RENEWABLE FUELS STANDARDS (RFS) CHALLENGES UNDER THE ENERGY POLICY ACT OF 2007

American Fuel & Petrochemical Manufacturers v. EPA (United States Court of Appeals for the District of Columbia Circuit, filed June 2012).  

In June 2012, the American Fuel and Petrochemical Manufacturers (AFPM) and the Western States Petroleum Association filed a lawsuit in the D.C. Circuit Court, challenging the EPA’s Renewable Fuels Standard (RFS) volume mandate decision for 2012. Specifically, it challenges EPA’s decision to require refiners to blend domestic fuel with cellulosic ethanol, an absolute volume mandate, or pay a penalty.  In April 2012, the court approved six biofuel trade groups, including the Renewable Fuels Association, Growth Energy, the Advanced Biofuels Association, the American Coalition for Ethanol, the Advanced Ethanol Council, and the Biotechnology Industry Organization, to intervene in the lawsuit in support of the EPA. 

The lawsuit was filed after EPA denied a petition from various petroleum groups asking for a waiver of the 2011 cellulosic fuel requirements under the RFS standard; EPA has the authority to grant a waiver when there is an inadequate supply of domestic biofuel. Petroleum groups have been opposed to the cellulosic biofuels portion of the RFS since it took effect in 2010 in part because they allege that significant amounts of the renewable fuel don’t exist.  The lawsuit alleges that in denying the waiver, the EPA is essentially implementing a hidden fuel tax to consumers because it forces refiners to purchase credits representing a fuel that is not yet commercially available.  In denying the petition, the EPA said that the organizations had ample opportunity to raise their arguments in response to the two notices of proposed rulemaking but failed to do so.  This is case is currently pending.