United States Court of Appeals 

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued November 3, 2023 Decided May 14, 2024 

No. 22-1210 

SINCLAIR WYOMING REFINING COMPANY LLC AND SINCLAIR 

CASPER REFINING COMPANY LLC, 

APPELLANTS

v. 

ENVIRONMENTAL PROTECTION AGENCY, 

APPELLEE

AMERICAN PETROLEUM INSTITUTE, ET AL., 

INTERVENORS

Consolidated with 22-1225, 22-1227, 22-1228, 22-1229, 

22-1230, 22-1231 

On Petitions for Review of a Final Action 

 of the Environmental Protection Agency 

Elizabeth B. Dawson and Jeffrey R. Holmstead argued the 

causes for petitioners American Fuel & Petrochemical 

Manufacturers and All Other Obligated Party Petitioners. With 

them on the briefs were Rober J. Meyers, Jonathan G. Hardin, 

LeAnn Johnson, Alexandra Magill Bromer, Brittany M. 
2 

Pemberton, Richard S. Moskowitz, Tyler J. Kubik, Samuel P. 

Hershey, Thomas E. Lauria, and Andrew K. Gershenfeld. 

Thomas A. Lorenzen, Taylor R. Pullins, Eric B. Wolff, and Karl 

J. Worsham entered appearances.

 

William C. Perdue argued the cause for BioFuels 

Petitioners. With him on the briefs were Matthew W. 

Morrison, Cynthia Cook Robertson, Shelby L. Dyl, Ethan G. 

Shenkman, and Jonathan S. Martel. 

Amir C. Tayrani was on the brief for amici curiae Monroe 

Energy, LLC and PBF Holding Company, LLC in support of 

Obligated Party Petitioners. 

Kimere J. Kimball and Caitlin McCusker, Attorneys, U.S. 

Department of Justice, argued the causes for respondent. With 

them on the brief was Todd Kim, Assistant Attorney General. 

John H. Martin, Attorney, entered an appearance. 

Thomas R. Brugato argued the cause for intervenors 

American Petroleum Institute and American Fuel & 

Petrochemical Manufacturers in support of respondent. With 

him on the brief were Robert J. Meyers, Elizabeth B. Dawson, 

Richard S. Moskowitz, Tyler Kubik, Robert A. Long, Jr., Kevin 

F. King, Daniel G. Randolph, Makade C. Claypool, John 

Wagner, and Michele Schoeppe.

Bryan Killian, Douglas Hastings, David M. Lehn, 

Matthew W. Morrison, and Shelby L. Dyl were on the brief for 

BioFuel Intervenors in support of respondents. Jonathan S. 

Martel entered an appearance. 

Before: SRINIVASAN, Chief Judge, PILLARD and KATSAS, 

Circuit Judges. 
3 

Opinion for the Court filed by Circuit Judge PILLARD. 

Opinion concurring in part and dissenting in part filed by 

Circuit Judge KATSAS. 

PILLARD, Circuit Judge: This is the latest dispute over 

EPA’s implementation of the Clean Air Act’s Renewable Fuel 

Standards Program. 42 U.S.C. § 7545(o). Designed to 

promote energy independence and curb greenhouse gas 

emissions, the Program requires the petroleum industry to 

introduce increasing volumes of renewable fuel from year to 

year into the nation’s transportation fuel supply. In creating the 

Program, however, Congress dramatically overestimated the 

speed at which domestic production of renewable fuel could 

expand, leading EPA year after year to reduce the statutorily 

required renewable fuel requirements. These reductions almost 

invariably trigger litigation. The renewable fuel industry 

argues the reductions are too large, while the petroleum 

industry argues they are not large enough. We have resolved 

challenges to the Program’s renewable fuel requirements for 

every year between 2010 and 2019.1 

1 See Nat’l Petrochem. & Refiners Ass’n v. EPA, 630 F.3d 145 (D.C. 

Cir. 2010) (2010 renewable fuel standards); Am. Fuel & Petrochem. 

Mfrs. v. EPA, No. 12-1249 (D.C. Cir. Dec. 17, 2012) (2011 

renewable fuel standards); Am. Petroleum Inst. v. EPA, 706 F.3d 474 

(D.C. Cir. 2013) (2012 renewable fuel standards); Monroe Energy, 

LLC v. EPA, 750 F.3d 909 (D.C. Cir. 2014) (2013 renewable fuel 

standards); Ams. for Clean Energy v. EPA, 864 F.3d 691 (D.C. Cir. 

2017) (2014, 2015, and 2016 renewable fuel standards); Alon Refin. 

Krotz Springs, Inc. v. EPA, 936 F.3d 628 (D.C. Cir. 2019) (2017 and 

2018 renewable fuel standards); Am. Fuel & Petrochem. Mfr. v. EPA, 

937 F.3d 559 (D.C. Cir. 2019) (2018 renewable fuel standards); 

Growth Energy v. EPA, 5 F.4th 1 (D.C. Cir. 2021) (2019 renewable 

fuel standards). 
4 

Today, we resolve challenges to the standards for the years 

2020, 2021, and 2022. Once again, renewable fuel producers 

claim that EPA’s standards are set too low, while petroleum 

refiners contend they are too high. We hold that EPA complied 

with the law and reasonably exercised its discretion in setting 

the renewable fuel requirements for the three years at issue. 

We therefore deny the petitions for review. 

BACKGROUND 

A. 

Enacted in 2005 and amended in 2007, the Renewable 

Fuel Standards Program (Program) “requires that increasing 

volumes of renewable fuel be introduced into the Nation’s 

supply of transportation fuel each year.” Ams. for Clean 

Energy v. EPA (ACE), 864 F.3d 691, 697 (D.C. Cir. 2017). “To 

accomplish these goals, the Program regulates suppliers 

through ‘applicable volume[s]’—mandatory and annually 

increasing quantities of renewable fuels that must be 

‘introduced into commerce in the United States’ each year—

and tasks the EPA Administrator with ‘ensur[ing]’ that those 

annual targets are met.” Am. Fuel & Petrochem. Mfr. v. EPA

(AFPM), 937 F.3d 559, 568 (D.C. Cir. 2019) (quoting 42 

U.S.C. § 7545(o)(2)(A)(i)). “[B]y requiring upstream market 

participants . . . to introduce increasing volumes of renewable 

fuel into the transportation fuel supply, Congress intended the 

Renewable Fuel Program to be a market forcing policy that 

would create demand pressure to increase consumption of 

renewable fuel.” Id. (internal quotation marks omitted). 

We have extensively described the statutory scheme in 

various opinions, most recently in American Fuel & 

Petrochemical Manufacturers, 937 F.3d at 568-73. Here is a 

more streamlined summary: 
5 

“The Program specifies annual fuel-volume requirements 

for four overlapping categories of fuel.” Id. at 568. Those 

categories are: (i) cellulosic biofuel; (ii) biomass-based diesel; 

(iii) advanced biofuel; and (iv) total renewable fuel. 42 U.S.C. 

§ 7545(o)(2)(B)(i)(I)-(IV). “Those four fuel categories vary 

with respect to the renewable biomass sources from which they 

are derived and their greenhouse gas emissions.” ACE, 864 

F.3d at 697 (citing 42 U.S.C. § 7545(o)(1)(B), (D), (E), (J)). 

“The statutory categories of fuel types are ‘nested,’ meaning 

that cellulosic biofuel and biomass-based diesel are kinds of 

advanced biofuel, and advanced biofuel in turn is a kind of 

renewable fuel that may be credited toward the total renewable 

fuel obligation.” Id. at 697-98. Renewable fuel that is not 

advanced biofuel is “conventional biofuel.” 42 U.S.C. 

§ 7545(o)(1)(F). By the same token, we refer to advanced 

biofuel that is not cellulosic biofuel—including biomass-based 

diesel—as non-cellulosic advanced biofuel. The volumes of 

total renewable fuel and advanced biofuel that may 

respectively be made up of conventional renewable fuel and 

non-cellulosic advanced biofuel are referred to as “implied 

statutory volume[s].” See, e.g., Renewable Fuel Standard 

Program: RFS Annual Rules, 87 Fed. Reg. 39,600, 39,623 

n.127 (July 1, 2022). 

“The statute contains tables that set forth the annual 

volume requirements for each category of renewable fuel.” 

ACE, 864 F.3d at 698. For 2006, the first year of the Program, 

“Congress ordained the inclusion of 4 billion gallons of 

renewable fuel in the Nation’s fuel supply.” HollyFrontier 

Cheyenne Refin., LLC v. Renewable Fuels Ass’n, 141 S. Ct. 

2172, 2175 (2021) (citing 42 U.S.C. § 7545(o)(2)(B)(i)(I)). By 

2022, that number was supposed to “climb to 36 billion 

gallons,” including 21 billion gallons of advanced biofuel, 16 

billion gallons of which were to be cellulosic biofuel. Id.; 42 

U.S.C. § 7545(o)(2)(B)(i)(II), (III). The 2022 volumes also 
6 

contain implied statutory volumes of 15 billion gallons of 

conventional biofuel and five billion gallons of non-cellulosic 

advanced biofuel. The statute does not set the requisite 

amounts for years after 2022 (or, in the case of biomass-based 

diesel, 2012). Congress instead “largely left it to [EPA] to set 

the applicable volumes.” HollyFrontier, 141 S. Ct. at 2175. 

EPA must do so “based on a review of the implementation of 

the program during” previous years and “an analysis of” six 

other factors, such as the fuel’s effect on “the environment,” 

“energy security,” “infrastructure,” and “cost to consumers.” 

42 U.S.C. § 7545(o)(B)(ii). 

These statutory volumes, however, have consistently 

proven infeasible. The volumes for cellulosic biofuel in 

particular “assumed significant innovation in the industry”—

innovation that has not kept pace with the growth the Program 

projected. See Am. Petroleum Inst. v. EPA, 706 F.3d 474, 476 

(D.C. Cir. 2013). 

Recognizing its market forcing might prove overly 

ambitious, Congress authorized EPA to adjust the statutory 

volumes in various scenarios. See 42 U.S.C. § 7545(o)(7). 

Two such provisions are relevant to this case. The first is the 

cellulosic waiver provision, which requires EPA to reduce the 

cellulosic volume to the “projected volume” of available 

cellulosic biofuel for any year in which the “projected volume 

of cellulosic biofuel production is less than the minimum 

applicable [i.e., required] volume” of cellulosic biofuel. Id.

§ 7545(o)(7)(D). If that waiver is triggered, EPA “may also 

reduce the applicable volume of renewable fuel and advanced 

biofuels requirement . . . by the same or lesser amount.” Id. 

EPA has invoked the cellulosic waiver provision in every year 

since 2010. 
7 

The second relevant source of adjustment authority is the 

reset provision. Id. § 7545(o)(7)(F). Under this provision, if 

EPA waives at least 20 percent of an applicable volume of any 

renewable fuel for two consecutive years, or waives at least 50 

percent for a single year, it “shall promulgate a rule . . . that 

modifies the applicable volumes . . . for all years following the 

final year to which the waiver applies.” Id. In promulgating 

such a rule, EPA must consider the same factors that inform its 

ordinary volume-setting decisions. Id. 

After the applicable volumes are set, EPA must “ensure” 

they “are met.” Id. § 7545(o)(3)(B)(i). It does so by setting 

percentage standards that inform “each obligated party how 

much of its fuel production must consist of renewable fuels.” 

Monroe Energy, LLC v. EPA, 750 F.3d 909, 912 (D.C. Cir. 

2014). They are calculated by dividing the applicable volume 

for each renewable fuel type by an estimate of the national 

volume of gasoline and diesel that will be used that year (which 

EPA derives based on an estimate provided by the Energy 

Information Administration). See 42 U.S.C. § 7545(o)(3)(A), 

(B)(i); 40 C.F.R. § 80.1405(c). For example, if the applicable 

volume of total renewable fuel is 10 billion gallons and the 

projected national volume of transportation fuel is 100 billion 

gallons, the percentage standard would be ten percent. “Thus, 

if every obligated party incorporates the required percentage of 

renewable fuel into the gasoline and diesel it sells, the 

transportation fuel industry as a whole will achieve the 

established applicable volumes.” AFPM, 937 F.3d at 587. 

EPA must promulgate annual percentage standards no later 

than November 30 of the preceding year for each compliance 

year through 2022. 42 U.S.C. § 7545(o)(3)(B)(i). 

Generally, the obligated parties are refiners and importers 

of transportation fuel. See id. § 7545(o)(3)(B)(ii); 40 C.F.R. 

§ 80.1406(a)(1). There is, however, an exception for small 
8 

refineries that produce fewer than 75,000 barrels per day on 

average. 42 U.S.C. § 7545(o)(1)(K). The statute permits a 

limited class of small refineries to petition “at any time” for an 

exemption based on “disproportionate economic hardship.” Id.

§ 7545(o)(9)(B)(i); see HollyFrontier, 141 S. Ct. at 2181-82. 

Obligated parties need not themselves produce or import 

renewable fuel. “Congress directed EPA to establish a ‘credit 

program’ through which obligated parties can acquire and trade 

credits,” and thereby comply with the statute. ACE, 864 F.3d 

at 699 (quoting 42 U.S.C. § 7545(o)(5)). These credits, called 

RINs—short for “Renewable Identification Numbers”—“serve 

as the currency of the RFS Program.” Wynnewood Refin. Co., 

LLC v. EPA, 77 F.4th 767, 774 (D.C. Cir. 2023). They are 

generated when renewable fuel is produced in or imported to 

the United States, and they are valid for twelve months from 

the date of generation. 42 U.S.C. § 7545(o)(5). “RINs remain 

attached to the renewable fuel until that fuel is purchased by an 

obligated party or blended into fossil fuels to be used for 

transportation fuel,” at which point “the RINs become 

‘separated’” and available to use as compliance credits. Alon 

Refin. Krotz Springs, Inc. v. EPA, 936 F.3d 628, 637 (D.C. Cir. 

2019). 

RINs “facilitate flexible and cost-effective compliance.” 

ACE, 864 F.3d at 699. An obligated party that has accumulated 

excess RINs can sell them on the market or carry them over to 

be used to satisfy a portion of the following year’s obligations. 

See 42 U.S.C. § 7545(o)(5)(C); 40 C.F.R. § 80.1427(a)(1), (5). 

Conversely, an obligated party that has not accumulated 

enough RINs can purchase them on the market or, provided 

certain conditions are met, carry a deficit forward into the next 

compliance year. 42 U.S.C. § 7545(o)(5)(D); 40 C.F.R. 

§ 80.1427(b). In addition, if EPA invokes the cellulosic waiver 

provision, it must “make available for sale cellulosic biofuel 
9 

credits,” which obligated parties may use, alongside or instead 

of RINs, to meet their cellulosic biofuel obligations. 42 U.S.C. 

