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Americans For Clean Energy v. EPA

ELR Citation: 47 ELR 20094
Nos. 16-1005, (D.C. Cir., 07/28/2017)

The D.C. Circuit held that EPA erred in how it interpreted and used the “inadequate domestic supply” waiver in the Renewable Fuel Standard law when setting low renewable fuel volumes for 2014-2016. In December 2015, EPA promulgated a rule establishing volume requirements and the resulting percentage standards for the years 2014, 2015, and 2016 for all four categories of renewable fuel. Having concluded that the phrase “inadequate domestic supply” is ambiguous, EPA stated that it had interpretive authority to adopt a reading of the waiver provision that would best align with “the overall policy goals” of the Renewable Fuel Program. EPA concluded that the “inadequate domestic supply” waiver provision grants it authority not only to consider supply-side constraints affecting the availability of renewable fuel – such as renewable fuel production or import capacity – but also to consider demand-side factors affecting consumers’ desire or ability to consume renewable fuels. The plaintiff trade associations contended that the waiver authorizes EPA to consider supply-side factors affecting the volume of renewable fuel that is available to refiners, blenders, and importers to meet the statutory volume requirements, but does not allow the Agency to consider factors, such as distribution capacity, affecting the supply of renewable fuel available to ultimate consumers for use in their vehicles. The court agreed with the plaintiffs, holding that the waiver did not allow EPA to consider the volume of renewable fuel that is available to ultimate consumers or the demand-side constraints that affect the consumption of renewable fuel by consumers. The rule was remanded to the Agency for further consideration.