July 16, 2025
Two major federal court decisions—one from the U.S. Supreme Court and the other from the D.C. Circuit Court of Appeals—are poised to significantly impact the administration and future direction of the Renewable Fuel Standard (RFS), EPA’s signature biofuel blending program.
Supreme Court Centralizes Refinery Waiver Disputes
In a 7–2 ruling, the U.S. Supreme Court determined that legal challenges over EPA’s denial of small refinery exemptions (SREs) must be heard exclusively by the U.S. Court of Appeals for the D.C. Circuit. The Court held that EPA’s mass denial of SRE petitions was rooted in a nationwide policy judgment—that most refiners can pass compliance costs to consumers—making the issue one of “nationwide scope or effect” under the Clean Air Act.
This ruling ensures consistent judicial review and avoids fragmented decisions from multiple regional courts. However, the Court also cautioned against agencies using consolidated Federal Register notices to manipulate venue, emphasizing the importance of substance over administrative form. In dissent, Justice Gorsuch criticized the majority for creating a vague standard that could lead to future venue disputes.
D.C. Circuit Upholds 2023–2025 Biofuel Mandates but Orders Environmental Revisions
In a separate 2–1 ruling, the D.C. Circuit upheld EPA’s record-high biofuel blending mandates for 2023–2025 but ordered the agency to revise key parts of its environmental analysis. Specifically, the court found that:
- Greenhouse Gas Analysis: EPA improperly relied on a dated 2010 study despite acknowledging more recent emissions data was available.
- Endangered Species Impact: The U.S. Fish and Wildlife Service must revisit its conclusion that the mandates would have “no effect” on endangered species, especially when other agencies noted potential impacts.
Despite these flaws, the court allowed the mandates to remain in effect, citing the significant disruption that vacating them would cause now that compliance deadlines for 2023 and 2024 have passed.
The ruling rejected broader arguments from both environmental advocates and oil refiners. It upheld EPA’s authority to project growth in cellulosic biofuel output and structure compliance mechanisms. It also dismissed claims from refiners that EPA underestimated environmental and economic harms, and from biofuel trade groups concerned with program design fairness.
Conclusion: What These Rulings Mean for the RFS and EPA
Together, these rulings reinforce EPA’s authority to administer the RFS while holding the agency accountable to legal and scientific standards. Centralizing refinery waiver disputes in the D.C. Circuit provides regulatory consistency, which biofuel advocates see as crucial to maintaining market confidence and demand. Meanwhile, the D.C. Circuit’s directive to revise outdated environmental assessments signals that the RFS must evolve with current data and ecological realities.
Looking ahead, EPA faces mounting pressure: to finalize newly proposed biofuel targets by November, to clear a years-long backlog of SRE requests, and to refine its environmental methodologies.
By Tori Reese, Compliance Advisor