June 25, 2021 – Supreme Court Ruling here
The United States Supreme Court ruled 6-3 on June 25 2021 in favor of allowing refineries to receive extensions of renewable fuel standard RIN exemptions after their previous extensions had lapsed in the case of Hollyfrontier Cheyenne Refining LLC vs. Renewable Fuels Association.
Smaller refineres had been granted RIN renewable fuel blending exemptions under the Renewable Fuel Standard (RFS) due to market conditions making blending uneconomic. A lower court had ruled that exemptions which had lapsed could not be renewaed. The Supreme Court ruled that an exemption extension may be granted to a small refinery that received a hardship exemption in the past even if that exemption had lapsed, determining that continuity was not required to extend an exemption. The decision allows small refineries that are unable to meet the blending requirement due to market conditions to forgo blending for at least two years.
The RFS was established by Congress with the Energy Independence and Security Act of 2007. Formulated during a time of falling U.S. oil production, the RFS mandates blending requirements in the domestic fuel supply for biofuels, primarily corn-ethanol.
A lower cost renewable crude produced from non-foodstuff competing biomass would be of benefit to all refineries and consumers. Provision for renewable gasoline and diesel production versus lower performance ethanol too would encourage blending.
A better course of action for the EPA to encourage low carbon fuels would be to approve a RIN pathway for bio-intermediates that smaller refineries could instead use lower cost feedstocks, such as a renewable crude blend, to meet their RIN requirements. This would also help renewable fuel projects in reducing capital expenditures relating to crude distillation, a process that could be completed at existing refineries.