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Biofuel No Longer Exempt From EPA Regulations

Biofuel producers may not be burning so bright after the D.C. Circuit Court’s recent ruling, a decision which confirmed the ethanol fuel industry will be subject to carbon emission regulations.

In its decision in Center for Biological Diversity v. EPA, the Court ruled that “[t]here is no statutory basis for exempting biogenic carbon dioxide,” a source based distinction many biofuel companies use to support their “carbon neutral” claims, reports Reuters.

This ruling also applies to paper and lumber manufacturers, who will likely be clamoring to appeal this case with their biofuel brethren.

But ... But ... It Comes From Nature

The crux of Center for Biological Diversity is the term "biogenic carbon dioxide," which is an Environmental Protection Agency (EPA) term of art which distinguishes CO2 which comes from biologically based materials other than fossil fuels.

However, the D.C. Circuit rightly points out that the Earth's atmosphere doesn't have the subtle habit of distinguishing between CO2 molecules produced by fermenting plant matter to produce ethanol or from a turn of the century coal plant.

The EPA had placed a temporary hold for biogenic carbon dioxide producers to comply with federal regulations like the Prevention of Significant Deterioration of Air Quality (PSD) program, which among other things requires iron and steel mills to regulate the tons per year of pollutants they dump into the air.

Review of EPA Actions

The D.C. Circuit in Center for Biological Diversity cited prior cases noting that they can review EPA actions to determine if they are:

  • An abuse of discretion (i.e. arbitrary and capricious)
  • Contrary to constitutional rights and powers
  • Outside of statutory jurisdiction or authority

The Center for Biological Diversity ("Center") argued that because the Supreme Court had ruled in Massachusetts v. EPA that carbon dioxide could be regulated as an "air pollutant," that the EPA could not exempt carbon dioxide producers from laws that explicitly prevent the dumping of certain tonnage of any air pollutant.

On the other hand, the EPA argued, using a phrase mostly taken to mean "only by a teensy bit," that their three-year exemption for biogenic carbon was de minimis in its impact on the carbon cycle, and was ultimately trivial.

Odd to hear the EPA say that stopping their regulation for three whole years wouldn't make much difference.

Arbitrary and Capricious

You might recognize "arbitrary and capricious" from some of the D.C. Circuit's rulings earlier in 2013, including shutting down the Nuclear Regulatory Commission's plans to transfer nuclear waste disposal duties to the state of New Jersey.

In this case, however, the D.C. Circuit found that by not choosing some sort of option that would allow gradual regulation of biofuel and other biogenic type manufacturers, it was acting in an arbitrary and capricious manner.

The court also took issue with the idea that deferring the regulation was a "first step" toward actually enforcing the statutory mandates, and without articulating how this 3 year period would allow the EPA to reach their goal, the Agency was essentially operating on no timetable at all.

Lacking any solid evidence to the contrary, the Center for Biological Diversity Court ruled that there was no statutory or regulatory basis for the biogenic carbon dioxide exemption.

Bottom Line

In response to the D.C. Circuit's decision, the EPA replied that it "will review the decision to determine any next steps," reports Reuters.

Any next steps? Guess this fight isn't over.

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