§ 7545(o)(7)(D)(ii). EPA must “determin[e] the exact price of 

[cellulosic biofuel] credits in the event of a waiver,” subject to 

various restrictions. Id. § 7545(o)(7)(D)(iii). “Any [obligated 

party] may therefore comply with the law thanks to its own 

blending efforts, the purchase of credits from someone else, or 

a combination of both.” HollyFrontier, 141 S. Ct. at 2175. 

B. 

In July 2022, EPA set volume requirements and resulting 

percentage standards for the years 2020, 2021, and 2022 for, as 

relevant here, total renewable fuel, advanced biofuel, and 

cellulosic biofuel. See Renewable Fuel Standard Program: 

RFS Annual Rules, 87 Fed. Reg. 39,600 (July 1, 2022) 

(hereinafter Final Rule). The Final Rule also reaffirmed its 

latest formula for calculating the percentage standards and 

imposed a supplemental volume requirement in response to the 

remand from our court in ACE, 864 F.3d 691. 

1.

The Final Rule established renewable fuel requirements 

for 2021 and 2022 and modified previously established 

requirements for 2020. EPA invoked its authority under both 

the cellulosic waiver provision and the reset provision. In 

particular, EPA relied on the cellulosic waiver provision and 

the reset provision to establish the 2020, 2021, and 2022 

cellulosic biofuel volumes and the 2022 total renewable fuel 

and advanced biofuel volumes. EPA relied exclusively on the 

reset provision to establish the 2020 and 2021 total renewable 

fuel and advanced biofuel volumes, which are not challenged 

in these petitions. 
10 

EPA acknowledged that it lagged behind the statutory time 

frame for setting these volumes, making them late and either 

partially or wholly retroactive. 87 Fed. Reg. at 39,620, 39,622, 

39,624. EPA nevertheless relied on precedent of this court that, 

in its view, authorized late and retroactive fuel volumes, “so 

long as EPA exercises this authority reasonably.” Id. at 39,609 

n.49 (citing ACE, 864 F.3d at 720; Monroe Energy, 750 F.3d 

909; Nat’l Petrochem. & Refiners Ass’n v. EPA, 630 F.3d 145, 

154-58 (D.C. Cir. 2010)). 

Starting with the cellulosic waiver provision, EPA 

determined that the “projected volumes of cellulosic biofuel 

production for 2020, 2021, and 2022 are all significantly less 

than the volume targets in the statute.” Id. at 39,606. 

Therefore, EPA reduced the applicable volumes to the 

“projected volume available” of cellulosic biofuel. Id. 

Because 2020 and 2021 had “already passed,” EPA did not 

need to rely on projections. See id. at 39,617. It simply reduced 

the applicable volumes to the amount of cellulosic biofuel 

actually used in those years. Id. It lowered the 2020 volume 

from 10.5 billion to 0.51 billion gallons, and it reduced the 

2021 volume from 13.5 billion gallons to 0.56 billion. Id. at 

39,601; see also EPA Regulatory Impact Analysis: Renewable 

Fuel Standard (RFS) Program: RFS Annual Rules 159 (2022) 

(RIA) (Joint Appendix (J.A.) 145) (actual volumes). For 2022, 

EPA reduced the volume from 16 billion gallons to the 0.63 

billion gallons it projected would be available that year—a 

reduction of 15.37 billion gallons. 87 Fed. Reg. at 39,601; see 

also RIA at 175 (J.A. 330) (projected volume available). 

Under the discretionary prong of the cellulosic waiver 

provision, EPA had the option to reduce the advanced biofuel 

and total renewable fuel volumes by as much as the same 

amount as it had reduced the cellulosic biofuel volumes. It did 

so for the 2022 volumes, reducing the advanced biofuel and 
11 

total renewable fuel volumes by the same 15.37 billion gallons 

as it had reduced the cellulosic biofuel volume. 87 Fed. Reg. 

at 39,608. The advanced biofuel volume was thus reduced 

from 21 billion gallons to 5.63 billion gallons, and the total 

renewable fuel volume from 36 billion gallons to 20.63 billion 

gallons. Id. at 39,601, 39,608. Because the 2022 volumes were 

partially prospective, EPA expected they would “induce the 

market to produce, import, and consume additional biofuels in 

2022.” Id. at 39,624. 

EPA took a different approach for the years 2020 and 

2021. Because those years had already passed, EPA 

determined that the “appropriate volume” for advanced biofuel 

and total renewable fuel would be the “actual volumes of such 

fuels available” in those years. Id. at 39,608. Such reductions, 

however, would be larger than permitted under the cellulosic 

waiver provision. Id. For example, the 2020 statutory volume 

for advanced biofuel was 30 billion gallons, but the amount 

available was 17.13 billion gallons—meaning the market came 

up short by 12.87 billion gallons. 42 U.S.C. 

§ 7545(o)(2)(B)(i)(I); 87 Fed. Reg. at 39,601. The cellulosic 

waiver provision, however, authorized EPA to reduce the 2020 

volume by no more than 9.99 billion gallons—the amount it 

reduced the cellulosic biofuel volume. 

To reduce the 2020 and 2021 volumes below what would 

have been permissible under the cellulosic waiver provision, 

EPA invoked the reset provision. It determined the reset 

provision was triggered for all three categories of renewable 

fuel: cellulosic biofuel, advanced biofuel, and total renewable 

fuel. 87 Fed. Reg. at 39,607. Therefore, EPA was required to 

modify the statutory volumes for the years 2020, 2021, and 

2022. See 42 U.S.C. § 7545(o)(7)(F). After consulting the 

statutory factors laid out in Section 7545(o)(2)(B)(ii), EPA set 

the total renewable fuel and advanced biofuel volumes for the 
12 

years 2020 and 2021 to the “actual volumes of such fuels 

available in 2020 and 2021.” 87 Fed. Reg. at 39,608. This 

approach, we have explained, “guards against RIN shortages 

by ensuring that the quantity of RINs already generated during 

the relevant year will be adequate to satisfy the renewable fuel 

standards for that compliance year.” Wynnewood, 77 F.4th at 

783. EPA also used the reset provision as an independent basis 

to support the various reductions made under the cellulosic 

waiver provision. 87 Fed. Reg. at 39,608. 

2.

The Final Rule also reaffirmed a change EPA first made in 

2020 to the formula it used to calculate percentage standards. 

See 87 Fed. Reg. at 39,631-33. As mentioned, in setting the 

percentage standards, EPA divides the applicable volume for 

each renewable fuel type by an estimate of the national volume 

of non-renewable transportation fuel that will be used that year. 

See 40 C.F.R. § 80.1405(c). EPA may, however, “exempt from 

compliance small refineries experiencing disproportionate 

economic hardship in complying with their renewable fuel 

obligations.” AFPM, 937 F.3d at 587. By permitting some 

petroleum refiners “to incorporate less renewable fuel into the 

gasoline and diesel they sell, small refinery exemptions can 

impede attainment of overall applicable volumes.” Id. at 588. 

“To avoid such a shortfall,” EPA has long adjusted the 

percentage standards applicable to other petroleum refiners and 

importers to account for small refinery exemptions. Id. Until 

2020, EPA excluded from the denominator petroleum fuel 

produced by small refineries already exempted by the time the 

rule was promulgated. 87 Fed. Reg. at 39,632. But EPA also 

retroactively granted exemptions to small refineries whose 

petroleum-based transportation fuel EPA had already 

calculated into the percentage standards for the upcoming 
13 

compliance year. Without further adjustment, those retroactive 

exemptions from the renewable-fuel requirements hindered the 

achievement of the applicable renewable-fuel volumes because 

they artificially inflated the denominator—the nation’s total 

supply of petroleum-based transportation fuel—and thereby 

reduced the percentage standards applied to nonexempt 

refiners and importers. See id. So, in 2020, EPA changed 

course. It began excluding from the denominator not only the 

gasoline and diesel fuel produced by small refineries that had 

already received an exemption at the time the rule was 

promulgated but also those fuels produced by small refineries 

projected to receive an exemption for the coming year. Id. In 

the Final Rule, EPA reaffirmed this new approach. Id. at 

39,633. 

3.

Finally, the Final Rule imposed a supplemental volume 

requirement for 2022 in response to the ACE remand. The 

statutory total renewable fuel volume for 2016 was 22.25 

billion gallons. 42 U.S.C. § 7545(o)(2)(B)(i)(I). In 2015, EPA 

reduced that volume in two ways, the second of which we held 

was unlawful. First, EPA invoked the cellulosic waiver 

provision to reduce the volume by 3.64 billion gallons. See

Renewable Fuel Standard Program: Standards for 2014, 2015, 

and 2016 and Biomass-Based Diesel Volume for 2017, 80 Fed. 

Reg. 77,420, 77,439 (Dec. 14, 2015). Then, EPA invoked 

another waiver provision—the so-called “inadequate domestic 

supply” provision—to reduce the volume by another 500 

million gallons. Id. In doing so, EPA construed that provision 

to refer to the domestic supply of renewable fuel available to 

consumers for use in their vehicles. Id. at 77,436. In ACE, we 

rejected that interpretation of the inadequate domestic supply 

provision, holding that the provision “refers to the supply of 

renewable fuel available to refiners, blenders, and importers to 
14 

meet the statutory volume requirements.” 864 F.3d at 709. 

“We therefore vacate[d] EPA’s decision to reduce the total 

renewable fuel volume requirements for 2016 through use of 

the ‘inadequate domestic supply’ waiver provision and 

remand[ed] the Final Rule to the agency for further 

consideration in light of our decision.” Id. at 713. 

In the Final Rule, EPA determined that it would comply 

with the ACE remand and remedy the erroneous use of the 

inadequate domestic supply waiver by “restor[ing] the full 500 

million gallons” incorrectly waived in the 2016 Rule. 87 Fed. 

Reg. at 39,603. Invoking its statutory authority to “ensure” that 

the volume requirements “are met,” 42 U.S.C. 

§ 7545(o)(3)(B)(i), EPA decided to impose two supplemental 

obligations of 250 million gallons each. The first—and the one 

at issue here—it established for 2022; the second it planned for 

later action in 2023. 87 Fed. Reg. at 39,629. The 250-milliongallon supplemental volume sits atop the 20.63-billion-gallon 

total standard, meaning that the total renewable fuel obligation 

for 2022 is effectively 20.87 billion gallons. Id. at 39,601. 

* * * 

Using the waiver-adjusted and supplemental applicable 

volumes, EPA set the 2020, 2021, and 2022 percentage 

standards for total renewable fuel, advanced biofuel, and 

cellulosic biofuel. Id. 

C. 

Two sets of parties filed petitions for review challenging 

the Final Rule on various grounds. The first set of petitioners 

produce cellulosic biofuels, so we will refer to them as the 

Biofuel Petitioners. They contend that the cellulosic biofuel 

volumes are too low. The second set of petitioners are (or 

represent) fossil fuel refiners and retailers subject to the volume 
15 

requirements, so we will call them the Refiner Petitioners. 

They generally argue that the volumes are set at too high a 

level. Several other parties intervened, including a set of 

intervenors that are (or represent) fossil fuel refiners, whom we 

will call the Refiner Intervenors, and another set that are (or 

represent) renewable fuel producers, whom we will call the 

Renewable Intervenors. 

We review the Final Rule under 42 U.S.C. § 7607(b)(1). 

Under that section, “[w]e may reverse the EPA’s actions under 

the Program if we find them to be ‘arbitrary, capricious, [or] an 

abuse of discretion.’” AFPM, 937 F.3d at 574 (quoting 42 

U.S.C. § 7607(d)(9)(A)). “We will sustain the EPA’s actions, 

however, so long as the agency ‘consider[ed] all of the relevant 

factors and demonstrate[d] a reasonable connection between 

the facts on the record and the resulting policy choice.’” Id.

(quoting Sierra Club v. Costle, 657 F.2d 298, 323 (D.C. Cir. 

1981)). We “give an extreme degree of deference to the EPA’s 

evaluation of scientific data within its technical expertise, 

especially where, as here, we review the EPA’s administration 

of the complicated provisions of the Clean Air Act.” Id.

(internal quotation marks omitted). And “our review is 

particularly deferential in matters implicating predictive 

judgments.” Alon Refin., 936 F.3d at 663 (internal quotation 

marks omitted). “We also may reverse an EPA action under 

the Program if we determine that it is ‘otherwise not in 

accordance with law’ or ‘in excess of statutory jurisdiction, 

authority, or limitations, or short of statutory right.’” AFPM, 

937 F.3d at 574 (quoting 42 U.S.C. § 7607(d)(9)(A), (C)). We 

review EPA’s interpretation of the Clean Air Act under the 

familiar two-step framework formulated in Chevron, U.S.A., 

Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837 

(1984). See AFPM, 937 F.3d at 574. 
16 

DISCUSSION 

We start with the Biofuel Petitioners’ challenges and then 

turn to the Refiner Petitioners’ challenges. 

A. 

The Biofuel Petitioners challenge the cellulosic biofuel 

volumes. EPA set those volumes under the cellulosic waiver 

provision. 42 U.S.C. § 7545(o)(7)(D)(i). All parties agree that 

the waiver was triggered for the years 2020, 2021, and 2022 

because “the projected volume of cellulosic biofuel production 

[was] less than the minimum applicable volume[s] established” 

in the statutory table. Id. The Biofuel Petitioners contend, 

however, that EPA misinterpreted or unreasonably applied the 

cellulosic waiver provision when lowering the cellulosic 

biofuel volumes to the “projected volume available” during 

each calendar year. 

EPA construed the term “projected volume available 

during that calendar year” to refer to “the volume of qualifying 

cellulosic biofuel projected to be produced or imported and 

available for use as transportation fuel in the U.S. in that year.” 

87 Fed. Reg. at 39,615. In doing so, EPA did not include 

carryover cellulosic RINs, which represent the volume 

produced or imported the previous year but that remains 

available for compliance for that year. The Biofuel Petitioners 

contend that this was a mistake. In their view, EPA was 

required to include carryover cellulosic RINs in calculating the 

projected volume of available cellulosic biofuel. For 2020, for 

example, that would have added an additional 38 million 

gallons of cellulosic biofuel volume on top of the applicable 

volume of 510 million gallons. See id. at 39,616 n.95. 

Therefore, they argue, EPA set the cellulosic biofuel volume 

requirements too low. 
17 

We reject that challenge. As the Biofuel Petitioners 

concede, we review EPA’s interpretation of the Program under 

Chevron. Biofuel Br. 18. Chevron, however, “does not apply 

where the statute is clear.” Garvey v. Admin. Rev. Bd., 56 F.4th 

110, 121 (D.C. Cir. 2022) (quoting Johnson v. Guzman Chavez, 

141 S. Ct. 2271, 2291 n.9 (2021)). Here, the statute clearly 

does not mandate the inclusion of carryover cellulosic RINs in 

calculating the “projected volume available.” 

