California Low Emission Ethanol Standards Upheld

California’s regulation of ethanol does not discriminate against out-of-state commerce, the 9th U.S. Circuit Court of Appeals held in a 2-1 vote Wednesday.

“We conclude that CARB’s stated purpose was genuine.  There was no protectionist purpose, no aim to insulate California firms from out-of-state competition,” said Judge Gould.

The decision was based on a facial challenge to the regulations.  The panel did send the case back to the district court to determine if the ethanol provisions may discriminate in practical effect.

“Unless or until either the United States Supreme Court or Congress forbids it, California is entitled to proceed on the understanding that global warming is being induced by rising carbon emissions and attempt to change that trend,” wrote Judge Ronald Gould.

In dissent, Judge Mary Murguia said the current version of the low-carbon fuel standard “facially discriminates against interstate commerce and California has failed to meet its onerous burdon of demonstrating that a nondiscriminatory version of the regulation could not achieve its legitimate local interest of reducing [greenhouse gas] emissions.”

California was allowed by Congress, under the Clean Air Act, to “blaze its own trail” without congressional oversight on motor vehicle emissions and adopt its own standards, so long as they were at least as strict as federal standards.

In 2006, California enacted a Global Warming Solutions Act to further reduce air pollution from carbon emissions.

RockyMountain Farmers Union filed suit in 2009, along with a host of other ethanol producers, challenging the state’s ethanol regulations under the global warming law.  They challenged it as a violation of the Constitution’s Commerce Clause and said it was preempted by federal law.

The trial judge issued an injunction blocking the state law based on the RockyMountain claims.  The judge found the fuel standard facially discriminated against out-of-state corn ethanol.  The 9th Circuit’s decision vacated that injunction.

Also among the considerations were Brazilian sugarcane-based ethanol.  Part of the California regulation recognizes ethanol produced from more carbon-intensive manufacturing processes and punishes the dirtier electricity, produced from inefficient power plants.

Case: Rocky Mountain Farmers Union v. Corey, No. 12-15131




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