Court Rules that EPA Erred in Denying RFS Hardship Exemption

By Jarrett Renshaw, Reuters.

NEW YORK (Reuters) - The U.S. Environmental Protection Agency used too strict of a test when it denied Sinclair Oil Corp's request for an exemption from the country's biofuel regulations, a U.S. appeals court ruled on Tuesday. 

The ruling could broaden the rules governing such exemptions and force the EPA to grant more of them under the Renewable Fuel Standard program, which requires that refiners blend biofuels like ethanol into their fuel pool or buy credits from those who do. Refiners of all sizes have complained for years that the program was too costly and threatened the viability of U.S. plants. 

The EPA ruled that Sinclair did not qualify for a hardship waiver for small refiners, with capacity of less than 75,000 barrels per day, as the Salt Lake City, Utah-based company's two Wyoming plants were profitable and would not be forced to close if they were in the program. 

The EPA granted 29 annual exemptions under the program from 2013 through the end of 2016, the agency said in June.