RFS must consider impact on biodiversity, court tells EPA

In a victory for environmental groups, a federal appeals court told the EPA to consider the effect of the ethanol mandate on endangered animals and plants. The ruling applied to the 2019 RFS but held implications for the agency’s development of the RFS for future years.

The U.S. Court of Appeals for the District of Columbia said the EPA should have, but failed, to consult with wildlife agencies while it was drafting the 2019 RFS because of the possibility of harm to endangered species. The agency had sufficient evidence, including its own 2018 Triennial Report, to show biofuel production encouraged conversion of uncultivated land into corn and soybean production with adverse effects on biodiversity, said the appeals court, in returning the 2019 RFS to the EPA “to reassess the rule in relevant part.”

“For reasons discussed, EPA’s determination that the 2019 rule would not affect listed species is arbitrary and capricious because it is contrary to the weight of evidence,” wrote Chief Judge Sri Srinivasan and Judge Judith Rogers. “Because EPA’s effects determination is defective, its decision regarding severe environmental harm, which rests on the same faulty analysis, is also arbitrary and capricious.”

The National Wildlife Federation, Sierra Club and Healthy Gulf argued that EPA should have consulted wildlife agencies such as the U.S. Fish and Wildlife Service rather than concluding on its own that the 2019 RFS would not affect endangered species – the “effects determination” in the court ruling – and there was no need to reduce the RFS to avoid severe harm.

The court also rejected challenges from ethanol makers and petroleum refiners to the 2019 RFS of 19.29 billion gallons, including 15 billion gallons of corn ethanol. The ethanol industry said the RFS was too low because it did not take into account exemptions awarded to small refineries. The oil industry said the RFS was set so high it caused severe economic pain.

Rogers wrote the DC Circuit’s unanimous decision against year-round sales of E15, issued on July 2. Merrick Garland, now attorney general, was on the circuit panel appointed to consider the latest case, Growth Energy, et al vs EPA, “but did not participate in the disposition of these consolidated cases,” said the court in a footnote.

“This decision states clearly what the National Wildlife Federation and others have been saying for years: That EPA and proponents within the biofuel industry have been ignoring the scientific record and even basic logic in continuing to claim the Renewable Fuel Standard has had no effect on land use or wildlife habitat,” said David DeGennaro of the NWF. “The court also finds that the agency has ignored its own statutory duties under the Endangered Species Act in order to perpetuate this falsehood. The EPA can, and must, do better.”

Biofuel groups emphasized the appellate court’s rejection of oil industry arguments. “The court saw right through the many specious arguments raised by the oil refiners in this litigation,” said the Renewable Fuels Association. Growth Energy said “it is long past time for refiners to move ahead with higher biofuel blends.”

The National Biodiesel Board lamented the appellate court did not force EPA to adjust the RFS to make up for small refinery exemptions. It said the RFS for 2021 and 2022 should “provide a strong signal of growth for advanced biofuels like biodiesel and renewable diesel and fully account for any small refinery exemptions it plans to grant.”

The appellate decision for Growth Energy, et al vs EPA, is available here.