The Environmental Protection Agency must reconsider the impacts on climate change of biofuel volumes in its 2023 “set rule,” the D.C. Circuit Court of Appeals ruled Friday.

The agency relied on an “admittedly outdated study instead of newer data,” when it concluded that “on average, [corn-based ethanol] provides some [greenhouse gas] reduction in comparison to gasoline,” the court said.

The court remanded the set rule, which covered renewable fuel volumes from 2023-2025, to the agency for further analysis. However, it did not vacate the rule, saying to do so “would be highly disruptive to all stakeholders in the RFS Program as the compliance deadlines for 2023 and 2024 have already passed.”

The court also ruled that the Fish and Wildlife Service could not adequately justify why the set rule would have “no effect” on endangered species or their critical habitats.

The Center for Biological Diversity brought the challenge.

“This is a big win for people and wildlife over the misguided, damaging renewable fuel standard,” said Maggie Coulter, an attorney at the Center for Biological Diversity’s Climate Law Institute. “The court agreed that the government’s shoddy analysis cannot stand. The EPA and Fish and Wildlife Service need to fully assess the renewable fuels program’s harms to protected species and the places they live.”

At the heart of the climate change issue in the litigation is the question – what is the climate impact of converting land to grow crop-based fuels?

EPA conducted a literature review to examine GHG emissions for all biofuel categories except corn-based ethanol and soybean-based biodiesel, for which it relied on a 2010 study. The agency said that was because it was the only study to examine land-use change emissions over a long-enough period of time.

But EPA itself suggested there were other studies it could have looked at. “EPA clearly implies that some minority of the studies EPA considered did in fact report annual streams of emissions associated with land use change,” the court said.

The court said EPA argued it was justified in using the “substantially lower emissions estimates from its 2010 RFS study for corn-based ethanol and soybean-based renewable fuels in lieu of the aggregate range of estimates from its literature review because the latter systematically overestimated GHG emissions from land use changes. But that assertion of systemic skew is contradicted by EPA’s own figures showing that GHG emissions estimates drawn from the literature review were effectively identical to those included in the 2010 study.”

EPA also said “it was justified in using the substantially lower emissions estimates from its 2010 RFS study for corn-based ethanol and soybean-based renewable fuels in lieu of the aggregate range of estimates from its literature review because the latter systematically overestimated GHG emissions from land use changes,” the court said.

However, “that assertion of systemic skew is contradicted by EPA’s own figures showing that GHG emissions estimates drawn from the literature review were effectively identical to those included in the 2010 study for all crop-based renewable fuel — except corn-based ethanol.”

The court also rejected refiners’ challenges to supplemental volumes for 2022 and 2023 and to the set rule’s analysis supporting the volumes.

“Nothing in the [Clean Air] Act or precedent supports a freestanding requirement that EPA balance the quantifiable costs and benefits of the volumes it sets, let alone that EPA may implement the RFS Program only insofar as its benefits — quantified or not — outweigh its costs,” the court said.

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