPA) sign is seen on the podium at EPA headquarters in Washington, U.S., July 11, 2018. REUTERS/Ting Shen/File Photo

WASHINGTON (Reuters) - Biofuels group Growth Energy filed a federal lawsuit against the U.S. Environmental Protection Agency on Monday, challenging the agency’s renewable fuel mandate for 2019 as failing to address rising waived biofuel volumes.

“EPA’s inaction on addressing lost gallons due to small refinery exemptions in this rulemaking is a clear violation of law,” Growth Energy CEO Emily Skor said in a statement.

“In doing nothing to remedy these and other deficiencies, EPA has again failed to meet its statutory obligation to ensure that annual RVOs (renewable volume obligations) are met each year,” Skor said, referring to the formal name of the mandate the EPA must set out every year.

Under the U.S. Renewable Fuel Standard (RFS), oil refiners must blend increasing amounts of biofuels into their fuel each year or purchase blending credits from those that do, a policy that has helped farmers by boosting the market for ethanol and other biofuels.

However, small refineries can be exempted if they prove that complying would cause them financial strain, a system of waivers that has expanded significantly since Donald Trump became president in January 2017.

While refiners largely applaud the system, the increasing number of waivers has infuriated another key Trump constituency, the farmbelt, which argues the program erodes demand for biofuels.

EPA’s 2019 mandate - announced in late November - did not reflect the expanding waivers, a decision that an EPA official told Reuters was due to the fact the agency did not know what the total volume of exemptions for the year would be.

Opponents dismiss this argument, saying the agency could make an estimate.

“Today’s filing calls for greater accountability from EPA to ensure that every renewable fuel obligation is fulfilled as the law intended,” Skor’s statement said.

Reporting by Humeyra Pamuk; Editing by Sonya Hepinstall

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