EPA Rule on Argentine Biofuel Imports Upheld

A federal appeals court Tuesday upheld the Environmental Protection Agency approval of Argentinian biodiesel imports for use in America’s cars, trucks and buses, over the objection of a trade group representing the U.S. biofuel industry.

The District of Columbia Circuit Court of Appeals rejected the National Biodiesel Board’s (NBB) challenge to a 2010 regulation that the EPA used to approve the Argentine imports.

Although the case “implicates a pressing international issue,” the panel held it could resolve it easily on existing law. The challenge to a 2010 law was untimely, and “EPA’s decision to grant the Argentine application was neither arbitrary nor capricious, as it comports with agency regulations… and judgments to which we owe agencies great deference,” said Judge David Tatel.

It was estimated in 2015, that the streamlined rule for Argentine imports of biodiesel could bring 600 million gallons a year to the U.S., or about 34 percent of the total U.S. production in 2014, according to the Environmental Energy Study Institute.

In 2005, Congress created a Renewable Fuel Standard that requires transportation fuel to include specific amounts of “renewable fuel” made from plants, trees, animal waste, algae or other alternative to oil.  By 2007, Congress expanded the program to significantly increase use of renewable fuel and prevent land-use changes like deforestation as a result of increased demand.

Renewable fuel had to come from agricultural land that was already cleared or cultivated prior to December 2007, under the expanded law.

The challenged 2010 regulation lays out the methods required for producers and importers of renewable biofuel to keep records that verify crops used came from land in cultivation prior to December 2007.

Among several methods, the U.S. biofuel industry challenged the provision that allows a foreign or domestic producer to participate in an industry-funded program of annual compliance surveys. The survey is carried out by and independent surveyor.

The Argentine biofuels association submitted its comprehensive survey program to the U.S. EPA for approval in 2012 and it was ultimately approved in 2015.  In part, it uses historical satellite images to identify land cleared prior to 2007.

The NBB challenged the 2010 rule and the EPA’s approval of the Argentine program.

“NBB’s theory – that EPA may not approve an alternative tracking program without knowing the full population of the feedstock suppliers in advance – scrambles the sequence envisioned by the regulation,” wrote Tatel.  It is not clear why EPA should know the universe of suppliers in order to decide in advance whether the method of conducting the surveys is acceptable, Tatel concluded.

He was joined by Judges Janice Rogers Brown and Brett Kavanaugh.

Case:  National Biodiesel Board v. EPA, No. 15-1072



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