US biodiesel trade body National Biodiesel Board (NBB) has filed an opening brief in a lawsuit challenging the US Environmental Protection Agency’s (EPA) methodology in establishing biofuel volumes under the 2018 Renewable Fuel Standard (RFS).

The brief, submitted on 27 July, was the first the courts would consider in arguing that the EPA had to account for all “hardship exemptions” granted to small refineries, including those granted retroactively, when it set the annual RFS volumes and Renewable Volume Obligations (RVOs), NBB said in a statement.

“The EPA has unlawfully failed to account for all small refinery exemptions it awards, violating its duty to promulgate percentage standards that ‘ensure’ all aggregate volumes are met. Unaccounted for small refinery exemptions reduce aggregate volumes and the EPA’s approach creates a new, de facto waiver authority contrary to the Congress’ design,” the NBB brief read.

The association further argued that despite knowing of the alleged consequences, the EPA declined to adjust percentage standards to account for the resulting shortfall.

The EPA had disclosed that it recently granted 48 retroactive small refinery exemptions, which reduced the 2016 and 2017 RVOs by a total 2.25bn RINs and cut 2016 RVOs by 4.3% and 2017 RVOs by 7.5%, NBB said.

The association also estimated that the 2016 and 2017 exemptions reduced biodiesel demand by more than 300M gallons and demanded that the EPA “do something” to account for the shortfall.

Further, the NBB challenged the EPA’s use of its cellulosic waiver authority to reduce the 2018 advanced biofuel RVO below the volume it had determined to be “reasonably attainable”.

“The EPA’s view that it has unlimited discretion to do whatever it wants to the advanced biofuel volume via the cellulosic waiver provision is not supported by this court’s precedents and would, if correct, render the provision unconstitutionally broad,” the trade body said.

Finally, the NBB claimed that the EPA had set the 2019 biomass-based diesel (BBD) volume based on factors that were not mentioned in the RFS statute while disregarding other factors written in the statute.

“The EPA set the 2018 BBD volume nearly identically to how it set the 2018 volume, which the NBB is challenging in a separate proceeding. But the result here is even worse for the industry,” the NBB claimed.

The EPA was scheduled to file a reply brief by 25 October.