November 14, 2018 / 4:08 PM / a month ago

Biofuel groups ask federal judge to freeze U.S. refinery waiver program

NEW YORK, Nov 14 (Reuters) - A group representing biofuel companies asked a federal judge on Tuesday to force the U.S. Environmental Protection Agency to stop exempting small refineries from renewable fuel laws until a lawsuit challenging the agency's actions is resolved.

Producers United argued, among other things, the EPA violated the law when it issued retroactive biofuel credits to HollyFrontier and Sinclair Oil this year as part of a legal settlement.

The EPA's decision, first reported by Reuters, lowers statutory renewable fuel mandates without any required public notice, the group alleges in the challenge, filed in U.S. Appelate Court in Washington.

Several biofuel organizations have brought similar lawsuits against the EPA related to small refinery hardship waivers, but Producers United is the first to ask a judge to freeze the program.

The group did not disclose its members.

The EPA declined to comment. "We don't comment on pending litigation," an agency spokesman said.

The U.S. Renewable Fuel Standard (RFS) requires refiners to blend biofuels like ethanol into their fuel pool or buy compliance credits from competitors who do. Refineries with a capacity less than 75,000 barrels-per-day can receive waivers if they prove compliance would cause them disproportionate hardship

The EPA, under President Donald Trump, has greatly expanded the waiver program, awarding 29 exemptions for the 2017 calendar year, up from 16 in 2016 and just seven in 2015, EPA data shows.

The EPA says lawsuits brought by HollyFrontier and Sinclair forced the agency to expand the definition of hardship, but biofuel groups say the shift was politically motivated and driven by former EPA administrator Scott Pruitt.

The EPA gave HollyFrontier nearly $34 million worth of credits for this year to reverse denial of a waiver for one of its Wyoming plants dating back to 2015. Sinclair received waivers worth undisclosed millions for two facilities in the same state for 2014 and 2015.

Both companies had challenged EPA’s denials in a federal appellate court in Colorado in 2016.

Producers United claims the EPA's expansion of the program was done largely in secret and must be legally scrutinized before it can be allowed to continue.

It also argues the judges in the Holly and Sinclair cases did not require the EPA to issue retroactive credits, nor did they say the refineries deserved to be exempted.

The EPA lacks the authority to issue the retroactive credits, the group argued.

The EPA is still considering one 2016 application for a hardship waiver, according to the group, which wants to ensure it does not result in more retroactive credits. (Reporting By Jarrett Renshaw; Editing by David Gregorio)

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