936 F.3d 628
D.C. Cir.2019Background
- The Clean Air Act’s RFS program requires EPA to set annual applicable volumes/percentage standards for nested renewable-fuel categories (total renewable, advanced, cellulosic, biomass-based diesel) and to assign ‘‘obligated parties’’ (refineries, blenders, importers, as appropriate).
- EPA historically placed the point of obligation on refiners and importers (2007; reaffirmed 2010) and implemented a RIN trading/banking system for compliance.
- In 2015–2016 EPA issued volumetric rules using waiver authority to reduce statutory volumes; petitioners argued those developments warranted revisiting the point of obligation.
- Petitioners sought rulemaking and mandatory reconsideration; EPA denied petitions in November 2017 after extensive comment, explaining changes would be disruptive and likely reduce renewable-fuel use.
- Multiple petitions followed: (a) Alon and other refiners challenged EPA’s 2017 denial of petitions to revise the 2010 point-of-obligation rule; (b) Coffeyville and others challenged the 2017 annual rule’s point-of-obligation scope, cellulosic projection, and waivers; (c) National Biodiesel Board challenged the 2018 biomass-based diesel volume as too low.
- The D.C. Circuit denied all petitions, upholding EPA’s jurisdictional posture and its substantive choices under deferential review.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Jurisdiction to review EPA’s denial of petitions to revise the 2010 point-of-obligation rule | Alon: EPA’s November 2017 denial is final agency action reviewable under 42 U.S.C. § 7607(b)(1); alternatively, 2014–16 volumetric action provided after-arising grounds | EPA: challenges to the 2010 rule are untimely unless after-arising exception applies; denial should be reviewed only via after-arising provision | Denial is reviewable as final agency action under §7607(b)(1); after-arising theory abandoned by petitioners and not necessary to reach decision |
| Mandatory reconsideration under §7607(d)(7)(B) | Petitioners: EPA’s 2014–16 statements gave rise to grounds after comment period so EPA was required to convene reconsideration | EPA: the mandatory-reconsideration provision is a limited exhaustion rule and does not extend the judicial-review deadline; petitioners failed to meet its narrow requirements | EPA properly denied mandatory reconsideration; provision does not enlarge the §7607(b)(1) filing period |
| Merits of EPA’s refusal to change point of obligation | Alon/Coffeyville: obligating refiners (not blenders) misaligns incentives, raises RIN costs, causes market dysfunction; EPA’s refusal was arbitrary | EPA: record evidence shows RIN costs are passed through; blenders don’t receive windfall profits; changing the point would increase complexity, market uncertainty, and could reduce renewable use | Court: review extremely deferential; EPA adequately explained and supported denial with studies and reasoned analysis; denial not arbitrary or capricious |
| 2017 cellulosic projection and use of cellulosic waiver | Coffeyville: EPA’s projection/methodology (heavy reliance on biogas forecasts, producers’ forecasts) is unreliable and inconsistent with EIA; waiver reductions to advanced/total volumes were arbitrary | EPA: used updated methodology, compared and respected EIA estimates where applicable, disclosed industry-supplied data (with CBI redactions), and reasonably exercised broad waiver discretion | Court upheld EPA’s projection and its partial use of discretionary cellulosic waiver as reasonable and consistent with precedent |
| 2018 biomass-based diesel volume & NBB standing | NBB: EPA set 2018 BBD volume too low (2.1B vs requested 2.5B), improperly considered interactions with other categories; NBB claims injury from increased competition | EPA: considered statutory six factors, program implementation, and fuel-category interactions to balance support for BBD with fostering other advanced biofuels; NBB has associational standing | Court: NBB has associational standing; EPA’s selection of 2.1B was reasonable after factor-based analysis and not arbitrary |
Key Cases Cited
- Massachusetts v. EPA, 549 U.S. 497 (2007) (EPA denial of petition for rulemaking is reviewable agency action)
- American Petroleum Institute v. EPA, 706 F.3d 474 (D.C. Cir. 2013) (limits and review of EPA cellulosic projections)
- Monroe Energy, LLC v. EPA, 750 F.3d 909 (D.C. Cir. 2014) (RIN banking and obligated-party framework explanation)
- Americans for Clean Energy v. EPA, 864 F.3d 691 (D.C. Cir. 2017) (deference to EPA on cellulosic projections and waiver exercises)
- Natural Resources Defense Council v. EPA, 824 F.2d 1146 (D.C. Cir. 1987) (refusal to amend regulations is reviewable agency action)
- Chevron U.S.A., Inc. v. NRDC, 467 U.S. 837 (1984) (agency deference for statutory ambiguity)
- Motor Vehicle Mfrs. Ass'n v. State Farm, 463 U.S. 29 (1983) (arbitrary-and-capricious review standard)
- National Biodiesel Board v. EPA, 843 F.3d 1010 (D.C. Cir. 2016) (associational standing related to biodiesel market harms)