The Biobased and Renewable Products Advocacy Group (BRAG) helps members develop and bring to market their innovative biobased and renewable chemical products through insightful policy and regulatory advocacy. BRAG is managed by B&C® Consortia Management, L.L.C., an affiliate of Bergeson & Campbell, P.C.

On June 2, 2015, federal appellate judges decided that EPA's methodology for evaluating small refineries (those with crude oil throughput averaging 75,000 barrels or less per day) for exemptions from the RFS program was fair. Hermes Consol. LLC v. EPA, No. 14-1016 (D.C. Cir. June 2, 2015). Under the Clean Air Act (CAA), EPA is allowed to exempt small refiners from the annual blending requirements if compliance would cause ''disproportionate economic hardship." There was a blanket exemption available for all small refineries in 2011 that expired in 2013. The case was brought by Hermes Consolidated, LLC, doing business as Wyoming Refining Company, a small refinery that applied for exemption from the 2013 renewable fuel blending requirements but was denied after EPA made mathematical errors while evaluating financial hardship. The court has ordered EPA to reconsider the petition from Hermes Consolidated, LLC, but has upheld EPA's overall methodology for conducting small refinery exception analyses.


 

The U.S. Supreme Court issued a ruling on Monday, June 23, 2014, which upheld the authority of EPA to regulate carbon dioxide under the Clean Air Act (CAA), but with limitations. The Court held that EPA may require permits and carbon control efforts for large stationary sources that emit large quantities of carbon dioxide. The emission of certain quantities of other regulated greenhouse gas (GHG) emissions -- not carbon dioxide alone -- must trigger the requirements, however. The Court held that EPA went impermissibly beyond its authority to regulate carbon dioxide under the CAA when, under its "Tailoring Rule," the Agency raised the triggering thresholds for carbon dioxide regulation.


The biomass community has been weighing in on EPA efforts to determine how to account for bioenergy emissions under its Tailoring Rule. Despite this week's Supreme Court ruling, there are ongoing efforts to urge EPA to issue in final its biogenic carbon accounting framework for those bioenergy facilities that would trigger permitting and other carbon control requirements based on the levels of emission of regulated GHG emissions other than carbon dioxide. See related item below.
 


 

On April 29, 2014, in a 6-2 ruling, the U.S. Supreme Court upheld EPA's view in EPA v. EME Homer City Generation L.P., U.S. Nos. 12-1182 and 12-1183. The opinion is available online.


The decision reverses a 2012 ruling by the U.S. Court of Appeals for the District of Columbia Circuit, holding that EPA's Cross-State Air Pollution Rule (CSAPR) exceeded EPA's authority to regulate greenhouse gas emissions under the Clean Air Act (CAA). The CSAPR -- issued under the Obama Administration and which strengthened a similar rule issued in 2005 by the Bush Administration -- requires 28 upwind states to reduce power plant emissions to help downwind states achieve national ambient air quality standards (NAAQS).


The Supreme Court held that the EPA permissibly created the CSAPR, in part considering cost effectiveness. As such, it is within EPA's authority under the CAA to include within CSAPR its "Good Neighbor" provision requiring upwind states to help downwind states meet NAAQS and imposition of federal implementation plans (FIP) "after EPA has quantified the state's interstate pollution obligation." More information on the case and the Supreme Court's holding is available online.
 


 

On January 16, 2014, the U.S. Department of Justice (DOJ) announced that it has indicted two individuals in biodiesel fraud schemes worth more than $37 million. A copy of DOJ's press release is available online. James Jariv and Nathan Stoliar have been charged with 57 counts of conspiracy, wire fraud, false statements made under the Clean Air Act, obstruction of justice, and conspiracy to engage in money laundering. In one scheme, the two allegedly generated more than $7 million in fraudulent renewable fuel credits under the federal Renewable Fuel Standard (RFS), which were then sold to obligated parties that needed them to meet their annual renewable volume obligations (RVO) under the RFS. In another, they allegedly failed to provide the U.S. government with $30 million in renewable fuel credits.


This case is significant because it is the fifth major biodiesel Renewable Identification Numbers (RIN) fraud case since 2011. It comes at a time when (1) EPA is working to prepare in final its proposed RFS Quality Assurance Plan to avoid cases of RIN fraud; (2) the biodiesel industry is advocating for increased biodiesel RVOs over what EPA has proposed for 2014 and 2015; and (3) the biofuels industry is fighting to sustain confidence in the RIN market and the statutory RFS RVOs in all renewable fuel categories. It could provide RFS opponents, including many in the refining sector, an additional argument in their quest to repeal the RFS.
 


 

This week, three Members of the U.S. Senate Committee on Environment and Public Works (EPW), Senators David Vitter (R-LA), Mike Crapo (R-ID), and James Inhofe (R-OK), introduced the General Duty Clarification Act of 2013. The bill would direct the U.S. Environmental Protection Agency (EPA) to clarify standards for the Clean Air Act's General Duty Clause. EPA has used the ambiguity contained in the clause to regulate chemical plants. A copy of the bill is available online.


 

Renewable energy company Sapphire Energy, Inc. and Phillips 66 have entered into a joint development agreement designed to promote and facilitate the commercial production of Sapphire's algae-based crude oil, which will be made into fuels. According to Sapphire's press release describing the agreement, "the companies will work together to collect and analyze data from co-processing of algae and conventional crude oil into fuels. The goal is to complete fuel certifications to ready Sapphire Energy's renewable crude oil, called Green Crude, for wide-scale oil refining." Further, "under the agreement the companies will expand Sapphire Energy's current testing programs to further validate that Green Crude can be refined in traditional refineries and meet all of the Environmental Protection Agency's (EPA) certification requirements under the Clean Air Act." A copy of the press release is available online.