We addressed, and rejected, a similar argument in ACE. 

There, as noted above, we construed another waiver authority, 

the so-called inadequate domestic supply provision. ACE, 864 

F.3d at 713. The inadequate domestic supply provision 

authorizes EPA to reduce volume requirements “based on a 

determination . . . that there is an inadequate domestic supply.” 

42 U.S.C. § 7545(o)(7)(A)(ii). Like here, the petitioners there 

argued that, “[w]hen evaluating the available ‘supply’ of 

renewable fuel for purposes of the ‘inadequate domestic 

supply’ waiver provision,” EPA must “consider carryover 

RINs as a supply source of renewable fuel.” ACE, 864 F.3d at 

714. We held that “the statute is better read not to require EPA 

to consider carryover RINs.” Id. With respect to text, we 

observed that the waiver provision “does not reference 

carryover RINs as a source of supply of renewable fuel.” Id. 

We also concluded that EPA’s interpretation better comports 

with the statute’s purpose. Id. The contrary approach, we said, 

would reduce the number of carryover RINs in the market to 

“almost zero.” Id. at 715. “Without the flexibility and liquidity 

provided by carryover RINs, EPA reasoned that obligated 

parties facing unexpected shortfalls or increased demand for 

transportation fuel [might] be left with no way to comply with 

the statute.” Id. We thus upheld this aspect of “EPA’s 

interpretation of the ‘inadequate domestic supply’ waiver 

provision.” Id. 
18 

ACE interpreted a different waiver provision, but its logic 

applies here. As in ACE, “[w]e look first to the text of the 

statute.” Id. at 714. When triggered, the cellulosic waiver 

provision, like the inadequate-supply provision, contemplates 

a reduction in the renewable fuel requirements the statute 

specifies. In the case of the cellulosic waiver provision, EPA 

must “reduce the applicable volume of cellulosic biofuel” in 

the statutory table “to the projected volume available during 

that calendar year.” See 42 U.S.C. § 7545(o)(7)(D)(i). A 

provision separate from either of the waiver authorities requires 

EPA to create a “credit program.” Id. § 7545(o)(5) 

(capitalization altered). “Congress contemplated that an 

obligated party would be allowed to carry over credits from one 

year into the next: One of the credit program’s provisions 

states that credits generated in the credit program ‘shall be valid 

to show compliance for the 12 months as of the date of 

generation.’” ACE, 864 F.3d at 714 (quoting 42 U.S.C. 

§ 7545(o)(5)(C)). “But nothing in the text of either [the waiver 

or the credit] provision indicates” that the projected volume of 

available cellulosic biofuel “must include any available 

‘carryover’ credits from the prior year.” Id. 

The Biofuel Petitioners would have us infer a requirement 

to count carryover RINs as a source of available cellulosic 

biofuel from the statutory structure. They point out that the 

cellulosic waiver provision contains two relevant “volumetric 

terms.” Biofuel Br. 21. First, to determine whether the waiver 

provision is triggered, EPA must calculate the “projected 

volume of cellulosic biofuel production.” 42 U.S.C. 

§ 7454(o)(7)(D)(i). Second, if the provision is triggered, EPA 

must reduce the statutory volume to the “projected volume 

available” for that calendar year. Id. These two terms, they 

insist, “cannot both mean the same thing.” Biofuel Br. 21. In 

their view, the former refers to the “cellulosic biofuel projected 

to be produced during the year in question,” whereas the latter 
19 

refers to the fuel “projected to be available to obligated parties 

for compliance during that year,” which, they claim, includes 

the portion of the prior year’s production that remains available 

for compliance in the current year in the form of carryover 

RINs. Id. 

In fact, however, the text and structure of the provision 

foreclose the Biofuel Petitioners’ reading. On their reading, the 

cellulosic waiver provision could require EPA to raise the 

applicable volume of cellulosic biofuel, despite the fact that the 

provision explicitly calls for a “reduc[tion].” 42 U.S.C. 

§ 7545(o)(7)(D)(i). Consider the statutory volume for 2022: 16 

billion gallons. See Id. § 7545(o)(2)(B)(i)(III). Suppose that 

EPA pegged “the projected volume of cellulosic biofuel 

production” at 15.9 billion gallons, all of which, let us assume, 

would be available for compliance purposes. And suppose that 

EPA projected that an additional 200 million gallons of 

carryover cellulosic RINs would be available for compliance 

for that year. Because the projected volume of production 

(15.9 billion gallons) “is less than” the statutory volume (16 

billion gallons), EPA would be required to “reduce the 

applicable volume of cellulosic biofuel . . . to the projected 

volume available during that calendar year.” Id.

§ 7545(o)(7)(D)(i). But, on the Biofuel Petitioners’ reading, 

there would be 16.1 billion gallons of cellulosic biofuel 

available for compliance purposes—the 15.9 billion gallons 

produced that year plus the 200 million gallons produced the 

previous year but available in the form of carryover RINs. 

Thus, EPA would be required to somehow “reduce” the 

applicable volume from 16 billion gallons to 16.1 billion 

gallons. 

The better reading of the statute avoids such absurd results. 

See Ctr. for Biological Diversity v. EPA, 722 F.3d 401, 411 

(D.C. Cir. 2013). “When Congress uses the same word in 
20 

different parts of a statute, it usually means the same thing.” 

PDK Laby’s Inc. v. DEA, 362 F.3d 786, 796 (D.C. Cir. 2004). 

As the Refiner Intervenors suggest, the term “projected volume 

available” is best read as a subset of the “projected volume 

of . . . production.” See Refiner Intervenors Br. 5-7. The term 

“available” thus operates as a modifier that narrows the 

relevant category of “projected volume” of cellulosic biofuel 

production, allowing EPA to account for situations where some 

portion of the projected volume of production may not be 

available to use for compliance. That may happen, for 

example, when cellulosic biofuel is produced in facilities that 

“sell the [fuel] they produce into non-transportation markets.” 

See 80 Fed. Reg. at 77,506 n.217. 

On this reading, the cellulosic waiver provision, when 

triggered, inevitably calls for a “reduc[tion]” in the applicable 

volume of cellulosic biofuel. Consider, again, the 2022 

statutory volume of 16 billion gallons. If the “projected 

volume of . . . production” is 15.9 billion gallons, EPA will be 

required to reduce the statutory volume to the “projected 

volume available,” which will necessarily be less than the 

statutory volume. 42 U.S.C. § 7545(o)(7)(D)(i). 

In linking the “projected volume of . . . production” with 

the “projected volume available,” we do not embrace a 

definitive interpretation of the former term. For present 

purposes, it is enough to conclude, as the Biofuel Petitioners 

concede, that the term “projected volume of . . . production” 

does not include volume reflected in carryover RINs. See

Biofuel Br. 21 (“‘[T]he projected volume of cellulosic biofuel 

production’ refers to cellulosic biofuel projected to be 

produced during the year in question.”). That conclusion 

makes good sense. The cellulosic waiver provision instructs 

EPA to calculate the “projected volume of . . . production” 

“based on the estimate provided under paragraph (3)(A),” 
21 

which refers to “an estimate . . . of the volumes of 

transportation fuel, biomass-based diesel, and cellulosic 

biofuel projected to be sold or introduced into commerce in the 

United States.” See 42 U.S.C. § 7545(o)(3)(A). The estimate 

on which the “projected volume of . . . production” must be 

made, then, is an estimate of actual fuel use, not carryover 

RINs. It follows that the “projected volume available” also 

does not encompass carryover RINs. We leave for another day 

other questions regarding the scope of the “projected volume 

of . . . production,” including, for example, whether the term 

may or must include imported cellulosic biofuel. See EPA 

Response to Comments (RTC) 45-46 (2022) (J.A. 485-86). 

The exclusion of carryover RINs “makes eminent 

sense . . . when considered in light of the purposes of the 

Renewable Fuel Program statute.” ACE, 864 F.3d at 714. The 

carryover RIN bank is of “critical importance . . . to the 

functioning of the renewable fuel market and to the ability of 

obligated parties to comply with their obligations.” Id. It 

provides crucial “flexibility and liquidity.” Id. at 715. Under 

the Biofuel Petitioners’ reading, however, “the number of 

carryover RINs in the market would be reduced to almost 

zero.” Id. Every time the cellulosic waiver provision is 

triggered, EPA would be required to set the applicable volume 

of cellulosic biofuel at a level that would systemically draw 

down or eliminate the bank of carryover cellulosic RINs. For 

good reason, we rejected a similar reading of the inadequate 

domestic supply waiver provision in ACE. Id. at 714-15. 

To be sure, there are differences between the cellulosic 

waiver provision and the inadequate domestic supply provision 

at issue in ACE. As the Biofuel Petitioners point out, EPA must 

issue cellulosic waiver credits when it reduces the cellulosic 

volume requirements under the cellulosic waiver provision. 

See 42 U.S.C. § 7545(o)(7)(D)(ii). Contrary to the Biofuel 
22 

Petitioners’ argument, however, the availability of cellulosic 

waiver credits does not negate the role of carryover cellulosic 

RINs. Rather, they work together to provide additional 

flexibility to obligated parties in satisfying the cellulosic 

biofuel requirements. Such flexibility is particularly sensible 

given the heightened uncertainty surrounding the production of 

cellulosic biofuel at the inception of the Program. Indeed, 

because “there was no commercial-scale production at all” for 

cellulosic biofuel at the time, the statutory volumes assumed 

“significant innovation in the industry.” Am. Petroleum, 706 

F.3d at 476. 

For the foregoing reasons, we hold that the cellulosic 

waiver provision unambiguously excludes carryover cellulosic 

RINs from the “projected volume available.” We reject the 

Biofuel Petitioners’ various arbitrary and capricious 

challenges, which rely on the (mistaken) assumption that EPA 

selected from among a range of “permissible” interpretations. 

Biofuel Br. 31. And we therefore reject the Biofuel Petitioners’ 

challenges to the cellulosic biofuel volumes for the years 2020, 

2021, and 2022. Because we uphold the cellulosic biofuel 

volumes under the cellulosic waiver provision, we need not 

address whether—absent application of the cellulosic waiver 

provision—EPA could have or was required to set them at a 

higher level under the reset provision alone. 

B. 

We now address the Refiner Petitioners’ challenges to the 

total renewable fuel and advanced biofuel volumes for 2022, 

the new formula for calculating the percentage standards, and 

the supplemental volume for 2022. 
23 

1. 

The Refiner Petitioners challenge the 2022 total renewable 

fuel and advanced biofuel volumes. As mentioned, EPA set 

those volumes under both the cellulosic waiver provision and 

reset provision. The Refiner Petitioners challenge the volumes 

on four grounds. We address each in turn. 

First, the Refiner Petitioners argue that, when it set them 

midway through that year, EPA “failed to adequately consider 

the retroactivity” of the 2022 applicable volumes. Refiner Br. 

18. In their view, EPA should have set the 2022 applicable 

volumes based on year-to-date production levels, rather than 

try to induce the market to increase production levels during 

the remaining months of 2022. We have made clear, however, 

that EPA “may promulgate late renewable fuel requirements—

and even apply those standards retroactively—so long as EPA 

reasonably considers and mitigates any hardship caused to 

obligated parties by reason of the lateness.” ACE, 864 F.3d at 

718. In assessing whether EPA has acted reasonably, we look 

to “whether obligated parties had adequate lead time and access 

to a sufficient number of RINs to comply with the delayed 

requirement.” Id. (internal quotation marks omitted). 

Here, EPA took sufficient care to minimize the hardship 

caused by its late issuance of the 2022 standards. EPA 

extended the compliance deadline, giving the obligated parties 

at least 11 months to comply with the renewable fuel 

requirements. 87 Fed. Reg. at 39,624. We have already held 

in Wynnewood that the new compliance deadline “is both 

reasonable and reasonably justified by the agency.” 77 F.4th 

at 783. And the proposed rule, published in February 2020, 

gave “obligated parties . . . many months’ notice of EPA’s 

intent to issue [the] volume requirements.” ACE, 864 F.3d at 

771; see also Wynnewood, 77 F.4th at 783. EPA also 
24 

reasonably determined that the “market [was] capable of 

meeting the increased 2022 volumes through increased biofuel 

use” and that “any shortfall can be met by carryover RINs.” 87 

Fed. Reg. at 39,624. 

The Refiner Petitioners do not dispute that they have 

access to enough RINs; instead, they complain that they may 

have to rely on imported fuel, more expensive biodiesel and 

renewable diesel, and carryover RINs to satisfy the standard. 

See Refiner Br. 18. This, they contend, will unreasonably drive 

up compliance costs and increase greenhouse gas emissions. 

Id. at 15, 17. But we “give EPA considerable discretion to 

weigh and balance the various factors required by statute,” 

especially where, as here, the statute “does not state what 

weight should be accorded to the relevant factors.” Nat’l 

Wildlife Fed’n v. EPA, 286 F.3d 554, 570 (D.C. Cir. 2002). 

EPA concluded that “[t]he advanced biofuel and total 

renewable fuel volumes strike a balance between numerous 

competing statutory factors.” 87 Fed. Reg. at 39,623. That 

assessment was not arbitrary or capricious. 

Second, the Refiner Petitioners argue that EPA arbitrarily 

and capriciously relied on the so-called “implied statutory 

targets” in setting the applicable volumes. Refiner Br. 14. As 

discussed, the implied statutory volume reflects the volumes of 

renewable fuels—such as conventional renewable fuel and 

non-cellulosic advanced biofuel—that an obligated party may, 

but need not, use to comply with the renewable fuel 

requirements. See 87 Fed. Reg. at 39,623 n.127. The concept 

is most readily understood by way of example. The 2022 

statutory volume called for 36 billion gallons of total renewable 

fuel, 21 billion gallons of which were required to be advanced 

biofuel, resulting in an implied volume of 15 billion gallons of 

conventional renewable fuel. Likewise, of the 21 billion 

gallons of advanced biofuel, the statute required 16 billion 
25 

gallons to be cellulosic biofuel, implying that obligated parties 

may comply with the advanced biofuel requirement by using at 

least the requisite volume of cellulosic biofuel and at most five 

billion gallons of non-cellulosic advanced biofuel. 

In setting the 2022 applicable volumes, EPA held constant 

these implied statutory targets, even as it lowered the overall 

applicable volumes. See 87 Fed. Reg. at 39,623. EPA lowered 

the total renewable fuel volume from 36 billion to 20.63 billion 

gallons; the advanced biofuel volume from 21 billion to 5.63 

billion gallons; and the cellulosic biofuel volume from 16 

billion to 0.63 billion gallons. Thus, the implied volumes—15 

billion gallons of conventional renewable fuel and five billion 

gallons non-cellulosic advanced biofuel—remained the same. 

