U.S. Supreme Court Asked to Consider if EPA Must Make Annual Determinations on Placement of the Point of Obligation Under the RFS

Valero Energy Corporation and the American Fuel and Petrochemical Manufacturers (the petitioners) filed a legal brief with the United States Supreme Court asking whether the U.S. EPA is required to consider rulemaking petitions to change the point of obligation under the Renewable Fuel Standard (RFS). The point of obligation was established in a 2010 EPA final rulemaking. Since that time, the EPA has steadfastly rejected any petitions from stakeholders to move the point of obligation from refiners down to terminal position holders. The petitioners argue that the EPA must make a determination of whether it is appropriate to move the point of obligation during the agency’s annual rulemaking establishing renewable fuel obligations.

The Clean Air Act authorizes the EPA to move the point of obligation only if it is “appropriate” to do so and does not result in “redundant obligations.” In 2017, the EPA ruled that moving the point of obligation would result in no net benefits to the RFS program. The agency found that such a move would do nothing to increase the use of renewable fuels and would “be very disruptive to the program, and likely the fuels marketplace as well…” The petitioners told the Court that the EPA is refusing to reconsider the placement of the point of obligation based solely on its own convenience and not whether it is appropriate to do so based on the facts. The EPA’s response to the petition filed by Valero and AFPM is due February 3. The Court has yet to decide whether it will consider the petition.

From PMAA