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Biofuel industry, ag commodities take a hit from U.S. Supreme Court ruling

WASHINGTON, DC – In a decision with far-reaching consequences into ag country, the U.S. Supreme Court ruled Friday against biofuel, corn and soybean producers when it overturned a 2020 appeals court decision that had given the Environmental Protection Agency (EPA) the authority to limit the number of  blend exemptions that were granted to oil refineries.

The U.S. Renewable Fuel Standard,(RFS) was created under the Energy Policy Act (EPAct) of 2005, and established the first renewable fuel volume mandate in the United States.  The RFS dictates the amount of renewable fuel to be blended into gasoline. Oil refineries are required to blend billions of gallons of biofuel into the nation’s fuel pool or buy credits from those that do. Oil refiners can apply for exemptions to the requirement (the focus of the Supreme Court case) if those refineries can prove the requirements cause them financial harm.

The biofuel industry represents another marketing outlet for corn and soybean producers and an alternative source of energy.  Biofuels are made from an increasingly diverse mix of resources such as dcorn and soybean oil, animal fats, and recycled cooking oil. A coalition of biofuels groups and ag organizations are voicing disappointment in the U.S. Supreme Court ruling.

Kurt Kovarik, National Biodiesel Board (NBB) vice president for federal affairs, stated, “The Supreme Court decision is dismaying because it leaves uncertainty about when EPA may offer exemptions to small refineries.”

He added, “These exemptions harm biodiesel and renewable diesel producers when they reduce demand for advanced biofuels.” He continued, “EPA has provided multiple ways for refiners to meet the Clean Air Act’s RFS requirements, including an outsized bank of reserve Renewable Identification Number credits. ”

NBB is the U.S. trade association representing the entire biodiesel and renewable diesel value chain, including producers, feedstock suppliers, and fuel distributors.

The hope now is that the EPA under the Biden administration will discontinue what biofuel and commodity organizations contend has been a flagrant abuse of the oil refinery exemption program under the former Trump administration.

The U.S. biodiesel and renewable diesel industry supports 65,000 U.S. jobs and more than $17 billion in economic activity each year.

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