See id. 

The Refiner Petitioners contend that was a mistake. In 

their view, the reset provision required EPA to “replace the 

statutory volumes with new applicable volumes,” rendering the 

implied statutory volumes obsolete. Refiner Br. 14 (emphases 

omitted). Any reliance on those implied volumes, they insist, 

is arbitrary and capricious. 

We disagree. EPA reasonably used the implied statutory 

volumes in setting the 2022 applicable volumes. The implied 

volumes are not binding. As EPA explained in response to a 

comment, “the implied volume requirement for conventional 

renewable fuel is not a requirement per se, but instead is only a 

description of that portion of the total volume requirement 

which is not required to be advanced biofuel.” RTC at 119 

(J.A. 495). Nothing in the cellulosic waiver provision or the 

reset provision limits EPA’s discretion to retain the implied 

volumes for conventional renewable fuel and non-cellulosic 

advanced biofuel. 
26 

To the contrary, the cellulosic waiver provision—which 

EPA also invoked in setting the 2022 volumes—inevitably 

implies that compliance may be accomplished in part by 

reliance on other renewable fuels. As we have observed, “a 

reduction to the cellulosic biofuel volume requirement leaves a 

gap in the supply of advanced biofuel available to satisfy the 

advanced biofuel volume requirement.” ACE, 864 F.3d at 731. 

The cellulosic waiver provision authorizes EPA to close that 

gap by subtracting from the total renewable fuel and advanced 

biofuel volumes the amount that would have been filled by the 

now-waived cellulosic biofuel volumes. Here, EPA exercised 

the cellulosic waiver provision when it determined that there 

would not be enough cellulosic biofuel production to meet the 

16-billion-gallon statutory volume. It therefore reduced the 

applicable volume of cellulosic biofuel to the projected volume 

available during that calendar year. And, to close the resultant 

gap, it reduced the advanced biofuel and total renewable fuel 

volumes by the same amount. The reductions were based on 

updated projections of the availability of cellulosic biofuel; 

they had nothing to do with the availability (or lack thereof) of 

non-cellulosic advanced biofuel or conventional renewable 

fuel. So, EPA reasonably held those implied volumes constant. 

Because we hold that EPA reasonably declined to change the 

implied volumes, we need not address the Renewable 

Intervenors’ argument that EPA lacked authority to do so. 

Third, the Refiner Petitioners contend that EPA, apart 

from inadequately weighing environmental costs in balancing 

the reset factors, violated the Endangered Species Act. They 

make two arguments to fold this point into the Clean Air Act: 

First, they say the reset factors incorporate the ESA by 

referencing environmental impact; and second, the judicialreview provision of the Clean Air Act, in requiring us to reverse 

rules that are not “in accordance with law,” 42 U.S.C. 

§ 7607(d)(9)(A), sweeps in violations of the ESA. Neither 
27 

argument is properly before us: The first was not adequately 

developed before EPA, and the second was not adequately 

developed in the Refiner Petitioners’ opening brief. 

Fourth, the Refiner Petitioners argue that EPA failed to 

adequately explain how it balanced the statutory factors, and 

the partial dissent agrees. In particular, the Refiners fault EPA 

for crediting nonmonetized benefits over monetized costs. 

They point to a table in EPA’s Regulatory Impact Analysis that 

identifies nearly 30 potential impacts—both costs and 

benefits—associated with the Final Rule. See RIA, at v (J.A. 

151). EPA compiled the table “to provide additional 

information to the public regarding this rulemaking and to 

comply with [OMB] Circular A4,” which provides guidance to 

agencies on conducting and reporting their regulatory analysis. 

RIA, at iv (J.A. 150). Most of the listed impacts in EPA’s table 

are not monetized. For example, EPA places no specific dollar 

value on the benefit of increased employment attributable to 

increased renewable fuel production or the cost associated with 

higher food prices. Id. At the same time, EPA monetized two 

impacts, calculating that the Final Rule would generate $294 

million in increased energy security and $7 billion in costs from 

higher fuel prices. EPA’s failure to reconcile this “vast 

disparity” in costs over benefits, they argue, is arbitrary and 

capricious. Refiner Reply Br. 6. 

This argument is flawed: It faults EPA for the fact that the 

statute Congress drafted is designed to yield benefits that it 

deemed important but understood are not easily monetizable. 

As the partial dissent recognizes, renewable fuels are generally 

more expensive than fossil fuels. Diss. Op. 3. (The partial 

dissent emphasizes EPA’s projection that the 2022 standards 

will increase aggregate fuel costs for consumers by $5.72 

billion. See id. at 1. For context, that cashes out at the pump 

in a one cent per gallon increase in the cost of E10, the most 
28 

common blend of transportation fuel sold in the United States. 

See RIA at 298 (J.A. 453)). If it were otherwise, the RFS 

Program would be largely superfluous; the market would 

independently incentivize the production and consumption of 

renewable fuels. Because renewable fuels are more expensive, 

however, “Congress adopted a ‘market forcing policy’ 

intended to ‘overcome constraints in the market’ by creating 

‘demand pressure to increase consumption’ of renewable 

fuels.” ACE, 864 F.3d at 710 (quoting 80 Fed. Reg. at 77,423). 

And that demand pressure comes with costs. In other words, in 

enacting the Renewable Fuel Standards Program, Congress 

made a policy choice to accept higher fuel prices in order to 

reap the benefits of “greater energy independence and . . . 

reduce[d] greenhouse gas emissions.” Id. at 696. That those 

benefits are not easily monetizable does not mean they are less 

valuable. But it does mean that simply weighing the 

monetizable costs against the monetizable benefits—and 

thereby excluding the primary benefits for which Congress 

created the Program—will yield a misleading result. 

EPA recognized as much in the Final Rule. The agency 

provided information on benefits and costs to comply with 

OMB Circular A-4. But, as we have elsewhere explained, “the 

Circular itself calls for a qualitative analysis” where “no 

quantified information on benefits, costs, and effectiveness can 

be produced.” Mozilla Corp. v. FCC, 940 F.3d 1, 70 (D.C. Cir. 

2019) (per curiam) (quoting OMB Circular A-4, at 10 (2003)). 

EPA found that it would be infeasible to monetize the benefits 

associated with reduced greenhouse gas emissions. RIA at 70 

(J.A. 225). In such a situation, Circular A-4 explains, a 

quantitative cost-benefit analysis can “be misleading, because 

the calculation of new benefits . . . does not provide a full 

evaluation of all relevant benefits and costs.” Mozilla, 940 

F.3d at 71 (quoting OMB Circular A-4, at 10). For that reason, 

EPA conducted a qualitative analysis and concluded that “[t]he 
29 

advanced biofuel and total renewable fuel volumes strike a 

balance between numerous competing statutory factors.” 87 

Fed. Reg. at 39,623. In doing so, EPA reasonably identified 

benefits in the form of “the potential for growth in the volume 

of renewable fuel produced and consumed in the U.S., and the 

potential energy security and climate change benefits that 

producing and consuming increasing volumes of qualifying 

renewable fuels provide” as well as “the potential negative 

impacts of renewable fuels produced from crops such as corn 

or soybeans on environmental factors such as the conversion of 

wetlands, ecosystems, and wildlife habitat, water quality, and 

water supply.” Id. at 39,623-24. And EPA likewise concluded 

that the benefits of the cellulosic biofuel volume—including 

climate-change related benefits—outweigh its predictable 

effect on fuel prices. Id. at 39,623 

To the extent EPA could monetize the benefits associated 

with reduced greenhouse gas emissions, it supplies an array of 

calculations to help contextualize the Final Rule. EPA offered 

an “illustrative assessment” of benefits associated with reduced 

greenhouse gas emissions in light of various assumptions. RIA 

at 71 (J.A. 226). As EPA explained, reductions in greenhouse 

gas emissions can have a cascading beneficial impact on 

“changes in net agricultural productivity, human health effects, 

property damage from increased flood risk and natural 

disasters, disruption of energy systems, risk of conflict, 

environmental migration, and the value of ecosystem services.” 

Id. at 81 (J.A. 236). And because greenhouse gas “emissions 

today continue to impact society far out into the future,” id. at 

87 (J.A. 242), EPA explained, the results of such a cost-benefit 

analysis will depend in large part on how heavily we discount 

“costs that accrue to future generations,” id. (J.A. 242). 

Notwithstanding these “limitations and uncertainties,” id. (J.A. 

242), EPA acknowledged the possibility that the 2022 

standards could result in monetary benefits ranging from $1.95 
30 

billion to $25.84 billion, depending on the applicable discount 

rate, see id. at 93, Table 3.2.2.3.2-2 (J.A.248). To be sure, EPA 

acknowledged that the various uncertainties prevented the 

agency from relying on these figures in justifying the Final 

Rule. See id. at 71 (J.A. 226). Nevertheless, these illustrative 

benefits—as to which the Refiner Petitioners offer no 

objections—help to demonstrate the magnitude of the potential 

climate-change related benefits EPA associated with the Final 

Rule. It was not unreasonable for EPA to account for those 

potential benefits in setting the 2022 standards. 

We therefore reject the Refiner Petitioners’ challenges to 

the 2022 total renewable fuel and advanced biofuel volumes. 

2. 

Some of the Refiner Petitioners challenge EPA’s new 

formula for calculating the annual percentage standards. See 

Refiner Br. 22 & n.8. As discussed, the old formula accounted 

for small refinery exemptions by excluding from the total 

transportation fuel introduced into the U.S. economy the 

amount of such fuel produced by small refineries that had 

received an exemption by the time the rule was promulgated. 

The new formula also excludes fuel produced by small 

refineries that are projected for but have yet to receive an 

exemption for the coming year. 

To understand the difference, consider an example. 

Suppose the total transportation fuel projected for a given year 

is 100 billion gallons, and the required total renewable fuel is 

10 billion gallons. The percentage standard would be ten 

percent (i.e., 10 / 100). But suppose small refineries that 

already obtained exemptions are responsible for five billion 

gallons of transportation fuel, and that other small refineries 

projected to receive exemptions they have yet to obtain are 

responsible for another five billion gallons. Under the old 
31 

formula, the percentage standard would be 10.5 percent (i.e., 

10 / 95). Under the new formula, it would be 11.1 percent (i.e., 

10 / 90). 

The Refiner Petitioners argue that EPA’s new formula 

violates the statute. And even if it were statutorily permissible, 

they argue, EPA failed to justify the extent to which it departs 

from the old formula. We disagree. The statute does not 

confine EPA to the Refiner Petitioners’ preferred method of 

accounting for small-refinery exemptions, and EPA’s choice to 

account for them both retrospectively and prospectively is not 

arbitrary or capricious. 

EPA locates its authority to account for the small refinery 

exemptions in the statutory language directing EPA to 

promulgate regulations to “ensure” that the applicable volumes 

“are met.” See 87 Fed. Reg. at 39,632 (quoting 42 U.S.C. 

§ 7545(o)(3)(B)(i)). The Refiner Petitioners do not question 

this authority. To the contrary, they concede that EPA may 

adjust the percentage standards to account for small refinery 

exemptions already granted at the time a rule is promulgated. 

See Refiner Br. 24. The only question, then, is whether the 

statute otherwise withholds from EPA the authority to account 

for such exemptions on a prospective basis. 

The Refiner Petitioners point to two provisions, but neither 

imposes the claimed restriction. The first, 42 U.S.C. 

§ 7545(o)(3)(C)(ii), requires EPA to reduce the requisite 

percentage standards to “account for the use of renewable fuel 

during the previous calendar year by small refineries that are 

exempt.” The Refiner Petitioners argue that this provision 

confirms that exemptions must be granted “on a retrospective 

basis.” Refiner Br. 24. We disagree. Section 7545(o)(3)(C)(ii) 

addresses a different issue; it and the new formula work to 

correct opposing distortions that result from small refinery 
32 

exemptions. Section 7545(o)(3)(C)(ii) prevents 

overcompliance by crediting any renewable fuel use by exempt 

small refineries toward meeting the overall national volume 

requirements. Returning to our example from above, if exempt 

small refineries nevertheless blended one hundred million 

gallons of renewable fuel, Section 7545(o)(3)(C)(ii) would 

appear to require EPA to subtract one hundred million gallons 

from the numerator in setting the following year’s percentage 

standard. The percentage standard would go from 10 percent 

(10 / 100) to 9.9 percent (9.9 / 100). This difference—a tenth 

of one percent—represents the renewable fuel used by exempt 

small refineries that were under no obligation to do so. The 

new formula, on the other hand, helps prevent 

undercompliance by ensuring that the leeway afforded to small 

refineries does not lead to percentage standards that undershoot 

the target renewable fuel requirements. Given these competing 

aims, we conclude that Section 7545(o)(3)(C)(ii) has no 

bearing on whether or how EPA may account for the 

transportation fuel used by small refineries that are or will be 

exempted from their renewable fuel obligations. 

The second provision the Refiner Petitioners cite, Section 

7545(o)(3)(C)(i), requires EPA to adjust the percentage 

standards to avoid the imposition of “redundant obligations.” 

The Refiner Petitioners contend that the new formula runs 

afoul of this provision because it could require obligated parties 

to produce more renewable fuel than would be necessary to 

satisfy the applicable volumes. Refiner Br. 25. The Refiner 

Petitioners are correct that, because it relies on an estimate of 

future exemptions, the new formula could lead to 

overcompliance. If EPA overestimates the number of small 

refinery exemptions it will grant, the percentage standard may 

lead to obligated parties producing excess renewable fuel. But 

the Refiner Petitioners are wrong that the new formula 

impermissibly results in redundant obligations. As the Refiner 
33 

Petitioners concede, “imprecision is inherent in the statute.” 

Refiner Reply Br. 14-15. Overcompliance risks also occur, for 

example, whenever EPA estimates the national volume of 

transportation fuel that will be used that year. If EPA 

underestimates the national volume, the percentage standards 

will be set too high, causing obligated parties to produce more 

renewable fuel than necessary to satisfy the applicable 

volumes. EPA no more imposes “redundant obligations” by 

underestimating the total national volume of transportation fuel 

than it does by overestimating the total volume of small 

refinery exemptions. As with cellulosic biofuel projections, 

EPA must “take neutral aim at accuracy” when projecting the 

total of small refinery exemptions it will grant. Am. Petroleum, 

706 F.3d at 477. An EPA projection that turns out to be off the 

mark does not retroactively violate Section 7545(o)(3)(C)(i). 

We therefore conclude that EPA has the statutory authority to 

account for small refinery exemptions on a prospective basis. 

