Fewer Refineries Able to Get Biofuel Waivers Under Trump Plan

Jennifer A. Dlouhy

(Bloomberg) -- The Trump administration doesn’t plan to challenge a federal court ruling that dramatically curbs its ability to exempt oil refineries from biofuel-blending requirements, according to three people familiar with the matter.

Under a decision reached late this week by top administration officials, the Environmental Protection Agency will now apply that 10th Circuit Court of Appeals ruling nationwide, so that just a handful of U.S. refineries remain eligible for the valuable exemptions. The decision, which follows weeks of deliberations, was described by the people, who asked not to be named before a formal announcement.

At the same time, Trump administration officials will look for ways to blunt the economic blowback for refiners, though specific plans haven’t been prepared, the people said.

The decision comes as refiners of transportation fuels are already reeling because the coronavirus pandemic has ravaged global demand their products. At the same time, a crash in oil prices has obliterated the competitiveness of biofuels such as corn-based ethanol.

The administration briefly planned to file an appeal en banc -- asking the full 10th Circuit to rehear the case -- before a backlash from farming advocates and appeals from Iowa lawmakers. The EPA and Justice Department faced a March 24 deadline to file an appeal, after seeking more time to consider the matter.

Citing the coronavirus and the current market downturn, refiners have implored the Trump administration for emergency relief, including reducing biofuel-blending requirements nationwide. The EPA has authority under the Clean Air Act to pare annual blending requirements if it determines they “would severely harm the economy or environment of a state, a region or the United States.”

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