(Reuters) – US Supreme Court on Friday agreed to review a lower court ruling that severely limited the government’s powers to exempt small refineries from the national biofuel law, reigniting a longstanding dispute between the oil and corn industries.
The decision came after appeals from refiners who argued that the 10th district court’s decision last year unduly deprived them of a method to avoid the financial hardship granted by Congress.
According to the Renewable Fuel Standard, refineries must mix billions of gallons of corn-based ethanol and other biofuels into their fuel or buy credits from those who do – a law intended to help farmers and reduce dependence on foreign oil.
But even small structures under financial stress can ask for exemptions from the requirement, and the Trump administration has dramatically increased the number of such exemptions granted to the industry, angering biofuel producers who say the exemptions have reduced demand for their products.
After a challenge from biofuel industry groups, the 10th Circuit ruled last January that the US Environmental Protection Agency may only grant so-called small refinery exemptions to facilities that have received them continuously every year since 2010. That decision has cast doubt on the entire waiver program, as most refineries that have obtained waivers in recent years have not continuously guaranteed them
“We are disappointed with the Supreme Court’s decision to review the case, but we will continue to vigorously pursue a resolution of the damage small refinery exemptions do to the biodiesel industry,” said Kurt Kovarik, spokesman for the National Biodiesel Board.
The Fueling American Jobs Coalition, which advocates on behalf of the refineries, hailed the Supreme Court’s decision, saying the review comes at an “urgent time” for refineries hit by the economic downturn.
The court is expected to review the case in April and a ruling could take several months.
Reporting by Stephanie Kelly; Written by Richard Valdmanis; Editing by Leslie Adler