 The Refiner Petitioners also argue that, even if the new 

formula complies with the statute, EPA failed to justify its 

departure from the old formula. They point out that, in 

defending the old formula, EPA had emphasized the difficulty 

of accurately projecting how many small refineries would 

receive exemptions. See Refiner Br. 28. Like any other 

agency, EPA may “depart from a prior policy position” so long 

as it “display[s] awareness that it is changing position.” FCC 

v. Fox Television Stations, Inc., 556 U.S. 502, 515 (2009) 

(emphasis omitted). In doing so, EPA “need not demonstrate 

to a court’s satisfaction that the reasons for the new policy are 

better than the reasons for the old one; it suffices that the new 

policy is permissible under the statute, that there are good 

reasons for it, and that the agency believes it to be better, which 

the conscious change of course adequately indicates.” Id. 
34 

 EPA adequately justified its decision to adopt the new 

formula. In the Final Rule, EPA explained that it “believe[s] 

[it] can project the exempt small refinery volume with 

reasonable accuracy despite the uncertainties associated with 

this projection.” 87 Fed. Reg. at 39,632. EPA first noted that 

the new formula required a projection of “only the aggregate 

exempted volume in a given compliance year,” meaning it 

would not have to “wrestle with the difficulties” of predicting 

the outcomes of particular small refinery exemption 

applications. Id. In addition, EPA explained that, unlike in 

previous years, EPA had the “benefit of a stated policy for 

adjudicating [small refinery exemption] applications,” a fact 

that, in its view, “strongly augment[ed]” its ability to make 

such projections. Id. EPA also emphasized that the stated 

policy would likely lead to the rejection of all small refinery 

exemption applications, see id. at 39,633, making such 

projections even easier. EPA developed that new policy in 

response to the Tenth Circuit’s (now-vacated) decision in 

Renewable Fuels Ass’n v. EPA, 948 F.3d 1206 (10th Cir. 

2020), rev’d sub nom. HollyFrontier, 141 S. Ct. 2172, and first 

invoked the policy as a basis for denying small refinery 

exemptions in April 2022. See 87 Fed. Reg. at 39,633 n.192. 

Whether that small refinery exemption policy is permissible is 

at issue in another set of pending petitions. See Sinclair 

Wyoming Refin. Co. LLC. v. EPA, No. 22-1073. No such 

challenge is presented here, and we take no position on its 

merits. But EPA had the authority to rely on that new 

exemption policy as a reason to abandon the old formula and 

adopt the new formula. Finally, EPA explained that it could 

make such projections because it had already decided many of 

the relevant applications, giving it a better sense of the total 

volume of exemptions it would grant. 87 Fed. Reg. at 39,633. 

Thus, EPA reasonably explained its adoption of the new 

formula. 
35 

 In sum, EPA has the authority to adjust the percentage 

standards to account for small refinery exemptions; nothing in 

the statute limits EPA to making such adjustments on a 

retrospective basis; and EPA adequately justified its decision 

to also make such adjustments on a prospective basis. We 

therefore reject the Refiner Petitioners’ challenges to the new 

formula. 

3. 

The last set of challenges relates to the 250-million-gallon 

supplemental volume EPA imposed in response to our remand 

in ACE. The Refiner Petitioners challenge the supplemental 

volume as both unlawful and arbitrary and capricious. We 

address each challenge in turn. 

To start, we conclude that EPA had the statutory authority 

to impose the supplemental volume for 2022. To justify the 

volume, EPA invoked its power to “ensure” that applicable 

volumes “are met.” 87 Fed. Reg. at 39,629 (citing 42 U.S.C. 

§ 7545(o)(3)(B)(i)). The Refiner Petitioners object that EPA 

lacks authority to impose a 2022 volume to make up for the fact 

that the 2016 volume was too low. They argue that the statute 

does not provide a “true-up mechanism on the back end if 

things didn’t go as planned.” Refiner Br. 32. That argument is 

unpersuasive. 

We have made clear that EPA must ensure the applicable 

volumes are met, “regardless of EPA delay.” Monroe Energy, 

750 F.3d at 920 (quoting Nat’l Petrochem., 630 F.3d at 163). 

Therefore, EPA may increase later year volumes to make sure 

that volumes that should have been met in earlier years “are 

eventually sold or introduced into commerce.” Nat’l 

Petrochem., 630 F.3d at 157. 
36 

That is the lesson of National Petrochemical and Refiners 

Association v. EPA, 630 F.3d 145 (D.C. Cir. 2010). That case 

concerned the 2009 and 2010 applicable volumes of biomassbased diesel. Id. at 150. By statute, the applicable volume for 

2009 was 0.5 billion gallons, while the volume for 2010 was 

0.65 billion gallons. Id. (citing 42 U.S.C. 

§ 7545(o)(2)(B)(i)(IV)). EPA missed the deadline to set the 

2009 standards. Id. at 148 (citing 42 U.S.C. 

§ 7545(o)(3)(B)(i)). To make up for the lost volume, EPA 

decided to “combin[e] the 2009 and 2010 biomass-based diesel 

statutory volume requirements to create one 2010 standard.” 

Id. at 150. Therefore, the “obligated parties were required to 

use 1.15 billion gallons of biomass-based diesel based on the 

combined volume requirements for 2009/2010.” Id. at 151. 

The petitioners challenged the 2009/2010 volume, arguing that 

“EPA lacked authority to increase the 2010 volume 

requirement to include the 2009 volume requirement.” Id. at 

152. We rejected that claim, holding that EPA’s delay did not 

“preclud[e] EPA from ensuring that both the 2009 and 2010 

applicable volumes of biomass-based diesel are eventually sold 

or introduced into commerce.” Id. at 157. 

The partial dissent’s attempt to distinguish National 

Petrochemical falls short. It contends that the 2009 standards 

in that case, although promulgated late and consolidated with 

the 2010 standards, still “retained the compliance flexibilities 

of normal 2009 standards” since compliance could be met 

“with credits generated in 2008 or 2009.” Diss. Op. 22. That 

is not quite right. Obligated parties could also use 2010 RINs 

to comply with their 2009 renewable fuel obligations. See

Nat’l Petrochem., 630 F.3d at 162. In addition, an obligated 

party could carry forward a portion of its 2010 obligations into 

2011, meaning that it could functionally use 2011 RINs to 

satisfy its 2009 renewable obligations. Id. at 151 n.19. We say 

“functionally” because technically an obligated party was 
37 

permitted to carry forward only the portion of the 2009/2010 

volume attributable to its 2010 obligations. Id. But that is still 

more compliance flexibility than afforded by the statutory 

carry-forward provision, which would have prohibited an 

obligated party that carried forward a 2009 deficit into 2010 to 

then carry forward a 2010 deficit into 2011. See 42 U.S.C. 

§ 7545(o)(5)(D). In other words, under the rule we upheld in 

National Petrochemical, EPA authorized obligated parties to 

make up for volumes that should have been satisfied in 2009 

through increased renewable fuel production in 2010 or even 

2011. In approving a remedy allowing use of 2008, 2009, 

2010, or 2011 RINs to comply with the 2009 standards, we 

sustained EPA’s authority to impose supplemental standards to 

ensure that the applicable volumes of renewable fuels are 

eventually sold or introduced into commerce. 

By the same token, EPA has the authority to impose a 

supplemental 2022 volume to make up for volume that should 

have been satisfied in 2016. EPA impermissibly waived 500 

million gallons of renewable fuel from the 2016 applicable 

volume. ACE, 864 F.3d at 713. We therefore “vacate[d] EPA’s 

decision to reduce the total renewable fuel volume 

requirements for 2016 through use of the ‘inadequate domestic 

supply’ waiver provision and remand[ed] the Final Rule to the 

agency for further consideration in light of our decision.” Id. 

EPA missed the deadline to establish the appropriate 2016 

volume but, under National Petrochemical, it has the statutory 

authority to “ensure” that obligated parties “eventually” sell or 

introduce that fuel into commerce. Nat’l Petrochem., 630 F.3d 

at 157. 

To be sure, the supplemental standard here was more 

delayed than the one at issue in National Petrochemical. It 

came six years after the relevant compliance period, rather than 

a single year. And EPA gave obligated parties more 
38 

compliance flexibility in that case than it did here: In National 

Petrochemical, EPA allowed obligated parties to use 

2008/2009 RINs to comply with the supplemental 2010 

standard, whereas in this case EPA did not permit them to use 

2015/2016 RINs to comply with the 2022 supplemental 

standard. This, however, has no bearing on EPA’s statutory 

authority to promulgate the standard. It goes, rather, to whether 

the standard is reasonable. To that end, the Refiner Petitioners 

contend that, even if EPA had authority to impose a 

supplemental volume, its decision to do so here was arbitrary 

and capricious. None of their various arguments is meritorious. 

First, the Refiner Petitioners argue that EPA arbitrarily 

decides when it will and will not backfill missing volumes. 

Refiner Br. 32-33. They point out that EPA does not impose 

supplemental volumes to “correct the volume requirements 

based on deviations in [fuel] projections from the volumes 

actually consumed.” Refiner Br. 32 (quoting RIA at 5 (J.A. 

160)). For example, suppose that EPA sets the applicable 

volume of total renewable fuel at 10 billion gallons and projects 

100 billion gallons of transportation fuel will be introduced into 

the market, yielding a percentage standard of 10 percent. If 

EPA’s projection were too high, such that only 90 billion 

gallons of transportation fuel were in fact introduced into the 

market, then, pursuant to the percentage standard, only 9 billion 

gallons of renewable fuel would have been introduced into the 

market. In such a case, as EPA concedes, EPA would not 

implement a one-billion-gallon supplemental volume to 

account for that shortfall. See RIA at 5 (J.A. 160). 

The two situations are materially different, however, 

making it reasonable for EPA to treat them differently. As 

discussed, EPA establishes the percentage standards by 

dividing the applicable volume for each renewable fuel type by 

an estimate of the national volume of transportation fuel that 
39 

will be used that year. The numerator represents the applicable 

volume required by the Program: the amount of renewable fuel 

EPA must “ensure” is “met.” 42 U.S.C. § 7545(o)(3)(B)(i). 

The denominator is a factual forecast: the amount of 

transportation fuel “projected to be sold or introduced into 

commerce in the United States.” Id. § 7545(o)(3)(A). EPA can 

thwart the Program by setting the numerator too low (i.e., 

adopting an impermissibly low applicable volume) or by 

setting the denominator too high (e.g., incorrectly forecasting 

total fuel usage). The former is a legal mistake, and, as 

occurred in ACE, it subjects the resulting percentage standard 

to vacatur. See 864 F.3d at 713. The latter is a technical error 

inherent in the nature of projecting events that have yet to 

occur. As EPA explained, the Program requires that EPA rely 

on such projections. RIA at 5 (J.A. 160). It is not arbitrary and 

capricious for EPA to treat a legal mistake differently from a 

prognostication error. 

Second, the Refiner Petitioners contend that EPA, after 

initially suggesting that it would not impose a supplemental 

volume in response to the ACE remand, failed to explain its 

decision to change course. Refiner Br. 33-34. True, in a 

previous proposed rule EPA suggested it would not impose a 

supplemental volume in order to avoid taxing the carryover 

RIN bank. See 87 Fed. Reg. at 39,629. But EPA 

“recognize[d]” its change of position and explained that it no 

longer believed the supplemental volume would result in a 

drawdown of carryover RINs. Id. Specifically, EPA 

determined that the “market is capable of achieving the 

supplemental volumes with increased biofuel use.” Id. Thus, 

EPA “display[ed] awareness that it is changing position” and 

offered a reasonable basis for doing so. Fox, 556 U.S. at 515. 

Third, the Refiner Petitioners argue that EPA failed to 

consider other options to comply with the ACE remand. 
40 

Refiner Br. 36-39. To the contrary, EPA considered, for 

example, whether it could simply maintain the 2016 volume 

requirements and impose no supplemental volume. RTC at 151 

(J.A. 527). EPA determined that approach would be 

inconsistent with its statutory mandate to “ensure,” even if 

belatedly, that the applicable volumes are met. Id. EPA also 

considered whether to retroactively apply the discretionary 

component of the cellulosic waiver provision or the inadequate 

domestic supply waiver provision. Id. at 151-53 (J.A. 527-29). 

Invocation of those provisions is discretionary, and EPA’s 

choice not to invoke them retroactively was not arbitrary and 

capricious. EPA thus “examine[d] the relevant data and 

articulate[d] a satisfactory explanation for its action including 

a rational connection between the facts found and the choice 

made.” Bluewater Network v. EPA, 370 F.3d 1, 11 (D.C. Cir. 

2004). 

Fourth, the Refiner Petitioners contend that EPA imposed 

the supplemental volume without considering the relevant 

statutory criteria. Refiner Br. 35-36. That argument has it 

backwards. EPA’s statutory obligation is to impose percentage 

standards to meet the statutorily prescribed volumes; it may 

reduce those volumes “only in limited circumstances.” Nat’l 

Petrochem., 630 F.3d at 149. The vacatur in ACE had the effect 

of re-imposing the 500-million-gallon volume requirement. 

That volume requirement had to be met unless lawfully waived. 

Contrary to what appears to be the Refiner Petitioners’ view, 

EPA did not need to rely on some waiver provision—like the 

reset provision—to re-impose the 500 million gallons. In the 

Final Rule, EPA correctly recognized an obligation to impose 

a requirement to “ensure” that the prescribed volume was met. 

It had no obligation to consider the statutory factors as if it were 

devising a volume requirement anew. 
41 

Given that EPA was late in promulgating the supplemental 

volume, it had to “consider[] and mitigate[] any hardship 

caused to obligated parties by reason of the lateness.” ACE, 

864 F.3d at 718. We conclude that EPA did so. EPA 

recognized that the supplemental volume would present 

“significant challenges,” especially in light of “market-forcing 

standards” already set for 2022. 87 Fed. Reg. at 39,629. 

Nevertheless, EPA concluded that “compliance with the 2022 

supplemental standard in addition to the 2022 annual standards 

is feasible and can be achieved through the actual use of 

renewable fuels, including imports, in 2022 as opposed to 

carryover RINs.” Id. at 39,628. Rather than require a single 

500-million-gallon supplemental volume, EPA split the 

obligation “across two compliance years.” Id. at 39,630. To 

the extent the obligated parties come up short, EPA determined 

the supplemental volume “could be met through a drawdown 

of the carryover RIN bank.” Id. at 39,628. As discussed above, 

EPA provided at least 11 months of lead time, giving the 

obligated parties a reasonable period to comply with the 

obligation. See id. And EPA adopted various mechanisms to 

further “mitigate the compliance burden.” Id. at 39,630. EPA 

concluded that the overall benefits of the supplemental volume 

outweigh the potential burdens. Id. That was a reasonable 

conclusion. 

