D.C. Circuit Court Affirms EPA’s Power to Regulate Biogas

On July 19, 2024, the D.C. Circuit Court upheld modified EPA regulations on monitoring biogas-derived renewable fuel, rejecting the petition of the Coalition for Renewable Natural Gas (the Coalition) -- a trade association that represents companies and organizations that operate throughout the renewable-natural-gas chain -- to overturn EPA’s modifications to the Clean Air Act’s Renewable Fuel Program (42 USC §7545(o)) 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. RINs are valuable because companies producing more renewable fuel than required can sell their excess RINs to those 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 renewable natural gas, or RNG. To prevent fraud and reduce errors, the EPA implemented stricter standards for participants in the transportation-fuel economy and the RINs program.

At issue in Coalition for Renewable Natural Gas v. EPA, No. 23-1248, 2 (D.C. Cir. 2024), was 42 USC §7545(o)(2)(A)(iii)(I), which states that 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.” Id. at 7. 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. See id. at 10.

The Court also rejected the Coalition’s argument that there was no need to regulate biogas producers participating in the RINs program because refineries, blenders, distributors, and importers are explicitly bound to adhere to the standards of §7545(o), 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. For more information on this decision or biogas regulation, please contact Pierce Atwood environmental and energy law attorneys Lisa Gilbreath (207.791.1397), Brian Rayback (207.791.1188), Randy Rich (202.530.6424), or Merrill Kramer (202.530.6412).