A U.S. federal court on Tuesday rejected a challenge from two oil refining companies appeal of a January decision overturning certain small refinery exemptions (SREs). The ruling effectively forces the Environmental Protection Agency to reduce the number of waivers it can grant to refiners exempting them from their obligations under the U.S. Renewable Fuel Standard (RFS).

On Jan. 24, a three-judge panel of the U.S. 10th Circuit Court unanimously found that EPA abused their authority when granting refinery exemptions. The original challenge was brought against EPA in May 2018 by the Renewable Fuels Assn. (RFA), the National Corn Growers Assn., the American Coalition for Ethanol and the National Farmers Union in response to the massive demand destruction caused by what the coalition said was the agency’s illegal and indiscriminate use of SREs.

“We are pleased the 10th Circuit Court acted so quickly to deny the refiners' baseless request for a rehearing,” RFA said in a statement following the request denial. “There was absolutely no need to revisit the courts’ clear and unambiguous ruling that EPA vastly exceeded its authority by granting illegal small refinery exemptions.”

EPA had been considering joining the court challenge but had been encouraged by the biofuel industry to allow the court’s findings to stand.

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“Now, EPA and the refiners need to accept the facts and move on. It’s time for EPA to immediately implement the 10the Circuit decision nationwide, starting with the pending 2019 petitions,” RFA added.

For the 2016-18 RFS compliance years, EPA issued 85 SREs, eroding more than 4 billion gal. of renewable fuel blending requirements. EPA is considering 25 pending petitions for 2019 exemptions.

“There are no excuses left for further delaying implementation of this important decision that helps restore integrity to the Renewable Fuel Standard. Now, more than ever, ethanol producers and farmers are counting on the RFS to provide market stability and certainty during an incredibly difficult and tumultuous time,” RFA said.