Finally, some Refiner Petitioners argue that EPA should 

have permitted obligated parties to satisfy the supplemental 

volume with 2015/2016 RINs. Refiner Br. 39 & n.12. To be 

sure, doing so would have been more consistent with the 

agency’s approach in National Petrochemical, where obligated 

parties were permitted to use old RINs (from 2008 and 2009) 

alongside new RINs (from 2010) to meet the 2009 standards. 

But EPA considered that option and concluded that doing so 

would be “administratively impractical and highly 

burdensome,” EPA Br. 74, since it would require rescinding 
42 

the 2016 standard, promulgating a new 2016 standard, 

returning the 2015/2016 RINs used for compliance to the 

original owners (some of whom may no longer exist), and 

requiring a new compliance demonstration, RTC at 153-54 

(J.A. 529-30). EPA also explained that it would need to reopen 

compliance for all years from 2016 onward because the twoyear lifespan of RINs means that returning RINs for one year 

creates “cascading impacts on each subsequent year’s 

compliance.” Id. EPA reasonably avoided that relatively 

complex set of adjustments by declining to permit obligated 

parties to satisfy the supplemental volumes with 2015/2016 

RINs. 

CONCLUSION 

For these reasons, the petitions for review are denied. 

So ordered. 
KATSAS, Circuit Judge, concurring in part and dissenting 

in part: In 2022, the Environmental Protection Agency 

substantially increased the minimum volumes of renewable 

fuel that must be sold in the United States as transportation fuel. 

EPA estimated that these new standards would increase annual 

fuel costs for consumers by over $5.72 billion. “[T]hat’s 

billion with a b.” White Stallion Energy Ctr., LLC v. EPA, 748 

F.3d 1222, 1259 (D.C. Cir. 2014) (Kavanaugh, J., concurring 

in part and dissenting in part), rev’d sub nom. Michigan v. EPA, 

576 U.S. 743 (2015). The agency further estimated that the 

new standards would generate only $160 million in quantified 

annual benefits, all coming from increased energy security. 

One need hardly be an expert to see that the $5.72 billion in 

costs is strikingly larger than the $160 million in benefits—

more than 35 times larger, to be precise.

So what justifies a rule for which costs so dramatically 

exceed benefits? The regulatory preamble says very little

about this. For two kinds of renewable fuel, EPA merely stated

the obvious—that the volume requirements strike a balance 

among competing statutory considerations, which include 

“potential” energy security and climate change benefits. See 

Renewable Fuel Standard (RFS) Program: RFS Annual Rules, 

87 Fed. Reg. 39,600, 39,623–24 (July 1, 2022) (Final Rule). 

Yet in doing so, EPA did not even mention the most important 

competing consideration—the $5.72 billion annual increase in 

fuel costs. See id. For a third kind of renewable fuel, EPA 

acknowledged cost considerations but again stressed a

“potential” offsetting climate benefit from reduced 

greenhouse-gas emissions. See id. at 39,623. Nonetheless, 

citing “uncertainty” about how the standards might affect those

emissions, EPA refused to give any “quantified projection of 

the GHG emission impacts of the rule.” Id. at 39,626 n.139.

A regulatory impact analysis elaborates on how EPA 

assessed the governing statutory considerations. Renewable 

Fuel Standard (RFS) Program: RFS Annual Rules, Regulatory 
2

Impact Analysis (June 2022) (RIA). As to any possible climate 

benefit, EPA again hedged its bets: The RIA likewise declined 

to commit to any quantitative estimate, instead repeatedly 

stressing what EPA views as “considerable uncertainty” about 

how renewable fuels might affect greenhouse-gas emissions. 

Id. at 67, 71. The RIA did set forth what EPA described as an 

“illustrative” attempt to estimate climate benefits over the next 

three decades, but the agency expressly disclaimed reliance on

it. Id. at 71 (“This illustrative scenario is not EPA’s assessment 

of the likely greenhouse gas impacts of this rulemaking.”).

To make matters worse, the 2022 standards imposed two 

distinct volume requirements for renewable fuel: a base and a 

supplement. The supplement seeks to cancel out a legal error 

that EPA made in setting the 2016 volume requirement too low. 

But the statute mandates volume requirements to be set, and 

compliance to be assessed, on a year-by-year basis; it provides 

no authority for EPA to transfer volume requirements from one 

year to another. EPA fixed the 2022 volume requirement—

which it regarded as aggressive—based on its assessment of the 

statutory factors governing that inquiry. Then, it added an extra 

quarter-billion gallons to boot.

In my view, the 2022 volume requirements are arbitrarily 

high. According to EPA, their quantified annual costs exceed 

their quantified annual benefits by over $5.5 billion. And 

vague references to potential climate benefits over the course 

of decades, which EPA viewed as too uncertain even to 

estimate, do not make up the difference. Moreover, the 

supplement does not even purport to reflect application of the 
3

governing legal standards. For these reasons, I would set aside

the 2022 volume requirements.

1

I

The Clean Air Act creates a Renewable Fuel Standard 

Program, which requires minimum volumes of renewable fuels 

to be sold in the United States as transportation fuel. 42 U.S.C. 

§ 7545(o)(2)(A)(i). These fuels are produced from renewable 

biomass such as corn, soybeans, or landfill waste, and they 

replace traditional fossil fuels such as gasoline, diesel fuel, and 

natural gas. Id. § 7545(o)(1)(J). Renewable fuels are more 

expensive than traditional fuels. When burned, they emit less 

greenhouse gas. But the production of renewable fuels itself 

can generate significant emissions, from activities such as 

preparing land to grow the necessary feedstocks.

The statute addresses four types of biofuels—renewable 

fuel, advanced biofuel, cellulosic biofuel, and biomass-based 

diesel. The fuels vary according to their feedstocks and 

expected reduction in greenhouse-gas emissions. 42 U.S.C. 

§ 7545(o)(1)(B), (D), (E), (J). Some of these categories are 

nested within others: Cellulosic biofuel and biomass-based 

diesel are specific types of advanced biofuel, which in turn is a 

specific type of renewable fuel. See Ams. for Clean Energy v. 

EPA, 864 F.3d 691, 697–98 (D.C. Cir. 2017) (ACE). For 

renewable fuel, advanced biofuel, and cellulosic biofuel, 

Congress set increasing annual minimum volumes in statutory 

tables running through 2022. 42 U.S.C. § 7545(o)(2)(B)(i)(I)–

1

 Like my colleagues, I would deny the petitions for review 

filed by the biofuel producers, who seek to make the volume 

requirements even higher. I further agree with my colleagues that, if 

the volume requirements are valid, EPA did not independently err in 

setting compliance standards based on those requirements.
4

(III). For later years, EPA itself must set annual minimum 

volumes based on six considerations. Id. § 7545(o)(2)(B)(ii). 

To ensure that these minimum volumes are in fact sold, EPA 

also must convert the volumes into percentage requirements 

imposed on obligated parties such as refiners and importers of 

transportation fuel. Id. § 7545(o)(3). Furthermore, EPA must 

administer a program for suppliers of renewable fuel to obtain 

tradeable credits valid for one year after they are generated. Id.

§ 7545(o)(5).

The statutory minimum volumes “provide only starting 

points.” Am. Fuel & Petrochemical Mfrs. v. EPA, 937 F.3d 

559, 569 (D.C. Cir. 2019) (AFPM). Several waiver provisions 

allow—and at times require—EPA to reduce the statutory 

minima. A general waiver provision permits the agency to 

reduce any minimum volume that would “severely harm the 

economy or environment” or that has proven infeasible because 

of an “inadequate domestic supply” of the relevant fuel. 42 

U.S.C. § 7545(o)(7)(A). There is also a separate waiver 

provision keyed to shortages of cellulosic biofuel: In any year 

“for which the projected volume of cellulosic biofuel 

production” is less than the statutory minimum, EPA must

reduce the statutory minimum to the projected available 

volume, and it may reduce the statutory minima for the broader 

categories of advanced biofuel and renewable fuel by up to the 

same amounts. Id. § 7545(o)(7)(D)(i).

A further provision, titled “Modification of applicable 

volumes” and known as the reset authority, kicks in if EPA has 

made large enough waivers in prior years. 42 U.S.C. 

§ 7545(o)(7)(F). It applies to any statutory volume table for 

which the agency has waived either (i) at least 20 percent of 

statutory minima for two consecutive years or (ii) at least 50 

percent of a statutory minimum for one year. Id. This reset 

authority requires EPA, within one year of issuing the 
5

triggering waiver, to modify all minimum volumes for later 

years covered by the statutory table. Id. EPA could not 

exercise its reset authority until 2016, but waivers before 2016 

could (and did) trigger a requirement for EPA to exercise its 

authority for years after 2016. Id.

In exercising its reset authority, EPA must use the same 

“processes, criteria, and standards” that it uses to set volume 

requirements for years not covered by the tables. 42 U.S.C. 

§ 7545(o)(7)(F). Those criteria require EPA to set annual 

minimum volumes based on past implementation and six 

enumerated factors:

(I) the impact of the production and use of 

renewable fuels on the environment, including 

on air quality, climate change, conversion of 

wetlands, ecosystems, wildlife habitat, water 

quality, and water supply; 

(II) the impact of renewable fuels on the energy 

security of the United States;

(III) the expected annual rate of future commercial 

production of renewable fuels ... ;

(IV) the impact of renewable fuels on the 

infrastructure of the United States ... ;

(V) the impact of the use of renewable fuels on the 

cost to consumers of transportation fuel and on 

the cost to transport goods; and

(VI) the impact of the use of renewable fuels on 

other factors, including job creation, the price 

and supply of agricultural commodities, rural 

economic development, and food prices. 
6

Id. § 7545(o)(2)(B)(ii). Boiled down, paragraph (2)(B)(ii) 

requires EPA to set minimum volumes based on its analysis of 

(1) environmental impacts including climate change, (2) 

energy security, (3) production of renewable fuels, (4) 

infrastructure, (5) cost, and (6) other factors.

The waiver provisions have proven essential to the RFS 

program, for “[t]he statute was a bit optimistic, to put it 

generously.” ACE, 864 F.3d at 726. Most notably, cellulosic 

biofuel has not been produced at even a fraction of what was 

expected. See id. And because cellulosic biofuel is a specific 

kind of advanced biofuel and renewable fuel, its failed 

development has dragged down those categories as well. See 

AFPM, 937 F.3d at 572. For years, EPA has addressed these 

shortfalls through the waiver provision for cellulosic biofuel, 

making significant reductions to the minimum volumes for 

cellulosic biofuel, advanced biofuel, and renewable fuel. 

These reductions have triggered EPA’s reset authority for all 

three of the fuel categories, in 2010, 2015, and 2019 

respectively. See Final Rule, 87 Fed. Reg. at 39,607. Yet until 

this rulemaking, EPA had never exercised its reset authority.

II

The Final Rule sets minimum volumes for 2020, 2021, and 

2022; sets a second, supplemental volume for 2022; and 

calculates the applicable percentage requirements. See 87 Fed. 

Reg. at 39,610–35. As has been the case throughout the RFS 

program, the volume requirements were substantially lower 

than the statutory targets. Yet the 2022 volume requirements 

also were “significantly higher” than the those established by 

EPA for preceding years. Id. at 39,603; see also id. at 39,631
7

(table of volumes). A group of refiners challenge the 2022 

volumes as unlawfully high.2

To justify setting volumes below the statutory baselines, 

EPA invoked both the reset provision and the waiver provision 

for cellulosic biofuel. Final Rule, 87 Fed. Reg. at 39,608. In 

explaining the volumes selected, EPA framed its analysis 

around “the statutory factors that the reset authority requires us 

to consider.” Id. Yet it reduced the 2022 volumes to the exact 

levels that the cellulosic-waiver provision by itself would have 

required (for cellulosic biofuel) or permitted (for advanced 

biofuel and total renewable fuel). See id. at 39,623. EPA 

sought to explain these volumes in a regulatory preamble and 

in a separate regulatory impact analysis.

A

The preamble contains only a cursory discussion of how

EPA balanced the statutory factors to set the 2022 volumes. 

For cellulosic biofuel, EPA recognized that the cellulosicwaiver provision required the agency to reduce the volume to 

the amount projected to be available. Final Rule, 87 Fed. Reg. 

at 39,623. EPA also recognized that the reset authority 

required it to consider further reductions. Id. Here is EPA’s 

explanation for making no such reductions:

EPA’s approach to the cellulosic biofuel volume for 

2022 seeks to realize the potential for GHG benefits 

associated with increased cellulosic biofuel 

production despite the relatively high costs of liquid 

cellulosic biofuels, and, in the case of [cellulosic 

fuels] derived from biogas, the impact on the price of 

transportation fuel. Because cellulosic biofuels 

2

 Because the refiners do not challenge the 2020 or 2021 

volumes, I do not consider whether they too are unlawfully high.
8

through 2022 are projected to be produced from 

wastes or residues, their production is not expected to 

have significant adverse impacts on several of the 

statutory factors such as the price and supply of 

agricultural commodities, water quality and supply, 

and the conversion of wetlands, ecosystems, and 

wildlife habitat. Thus, while some of the statutory 

factors (such as the cost to consumers of 

transportation fuel and the cost to transport goods) 

may suggest that a volume of cellulosic biofuel lower 

than the volume projected to be produced in 2022 

would be appropriate, we have determined that these 

factors are outweighed by other factors (such as 

climate change).

Id.

The preamble has a similarly terse justification for why

EPA, in exercising its reset authority, made no further 

reduction to the 2022 volumes for advanced biofuel and total 

renewable fuel beyond what the cellulosic waiver allowed. 

Here is EPA’s analysis of the governing statutory factors:

The advanced biofuel and total renewable fuel 

volumes strike a balance between numerous 

competing statutory factors. They reflect the potential 

for growth in the volume of renewable fuel produced 

and consumed in the U.S., and the potential energy 

security and climate change benefits that producing 

and consuming increasing volumes of qualifying 

renewable fuels provide. They also take into 

consideration the potential negative impacts of 

renewable fuels produced from crops such as corn or 

soybeans on environmental factors such as the 
9

conversion of wetlands, ecosystems, and wildlife 

habitat, water quality, and water supply.

Final Rule, 87 Fed. Reg. at 39,623–24. EPA also expressed a 

desire to maintain “statutorily implied” volumes. Id. at 39,624. 

An implied volume is the difference between expressly 

required volumes for nested categories. For example, the 

implied volume for conventional renewable fuel is the required 

volume for all renewable fuel minus the required volume for 

advanced biofuel. Likewise, the implied volume for noncellulosic advanced biofuel is the required volume for all 

advanced biofuel minus the required volume for cellulosic 

biofuel. EPA reasoned that maintaining these implied volumes 

would be “inherently consistent” with the statutory scheme. Id.

