National Biodiesel Board v. Environmental Protection Agency

843 F.3d 1010, 46 Envtl. L. Rep. (Envtl. Law Inst.) 20194, 83 ERC (BNA) 1861, 2016 U.S. App. LEXIS 22593, 2016 WL 7368626
CourtCourt of Appeals for the D.C. Circuit
DecidedDecember 20, 2016
Docket15-1072; Consolidated with 15-1073
StatusPublished
Cited by17 cases

This text of 843 F.3d 1010 (National Biodiesel Board v. Environmental Protection Agency) is published on Counsel Stack Legal Research, covering Court of Appeals for the D.C. Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
National Biodiesel Board v. Environmental Protection Agency, 843 F.3d 1010, 46 Envtl. L. Rep. (Envtl. Law Inst.) 20194, 83 ERC (BNA) 1861, 2016 U.S. App. LEXIS 22593, 2016 WL 7368626 (D.C. Cir. 2016).

Opinion

TATEL, Circuit Judge:

Petitioner, a trade association representing the domestic biofuel industry, challenges the Environmental Protection Agency’s decision to allow a group of Argentine biofuel producers and other companies to use certain recordkeeping practices in connection with sales of their *1013 product in the United States. Petitioner separately challenges the regulation, promulgated in 2010, pursuant to which EPA granted the Argentine application. Although this case implicates a pressing international issue — whether EPA is meeting its responsibility to protect against harmful global land-use changes resulting from our country’s demand for renewable fuels — we can resolve it on familiar terrain, Petitioner’s challenge to the 2010 regulation is untimely, and EPA’s decision to grant the Argentine application was neither arbitrary nor capricious, as it comports with agency regulations and rests upon the kind of highly technical judgments to which we owe agencies great deference.

I.

Established by Congress in 2005, the Renewable Fuel Standard (RFS) program requires transportation fuel — the kind used in cars and sold at gas stations — to include specific amounts of “renewable fuel” made from planted crops, trees, animal waste, algae, or other alternatives to traditional fossil fuels. Energy Policy Act of 2005, Pub. L. No. 109-58, § 1501, 119 Stat. 594 (codified as amended at 42 U.S.C. § 7545(g)). In 2007, Congress amended the program both to significantly increase use of renewable fuel and to ensure this increase would reduce greenhouse-gas emissions and thereby “lower the risk of climate change.” 75 Fed. Reg. 14,670, 14,799; see id. at 14,673, 14,843; Energy Independence and Security Act of 2007, Pub. L. No. 110-140, §§ 201-204, 121 Stat. 1492 (codified as amended at 42 U.S.C. § 7545(o)). Specifically, recognizing that demand for renewable fuels might spur land-use changes like deforestation, which exacerbate greenhouse-gas emissions and wreak ecological harm, Congress mandated that renewable fuel from planted crops come from agricultural land already cleared or cultivated prior to the 2007 statute’s enactment. 42 U.S.C. § 7545(o)(I)(i), See e.g., 75 Fed. Reg. at 14,692.

In order to accomplish this objective, Congress defined “renewable fuel” as “fuel that is produced from renewable biomass” and. -specified that “renewable biomass” means, as relevant here, “[planted crops and crop residue harvested from, agricultural land cleared or cultivated at any time prior to December 19, 2007, that is either actively managed or fallow, and nonforest-ed.” 42 U.S.C. §§ 7545(o)(l)(J), (o)(l)(I)(i).

To implement the RFS program, the statute directs EPA to “promulgate regulations to ensure that gasoline sold or introduced ' into commerce in the United States ... contains the applicable volume of renewable’fuel,” id. § 7545 (o)(2)(A)(i), including “compliance provisions applicable to refineries, blenders, distributors, and importers” of renewable fuels, id. § 7545(o)(2)(A)(iii)(I). Pursuant to that authority, EPA took the actions challenged herd.

Renewable fuel is made from plant material, known as feedstock, typically sent from farms to grain elevators, then to crushers, and eventually to fuel producers, who transform it into renewable fuel. Bio-fuel produced abroad and intended for use by domestic refiners — the subject of this litigation — is often sent from producers to importers, who then sell the renewable fuel for incorporation into domestic transportation fuel.

Under the RFS program, producers and importers of renewable fuel generate “Renewable Identification Numbers” (RINs)— codes that correspond to batches of fuel. See 40 C.F.R. §§ 80.1452, 80.1426. In turn, refiners. and importers acquire RINs to demonstrate that they have introduced into .the transportation-fuel supply the requisite amount of renewable fuel. 42 U.S.C. § 7545(o)(3)(B)(ii)(I); see 40 C.F.R. § 80.1405(c); Hermes Consolidated, LLC v. *1014 EPA, 787 F.3d 568, 572 (D.C. Cir. 2015) (describing the RFS program).

In 2010, EPA promulgated a final rule that imposes recordkeeping requirements on RIN-generating producers and importers in order to verify that crops used in renewable fuel production come from qualified land, ie., land in cultivation prior to December 19, 2007. 75 Fed. Reg. at 14,699-701; 40 C.F.R. § 80.1454. The Rule gives producers and importers three options. 40 C.F.R. §§ 80.1454(c)(1), (g), (h).

The first, individual tracking, requires producers or importers to keep, but not provide to EPA unless requested, (1) “[m]aps or electronic data identifying the boundaries of the land” where each type of feedstock was harvested, (2) “commercial documents showing the quantity of feedstock purchased from each area ... and showing each transfer of custody from the location where it was produced to the renewable fuel production facility,” and (3) records sufficient to verify that the feedstock came from land cleared or cultivated prior to December 19, 2007, such as sales records. Id. § 80.1454(c)(1).

The second option, aggregate compliance, excuses from recordkeeping requirements “any producer or RIN-generating importer” in a country subject to an approved aggregate compliance plan. Id. § 80.1454(g). A country is eligible for the aggregate compliance approach if EPA determines that its total amount of agricultural land is no higher than it was in 2007. See id. § 80.1457 (establishing the petition process for the aggregate compliance approach for foreign counties). United States domestic renewable-fuel producers are currently exempt from recordkeeping requirements based on EPA’s finding that total U.S. agricultural land has not exceeded its 2007 baseline. Id. § 80.1454(g). Only one foreign country — Canada—has sought and obtained an approved aggregate compliance regime. 76 Fed. Reg. 14,007.

A third option — the one at issue here — is the alternative tracking requirement. 40 C.F.R. § 80.1454(h). Under this provision, a “foreign or domestic renewable fuel producer or RIN-generating importer” can participate in an industry-funded program in which an “independent third party conduces] a comprehensive program of annual compliance surveys ...

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843 F.3d 1010, 46 Envtl. L. Rep. (Envtl. Law Inst.) 20194, 83 ERC (BNA) 1861, 2016 U.S. App. LEXIS 22593, 2016 WL 7368626, Counsel Stack Legal Research, https://law.counselstack.com/opinion/national-biodiesel-board-v-environmental-protection-agency-cadc-2016.