(Reuters) - A coalition of ethanol and farm groups sued the U.S. Environmental Protection Agency on Tuesday, challenging its decision to free three refineries, including one owned by billionaire investor Carl Icahn, from annual biofuels requirements.
The groups, including the Renewable Fuels Association and the National Corn Growers Association, filed the challenge in a U.S. Court of Appeals for the 10th Circuit in Denver, according to a statement from the coalition. The lawsuit targets three waivers doled out to refineries owned by CVR Energy Inc, in which Icahn hold a majority stake, and HollyFrontier Corp.
Refiners are required by the U.S. Renewable Fuel Standard to blend increasing volumes of biofuels like ethanol each year, but the EPA can offer exemptions for facilities under 75,000 barrels per day, if they experience “disproportionate economic hardship.”
The EPA did not respond immediately to a request for comment on the lawsuit.
The EPA has come under pressure for being stingy with the waivers in the past, and a successful lawsuit last year by Sinclair Oil Corporation led a federal court to order EPA to expand its definition of “economic hardship” - opening the door for more facilities to qualify. U.S. refiner Andeavor and CVR are among the companies that sources have said have received waivers for their smallest units. Chevron Corp, Exxon Mobil Corp and Marathon Oil Corp have requested them, sources have told Reuters.
The number of waivers has soared, amplifying controversy over a program that has been a battleground for entrenched farm and oil interests in Washington for years. Oil refiners say the requirements cause undue financial strain, while corn and biofuels supporters say the waivers reduce demand for their products.
In addition to challenging the waivers themselves, the group criticized the EPA for its lack of transparency. The EPA has refused to share details of which companies have asked for and received the waivers, citing confidential business information.
“EPA is trying to undermine the RFS program under the cover of night,” Bob Dinneen, CEO and president of Renewable Fuels Association, said in the statement.
The American Coalition for Ethanol and National Farmers Union joined in filing the lawsuit.
Reporting by Chris Prentice and Jarrett Renshaw in New York; Editing by Lisa Shumaker