The preamble then sets forth “quantitative impacts” of the 

volume requirements. EPA found two such impacts: On the 

cost side of the ledger, the 2022 standards (including the 

supplement) would raise annual fuel costs to consumers by 

$5.72 billion relative to the 2020 standards. Final Rule, 87 Fed. 

Reg. at 39,626. On the benefit side, the 2022 standards would 

increase annual energy security by $160 million relative to the 

same baseline. RIA at 155.

3 As for climate benefits, EPA 

noted the “uncertainty related to the GHG emission impacts of 

this rule,” and it therefore expressly declined to make any 

“quantified projection” of that variable. Id. at 39,626 n.139.

Finally, the preamble explained EPA’s decision to impose 

a “supplemental” volume for 2022 to offset an unlawful

reduction that EPA had made to an annual volume for 2016. In

3

 The preamble reports increased energy security for 2022 to be 

$227 million. Final Rule, 87 Fed. Reg. at 39,626. That figure 

appears to misstate the RIA, which calculated $227 million in energy

security benefits from the 2021 and 2022 standards combined. RIA 

at 155. This discrepancy is immaterial to the analysis that follows.
10

ACE, this Court set aside EPA’s use of the general waiver 

provision to reduce the 2016 requirement for total renewable 

fuel by 500 million gallons. See 864 F.3d at 702, 713. We held 

that EPA had impermissibly used that provision, which 

requires an inadequate domestic supply of the relevant fuel, to 

address demand-side constraints. Id. at 707. We vacated the 

waiver and “remand[ed] the rule to EPA for further 

consideration.” Id. at 737.

In this rulemaking, EPA responded to ACE by (1) tacking 

on an extra 250 million gallons of renewable fuel to the volume

requirement for 2022 and (2) promising to tack on the same 

amount to the volume requirement for 2023. Final Rule, 87 

Fed. Reg. at 39,628. EPA rejected implementing ACE by 

reassessing compliance for 2016 or by reducing the outstanding 

2016 volume through a retroactive exercise of the cellulosicwaiver provision. J.A. 528–30. Instead, EPA imposed what it 

described as a “supplemental standard” functioning “like a 

2022 standard in all respects.” Final Rule, 87 Fed. Reg. at 

39,628. Yet in doing so, EPA excluded the supplement from 

its assessment of what volume of renewable fuel for 2022 

would best comport with the paragraph (2)(B)(ii) factors. 

Compare id. at 39,623–25 (assessing factors) with id. at 

39,627–31 (explaining supplement).

B

EPA supplemented the preamble with a regulatory impact 

analysis examining the factors governing its exercise of the 

reset authority. The RIA began by identifying 28 possible 

effects, organized around the six paragraph 2(B)(ii) factors. 

RIA at v. Almost all of these were costs as opposed to benefits, 

including increased annual fuel costs of $5.72 billion for 2022. 

Id. at v, 293–94. Other potential costs included harms to air 

quality from biofuel production, harms to wetlands and other 
11

ecosystems from land-use change, harms to soil and water 

quality from feedstock production, aquifer depletion, “[u]se of 

limited water resources for irrigation instead of meeting human 

needs,” higher corn and soybean prices, and higher food prices

more generally. Id. at v. EPA quantified only one benefit:

increased annual energy security of $160 million. Id. at v, 155. 

And it identified only four other potential benefits: reduced 

greenhouse-gas emissions, increased employment, increased 

economic development in rural areas, and increased supply of 

certain agricultural commodities. Id. at v.

For greenhouse-gas emissions, EPA did not commit to a 

quantified impact. In 2010, it had estimated the GHG 

emissions of different kinds of biofuel to determine which ones 

met the statutory definitions for each type of renewable fuel.

RIA at 66. Later, it made some partial updates. See id. at 66 

& nn. 130–34. But EPA did not rely on these figures to assess

the effect of the volume requirements on GHG emissions. 

Instead, EPA repeatedly stressed that there was “considerable 

uncertainty regarding the GHG emission impacts of renewable 

fuel use,” id. at 67, and it invoked that uncertainty as a reason 

for “not presenting modeled estimates of the GHG impacts of 

the combined volumes in this final rule,” id. 70–71. EPA did 

say that its 2010 estimates remained “within ranges found in 

more recent studies,” but it also noted that the studies reflect 

divergent views on the “lifecycle GHG emissions” of

renewable fuels. Id. at 67 & n.139. The most recent study cited

by EPA looked at the impact of the RFS program itself on GHG 

emissions. This study concluded that the emissions from landuse changes to implement the program were “enough to fully 

negate or even reverse any GHG advantages of the fuel relative 

to gasoline”—largely due to a net increase in lifecycle GHG 

emissions from corn-based ethanol. Lark et al., Environmental 

Outcomes of the US Renewable Fuel Standard, 119 

Proceedings of the Nat’l Academy of Sciences No. 9, 
12

e210184119 at 2 (Feb. 14, 2022). In the end, the most EPA was 

willing to say was that the volume requirements “may affect 

climate change by altering the amount” of GHG emissions. 

RIA at 65 (emphasis added).

EPA did provide an “illustrative analysis of GHG 

emissions.” RIA 71. It estimated changed emissions 

attributable to the volume requirements over the next three 

decades. Id. at 78–80. Using three possible discount rates, 

EPA then estimated the social cost of carbon—measured in 

dollars per unit of carbon—over the same three decades. Id. at 

86. Finally, it multiplied those figures to estimate the dollar 

values of the reduced carbon emissions over the same period. 

Id. at 92–94. But despite the complexity of this analysis, EPA 

expressly disavowed it. In the first paragraph of a 25-page 

discussion, the agency stated: “This illustrative scenario is not

EPA’s assessment of the likely greenhouse gas impacts of this 

rulemaking.” Id. at 71.

III

A

The Clean Air Act requires us to reverse rules that are 

“arbitrary, capricious, an abuse of discretion, or otherwise not 

in accordance with law.” 42 U.S.C. § 7607(d)(9)(A). This 

language parrots the Administrative Procedure Act. See 5 

U.S.C. § 706(2)(A). We therefore must consider whether EPA 

has given a “satisfactory explanation for its action.” Motor 

Vehicle Mfrs. Ass’n v. State Farm Mut. Auto. Ins. Co., 463 U.S. 

29, 43 (1983) (cleaned up). Likewise, we must consider 

whether its decision “was based on a consideration of the 

relevant factors and whether there has been a clear error of 

judgment.” Id. (cleaned up). And we must set aside the 

decision if the agency “entirely failed to consider an important 

aspect of the problem” or “offered an explanation for its 
13

decision that runs counter to the evidence” before it. Id. Justice 

Kavanaugh has distilled these familiar principles into one 

overarching insight: Agency action must be “reasonable and 

reasonably explained.” FCC v. Prometheus Radio Project, 141

S. Ct. 1150, 1158 (2021); see also ACE, 864 F.3d at 726.

B

The reset authority required EPA to consider six general 

factors in setting the minimum volumes for 2022. 42 U.S.C. 

§ 7545(o)(2)(B)(ii), (o)(7)(F). EPA identified some 28 

considerations bearing on these factors. RIA at v. It quantified 

two of them: According to EPA, the 2022 standards would 

increase annual fuel costs to consumers by $5.72 billion and 

would increase the Nation’s annual energy security by only 

about $160 million. Final Rule, 87 Fed. Reg. at 39,626; RIA 

at 155, 294. In other words, the costs of the standards exceed 

their benefits by more than 35 times, and their net annual cost 

is over $5.5 billion—yes, with a b. Costs of this magnitude are

an “important aspect of the problem” for EPA to consider, State 

Farm, 463 U.S. at 43, particularly because paragraph (2)(B)(ii) 

expressly requires it to analyze “cost to consumers of 

transportation fuel,” 42 U.S.C. § 7545(o)(2)(B)(ii)(V). In

setting aside another EPA rule promulgated with scant 

consideration of a ten-digit price tag, the Supreme Court 

explained: “Agencies have long treated cost as a centrally 

relevant factor when deciding whether to regulate. 

Consideration of cost reflects the understanding that reasonable 

regulation ordinarily requires paying attention to the 

advantages and the disadvantages of agency decisions.” 

Michigan v. EPA, 576 U.S. 743, 752–53 (2015). The dissenters 

fully agreed. See id. at 769 (Kagan, J., dissenting) (“Cost is 

almost always a relevant—and usually, a highly important—

factor in regulation. Unless Congress provides otherwise, ... 
14

an agency must take costs into account in some manner before 

imposing significant regulatory burdens.”).

By this metric, EPA’s justification of the 2022 volumes 

does not fare well. Start with its explanation for setting the 

cellulosic-biofuel volume at the full amount expected to be 

produced. EPA acknowledged that cost considerations cut in 

favor of a lower volume. Final Rule, 87 Fed. Reg. at 39,623; 

see also id. at 39,611 (“the cost of producing liquid cellulosic 

biofuel is high”). EPA then explained that because cellulosic 

biofuel is produced from waste rather than crops, various 

environmental harms from the production of crop-based

renewable fuels (“such as the price and supply of agricultural 

commodities, water quality and supply, and the conversion of 

wetlands, ecosystems, and wildlife habitat”) would not raise 

the price tag even more. Id. at 39,623. But what benefits cut 

in the other direction? Without elaboration, EPA named “other 

factors (such as climate change)” and noted a “potential for 

GHG benefits.” Id. Yet as explained above, EPA declined to 

commit itself to any estimate of the reduced emissions 

attributable to the 2022 volumes, much less to any estimate 

monetizing those benefits. And assertions so “conclusory,” 

regarding issues so critically important, do not count as a 

reasonable explanation. Am. Clean Power Ass’n v. FERC, 54 

F.4th 722, 727 (D.C. Cir. 2022). 

Next consider EPA’s explanation for the advanced and

renewable fuel volumes. EPA began with a truism—the 

volumes “strike a balance” (as any volumes would) among 

“competing statutory factors.” Final Rule, 87 Fed. Reg. at 

39,623. But in discussing these factors, EPA failed to mention 

increased fuel costs at all, much less acknowledge that it had 

estimated them to be several billion dollars annually. See id. at 

39,623–24. Instead, the agency ticked off two potential 

benefits from the higher volumes—“energy security” (without 
15

mentioning that it had estimated this benefit to be a paltry $160 

million annually) and “climate change benefits” (without 

mentioning that it had declined to estimate reduced emissions 

or to monetize those benefits). See id. at 39,623. The only 

other considerations mentioned fell on the costs side of the 

ledger—the various environmental harms from crop-based 

renewable fuels “such as the conversion of wetlands, 

ecosystems, and wildlife habitat, water quality, and water 

supply.” Id. at 39,624. Far from decreasing the $5.5 billion 

annual deficit of costs over benefits, those additional costs

would have made it even higher.

Rather than engage with the paragraph (2)(B)(ii) factors, 

EPA asserted a different rationale for reducing the advanced 

and renewable volumes only as permitted by the cellulosicwaiver provision. The agency reasoned that maintaining 

“statutorily implied” volumes—of non-advanced renewable 

fuel and of non-cellulosic advanced biofuel—would be more 

“inherently consistent” with the statute. Final Rule, 87 Fed. 

Reg. at 39,624. But that reasoning is itself inconsistent with 

the statute. When there is a shortfall in production of cellulosic 

biofuel, the waiver provision requires EPA to reduce the 

cellulosic-biofuel volume to account for the shortfall and then 

permits the agency to reduce volumes for the broader 

categories of advanced biofuel and renewable fuel by no more 

than the same amount. 42 U.S.C. § 7545(o)(7)(D). But the 

cellulosic-waiver provision and the reset authority are 

different. The latter requires EPA, when statutory volume 

targets are missed by a sufficiently large amount, to consider 

broader changes based on its own assessment of the paragraph 

(2)(B)(ii) factors. Id. § 7545(o)(7)(F). And here, the reset 

provision was triggered many times over: EPA reduced the 

cellulosic-biofuel volume by 93.5 percent in 2010, and it has 

reduced that annual volume by similarly large percentages ever 

since. See Final Rule, 87 Fed. Reg. at 39,607 & n.30. 
16

Likewise, the relevant waivers for advanced biofuel and 

renewable fuel easily exceeded the statutory trigger for the 

reset provision. See id. at 39,607. Because these wholesale 

reductions triggered the reset authority as to all three kinds of 

renewable fuel, EPA was required to come up with new 

volumes by reasonably balancing the paragraph (2)(B)(ii) 

factors, including increased fuel costs. It could not simply 

collapse that inquiry into the much narrower one governing the 

cellulosic-waiver provision.

EPA’s reasoning as to implied volumes also fails for a 

different reason—it assumes that the only ongoing concern has 

been the chronic unavailability of cellulosic biofuel. EPA’s 

own analysis indicates otherwise. According to EPA, use of 

conventional renewable fuel, which is overwhelmingly cornbased ethanol, has “virtually stagnated as the market reached 

the E10 blendwall.” Final Rule, 87 Fed. Reg. at 39,612. This

happened because almost all gasoline sold in the United States 

now contains at least ten percent ethanol (i.e., is E10). RIA at 

30. And most vehicle engines in the United States “were not 

designed to handle gasoline consisting of more than 10 percent 

ethanol.” Monroe Energy, LLC v. EPA, 750 F.3d 909, 914 

(D.C. Cir. 2014). So as the implied volume for conventional

renewable fuel rose above the blendwall, and as cellulosic

biofuel continued to be unavailable, the practical effect was to 

require obligated parties to replace diesel fuel with advanced 

biofuels at levels well above the volume requirements for that

category. Final Rule, 87 Fed. Reg. at 39,612, 39,624. Because 

advanced biofuels are more expensive than corn-based ethanol, 

this dynamic drove the projected $5.72 billion increase in fuel 

costs—primarily through an 8.62 cent-per-gallon increase in 

the cost of diesel. RIA at 287–294. Yet despite laying all of 

this out, the agency did not consider any cost issues, much less 

these interrelated cost issues spanning all three nested 

categories, in setting the advanced and renewable fuel volumes.
17

On the benefits side of the analysis, it is of course true that 

qualitative benefits are sometimes as important as, or even 

more important than, quantified costs or benefits. See Mozilla 

Corp. v. FCC, 940 F.3d 1, 70–71 (D.C. Cir. 2019). But the 

larger the quantified net costs, the more significant and certain 

the qualitative benefits must be to tip the scales in the other 

direction. Here, EPA remained agnostic on the extent of any 

climate benefits from reduced GHG emissions. Because of 

what it viewed as “the uncertainty related to GHG emission 

impacts of th[e] rule,” EPA declined to make any “quantified 

projection of the GHG emission impacts of the rule.” Final 

Rule, 87 Fed. Reg. at 39,926 n.139. Moreover, it repeatedly 

stressed its view that there was “considerable uncertainty” 

about how the volume requirements would impact GHG 

emissions. RIA at 67, 71. EPA even cited a study arguing that 

the shift to some renewable fuels has led to a net increase in 

GHG emissions. Id. at 68 n.139 (Lark). So EPA’s own expert 

judgment was that the impact of renewable fuels on GHG 

emissions is deeply uncertain. And all this uncertainty related 

to the amount of reduced GHG emissions—before even 

beginning to estimate the dollar value of those reduced 

volumes. In sum, it is unreasonable to impose many billions of 

dollars of annual costs when any offsetting benefit is—by 

EPA’s own expert judgment—so uncertain.

