Energy

Big Corn Sues EPA For Exempting Refineries From Buying Ethanol

REUTERS/Jim Young

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Jason Hopkins Immigration and politics reporter

Farm and ethanol organizations have filed a lawsuit over the Environmental Protection Agency’s recent decision to issue biofuel wavers to several refineries, the latest in an ongoing battle between big corn and big oil.

A coalition of different ethanol and farm organizations filed a lawsuit Tuesday in the U.S. Court of Appeals for the 10th Circuit in Denver that challenges the EPA’s decision to dole out waivers to three different refineries. The waiver frees three refineries — owned by CVR Energy and HollyFrontier Corp. — of abiding by mandates set out in the U.S. Renewable Fuel Standard. Plaintiffs include the National Corn Growers Association, the Renewable Fuels Association, the National Farmers Union and the American Coalition for Ethanol.

The Renewable Fuel Standard, enacted in 2005, is an annual mandate that requires transportation fuel to contain a certain amount of ethanol. The EPA, however, can offer exemptions to smaller facilities that produce under 75,000 barrels per day if they experience “disproportionate economic hardship.” (RELATED: Ted Cruz Looks For Middle Ground In Fight Between Corn And Oil Industries)

The lawsuit on Tuesday highlights the clashing interests of the corn and oil industries. Most refineries do not care for the biofuel requirement, calling it an expensive mandate they don’t need. Farm and ethanol companies counter that the mandate is essential for boosting demand for their products. Biofuel waivers have increased dramatically in recent years, to the chagrin of farm groups. The debate over the Renewable Fuel Standard (RFS) has fallen on President Donald Trump’s lap, with both groups lobbying the White House to act on their behalf.

Texas Sen. Ted Cruz has been an outspoken advocate on the RFS debate and has touted what he believes to be a “win-win” solution for both refiners and farmers.

The EPA needs to cap regulatory costs on Renewable Identification Numbers, the Republican senator said while speaking at a Capitol Hill press conference in April. RINs — serial numbers attached to biofuels that ensure oil refineries are fulfilling RFS requirements — have dramatically risen in costs. Cruz argues that capping these costs can save refiners money while still keeping demand for biofuels high.

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