EPA retains power to regulate RNG in blow to Coalition for Renewable Natural Gas

On 19 July, the D.C. Circuit Court upheld modified EPA regulations on monitoring biogas-derived renewable fuel, reported Pierce Atwood LLP.
In doing so, it rejected the Coalition for Renewable Natural Gas' petition calling for the EPA to overturn the EPA's modifications to the Clean Air Act's Renewable Fuel Programme concerning Renewable Identification Numbers (RINs).
RINs are digital certificates used by the EPA to track and enforce renewable fuel usage and can be separated from the fuel to be traded like commodities.
They are valuable because companies producing excess renewable fuel can sell their RINs to organisations that haven't met their quotas.
Other companies rely upon RINs as incentives to build manufacturing facilities to convert landfill and other waste gases into RNG.
To prevent fraud and reduce errors, the EPA implemented stricter standards for participants in the transportation-fuel economy and the RINs programme.
At issue in this case was part of the Act that states the EPA’s renewable fuel regulations “shall contain compliance provisions applicable to refineries, blenders, distributors, and importers, as appropriate, to ensure that the requirements are met.” The Coalition argued that since this provision did not include “producers,” the EPA regulation was improperly applied to them.
The D.C. Circuit Court disagreed, finding the term “shall contain” to be “a regulatory floor, not a cap.”
Because “verifying the sourcing of renewable fuel by its producers is essential to meeting Congress’ mandate,” the Court held that §7545(o) can apply to biogas producers.
However, the Court stipulated that because biogas producers are not explicitly named in the “shall-contain” clause, the regulations apply only to those producers that choose to participate in the RINs program.
The Court also rejected the Coalition’s argument that there was no need to regulate biogas producers participating in the RINs programme because refineries, blenders, distributors, and importers are explicitly bound to adhere to the standards, finding that the regulation of producers accords with the wider congressional mandate of the Renewable Fuel Program.
This decision is a firm affirmation of the EPA’s power to regulate biogas producers participating in the RINs program.