What to make of EPA’s “illustrative” analysis of GHG 

emissions? The short answer is that EPA firmly disavowed it: 

“This illustrative scenario is not EPA’s assessment of the likely 

greenhouse gas impacts of this rulemaking.” RIA at 71

(emphasis added). A longer answer, buried in the fine print, is 

that EPA had many good reasons for caution. First, the RIA

explains that measuring the various “GHG emissions 

associated with an increase in biofuel use” is a source of 

“uncertainty,” and “[e]stimating indirect categories of 

emissions—such as land-use change—is particularly 
18

challenging.” Id. at 68–69. Second, the illustration was based 

on dated studies that may have underestimated GHG emissions 

from such land-use change. See id. at 65–67. Third, the 

illustration assumes that renewable fuels will fully displace 

corresponding categories of fossil fuels. Id. at 72. Yet EPA

noted reasons to think that increased use of renewable fuels in 

the United States will cause an increase in fossil-fuel 

consumption abroad. Id. at 72 n.153. Fourth, the illustration

assumes that 30 years “is an appropriate timeframe for 

evaluating the lifecycle GHG emissions of renewable fuels.” 

Id. at 70. But while EPA endorses this timeframe to determine

which fuels satisfy the statutory definitions, it expressed only 

agnosticism on whether 30 years is anything close to 

appropriate for present purposes. See id. (“the application of a 

30-year time period may or may not be the most appropriate 

analytical time period over which to evaluate the impact of a 

rule that covers only three years of volume requirements”). 

And for dominant, plant-based renewable fuels such as cornbased ethanol and soybean-based diesel, the illustration itself 

projects that the renewables do not so much as break even on 

GHG emissions until about seven to eleven years after the 

initial land-use changes. Id. at 79. Fifth, the illustration

explains that attempts to monetize GHG emissions depend 

heavily on selecting an appropriate discount rate, which has 

been a source of substantial and ongoing disagreement. See id.

at 81–85. For instance, the three discount rates used in the 

illustration for the 2022 standards, ranging from 2.5 to 5 

percent, yield present values ranging from $1.9 billion to $13 

billion in climate benefits. Id. at 93. Sixth, the illustration

projects benefits attributable to the new standards over the 

course of three decades, id., whereas the increased fuel costs 

calculated by EPA are for one year only, id. at 282–95. So, the 

illustration indicates that the climate benefit of the 2022 

standards over three decades ($8.40 billion, using the 

intermediate three percent discount rate) only modestly
19

exceeds the $5.72 billion cost for 2022 alone. This would be a 

much closer case if EPA had endorsed the illustration and then 

given some account of why avoiding worst-case, decades-long

scenarios on climate change justifies ten-digit annual costs. 

But here, EPA affirmatively disclaimed what seems to be a 

highly contestable illustration, leaving no reasonable account 

of why inflicting such costs was warranted.

Finally, EPA cited no other benefits that could reasonably 

support the 2022 volume requirements. Of the 28 

considerations around which the RIA was organized, only five 

involved potential benefits. I have already addressed the two 

principal ones—increased energy security and possibly lower

GHG emissions. The other three are increased employment, 

rural economic development, and increased supply of 

agricultural commodities. RIA at v. But EPA acknowledged 

that any increased employment for biofuel production and 

agriculture may be offset by decreased employment in other 

sectors, and it did not “estimate the net employment effects.” 

Id. at 223. For ethanol, EPA predicted only “economic 

restoration” from a return to pre-pandemic levels of 

consumption. Id. at 229. For cellulosic biofuel, it predicted 

increased economic activity of only $76 million in 2022. Id. 

And EPA was unable to estimate the “potential impact” of 

increased agricultural commodities. Id. It did suggest that the 

RFS program likely caused an increase in soybean oil 

production, but it concluded that “the primary driver for growth 

over the past 15 years in soybean production and planted acres 

has clearly been rising exports.” Id. at 231–32. The small 

magnitude of these various secondary effects is not surprising, 

for the Clean Air Act is not primarily a jobs bill or a farm bill. 

These considerations do not substantially mitigate the multibillion-dollar annual deficit of costs over benefits, and EPA 

could not reasonably conclude otherwise.
20

In defense of the 2022 volumes, my colleagues attribute to 

Congress “a policy choice to accept higher fuel prices in order 

to reap the benefits” of greater energy independence and 

reduced GHG emissions. Ante at 28. But the RFS statute is 

more nuanced than that. As explained above, it contains waiver 

provisions to account for economic and feasibility constraints 

in any given year. And paragraph (2)(B)(ii), which governs the 

reset question at issue here as well as volumes for all years after 

2022, does not simply instruct EPA to prioritize energy security 

and reduced emissions above all else. To the contrary, it

requires EPA to consider both those potential benefits and 

various costs, specifically including increased fuel costs to 

consumers. The RFS statute is thus quite unlike statutes 

requiring protection no matter the cost. See, e.g., TVA v. Hill, 

437 U.S. 153, 172–73 (1978). And it is much like the Clean 

Air Act provision at issue in Michigan v. EPA—except that 

here, the requirement to consider costs is express rather than 

implied. To render a non-arbitrary decision, EPA thus had to 

reasonably explain why benefits so uncertain outweigh costs so 

substantial, not merely to assert that conclusion.

IV

The supplemental volume suffers from a further defect—

it is not authorized by statute. As explained above, EPA must 

consider the paragraph (2)(B)(ii) factors in exercising its reset 

authority. EPA applied those factors to set a 2022 requirement 

of 20.63 billion gallons of total renewable fuel. Final Rule, 87 

Fed. Reg. at 39,601–03. EPA recognized that this amount was 

aggressive: The agency described it as “significantly higher” 

than the 202l requirement of 18.84 billion gallons, id. at 

39,603; as “market-forcing,” id. at 39,628; and as reflecting an 

“implied conventional renewable fuel volume” that exceeded 

the amount of conventional renewable fuel expected to be 

consumed, id. at 39,624. But despite pushing the outer limits
21

in setting this base volume requirement for 2022, EPA then 

tacked on a “supplemental” requirement, not because the 

paragraph (2)(B)(ii) factors supported it, but to “restore” half 

of the volumes that EPA had impermissibly waived in 2016. 

See id. at 39,629.

In support of its claimed authority to shift 2016 volume 

requirements to 2022, EPA invokes paragraph (3) of the RFS 

statute, which requires the agency to promulgate applicable 

percentages that “ensure[]” the volume requirements are met. 

87 Fed. Reg. at 39,629–30; see 42 U.S.C. § 7545(o)(3)(B)(i).

EPA overlooks a critical feature of this duty—it is specific to 

individual calendar years. Paragraph (3) provides that, by 

November 30 of each “calendar year[]” between 2005 and 

2021, EPA must “determine and publish in the Federal 

Register, with respect to the following calendar year, the 

renewable fuel obligation that ensures that the [volume] 

requirements of paragraph (2) are met.” 42 U.S.C. 

§ 7545(o)(3)(B)(i) (emphasis added). So, EPA had one duty to 

ensure that 2016 volume requirements were met by 2016 

obligated parties in 2016 and another duty to ensure that 2022 

volume requirements were met by 2022 obligated parties in 

2022. Under this scheme, EPA could not shift statutory 

volumes from one year to another.

Broader statutory structure confirms this point. Paragraph 

(2) prospectively establishes varying applicable volumes for 

each calendar year between 2006 and 2022. 42 U.S.C. 

§ 7545(o)(2)(B)(i). It then requires EPA to establish applicable 

volumes “for calendar years after the calendar years specified 

in the tables” and to do so fourteen months in advance. Id.

§ 7545(o)(2)(B)(ii). Paragraph (7) establishes waiver and reset 

authorities that operate yearly on these applicable volumes. Id.

§ 7545(o)(7)(A), (D), (E), (F). As noted above, paragraph (3) 

requires EPA to establish applicable percentages prospectively, 
22

“with respect to the following calendar year.” Id.

§ 7545(o)(3)(B)(i). And paragraph (5) requires EPA to 

establish a program of tradeable credits “valid to show 

compliance” for one year from the date of generation. Id.

§ 7545(o)(5)(A), (C). So compliance—like the underlying 

volume and percentage requirements—operates on a yearly 

basis. And the annual waivers and credits ensure that obligated 

parties are never stretched beyond reason. Allowing EPA to 

shift volume requirements from one calendar year to another—

to foreclose otherwise available waivers or the use of otherwise 

available credits—would upend this balanced scheme.

EPA also relies on decisions upholding the promulgation 

of untimely and even retroactive volume requirements, so long 

as the agency “reasonably considers and mitigates any hardship 

caused to obligated parties by reason of the lateness.” ACE, 

864 F.3d at 718; see also Monroe Energy, 750 F.3d at 919–21; 

Nat’l Petrochemical & Refiners Ass’n v. EPA, 630 F.3d 145, 

153–64 (D.C. Cir. 2010). But in these cases, the late or 

retroactive standards operated on the calendar year at issue, 

together with the waiver authorities, compliance obligations, 

and tradeable credits for the same year. For example, in 

National Petrochemical, this Court upheld “combined volume 

requirements” for 2009 and 2010 that were imposed in a single, 

partially retroactive rule promulgated in February 2010. See 

630 F.3d at 151. Critically, the 2009 component of this 

requirement retained the compliance flexibilities of normal 

2009 standards, as refiners and importers could satisfy their 

obligations with credits generated in 2008 or 2009. See id. 

Indeed, as my colleagues note, the combined standard gave 

obligated parties even more flexibility than would otherwise be 

the case, to the extent that EPA allowed obligated parties to use 

2011 credits to satisfy 2009 obligations. Ante at 36–37. 

Neither National Petrochemical nor its progeny involved the 

promulgation of supplemental volumes for a later compliance 
23

year to make up for EPA’s failure to promulgate volumes in an 

earlier one. And none of those cases involved the elimination 

of waivers and tradeable credits otherwise available in the year 

from which the volumes were shifted away. These cases do

not support EPA’s volume-shifting gambit.

EPA further reasons that it had to respond to ACE 

somehow, and reopening compliance for 2016 would have 

been impractical. Final Rule, 87 Fed. Reg. at 39,628. But if 

that were true, then EPA may have simply been unable to cure 

its 2016 mistake some six years later—a possibility the agency 

itself acknowledged in its notice of proposed rulemaking, see 

id. at 39,630. In ACE, we remanded “the rule”—i.e., the rule 

through which EPA had established applicable volumes and 

percentages for 2016—for further consideration in light of our 

holding that the agency had unlawfully invoked the general 

waiver provision to lower the 2016 volumes. See 864 F.3d at 

737. We did not, and could not, require EPA to act contrary to 

the statute, including by shifting the disputed volume six and 

seven years into the future.

Finally, the supplemental volume would be arbitrary even 

if EPA did have statutory authority to shift volumes from one 

year to another. The Final Rule was promulgated on July 1, 

2022—years after EPA’s statutory deadlines for exercising the 

reset authority based on triggering waivers in 2010, 2015, and 

2019, see 42 U.S.C. § 7545(o)(7)(F); Final Rule, 87 Fed. Reg. 

at 39,607, and eight months after its deadlines for exercising 

the cellulosic waiver and setting the applicable percentages for 

2022, see 42 U.S.C. § 7545(o)(3)(B)(i), (7)(D)(i). EPA also 

noted that it imposed the supplemental volume “significantly 

after” the November 2015 deadline for setting applicable 

volumes and percentages for 2016, see Final Rule, 87 Fed. Reg. 

at 39,630, though the significance of that observation is unclear 

if we credit EPA’s assertion that it is “treating the supplemental 
24

standard like a 2022 standard in all respects,” rather than “as a 

supplement to standards for 2016,” see id. at 39,628. Whatever 

the relevant deadline, EPA missed it, triggering what the 

agency acknowledged was an obligation to “mitigate hardship” 

caused by “late issuance of this standard.” Id.at 39,630.

EPA did far less than it reasonably could have to mitigate 

the hardship. Among other things, it could have eliminated 

most of the outstanding 2016 volume through a retroactive 

application of the cellulosic-waiver provision. For 2016 

volumes, EPA had invoked that provision to reduce the 

cellulosic-biofuel volume by 4.02 billion gallons, which gave 

it discretion to reduce the total renewable fuel volume by the 

same amount. But EPA reduced the latter volume by only 3.64 

billion gallons—some 380 million fewer gallons than it could 

have. J.A. 737 & n.102. And ACE itself, despite holding that 

EPA could not invoke the general-waiver provision to reduce 

volumes based on “demand-side constraints,” further held that 

EPA could invoke the discretionary component of the 

cellulosic-biofuel waiver to address that very consideration. 

864 F.3d at 732–33. So, as to 380 million of the presently 

disputed 500 million gallons, EPA in 2016 simply invoked the 

wrong waiver provision.

EPA gave two reasons for not retroactively applying the 

cellulosic waiver to reduce the outstanding 2016 volume by 

380 million gallons. First, it found that the supplemental 

standard was “achievable” in 2022. 87 Fed. Reg. at 39,630–

31. But the relevant question is not one of feasibility; rather, it 

is whether EPA reasonably “mitigate[d] any hardship caused 

to obligated parties by reason of its lateness.” ACE, 864 F.3d 

at 718–19. Applying a waiver theory that we specifically 

blessed in ACE surely counts as reasonable mitigation. 

Second, EPA thought it inappropriate to consider 2016 market 

conditions in assessing what it called a 2022 volume. J.A. 528.
25

But as shown above, RFS volumes and waivers operate 

together, on a calendar-year basis. And for 2016, EPA’s 

biggest mistake was simply invoking the wrong waiver. In 

sum, even if the supplemental volume for 2022 were authorized 

by statute, it would still be arbitrary.

V

EPA has not reasonably explained any of the challenged 

2022 volume requirements, and the supplemental requirement 

is also contrary to law. I would therefore set them aside. As 

my colleagues conclude otherwise, I respectfully dissent.