United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued September 17, 2010 Decided December 21, 2010

No. 10-1070

NATIONAL PETROCHEMICAL & REFINERS ASSOCIATION,

PETITIONER

v.

ENVIRONMENTAL PROTECTION AGENCY,

RESPONDENT

GROWTH ENERGY AND NATIONAL BIODIESEL BOARD,

INTERVENORS

Consolidated with No. 10-1071

On Petitions for Review of a Final Action

of the Environmental Protection Agency

Robert A. Long Jr. argued the cause for petitioners. With

him on the briefs were Keith A. Noreika, Mark W. Mosier, James

McCall Smith, Chet Thompson, and Daniel Wolff.

Daniel R. Dertke, Attorney, U.S. Department of Justice,

argued the cause for respondent. With him on the brief was

Robert G. Dreher, Acting Assistant Attorney General.
2

Dan Himmelfarb argued the cause for intervenors. On the

brief were Jerome C. Muys, Jr., Laura Ford Brust, Stuart A.C.

Drake, Jeffrey Bossert Clark, John C. O'Quinn, and William H.

Burgess.

Before: GINSBURG, ROGERS and GARLAND, Circuit Judges.

Opinion for the Court by Circuit Judge ROGERS.

ROGERS, Circuit Judge: In 2007, Congress enacted the

Energy Independence and Security Act (“the EISA”), Pub. L.

No. 110–140, §§ 201–204, 121 Stat. 1492 (codified as amended

at 42 U.S.C. § 7545(o) (Supp. II 2008)). It expanded the

renewable fuel program under the Energy Policy Act of 2005,

Pub. L. No. 109–58, § 1501, 119 Stat. 594 (codified as amended

at 42 U.S.C. § 7545(o) (Supp. 2006)) (“2005 Act”), which

required that set volumes of renewable fuel be incorporated into

gasoline sold in the United States each year. The EISA increased

the volume requirements for renewable fuel and added new

volume requirements for advanced biofuels, biomass-based

diesel, and cellulosic biofuel. Congress thus sought “[t]o move

the United States toward greater energy independence and

security, to increase the production of clean renewable fuels, to

protect consumers, to increase the efficiency of products,

buildings, and vehicles, to promote research on and deploy

greenhouse gas capture and storage options, and to improve the

energy performance of the Federal Government.” Pub. L. No.

110–140, 121 Stat. 1492 (2007). EPA posted notice of the final

revisions to the regulations promulgated under the 2005 Act on

its website on February 3, 2010 and published the revised

regulations in the Federal Register on March 26, 2010.

Regulation of Fuels and Fuel Additives: Changes to Renewable

Fuel Standard Program, 75 Fed. Reg. 14,670 (Mar. 26, 2010)

(“Final Rule”). 
3

Petitioners, the National Petrochemical and Refiners

Association and the American Petroleum Institute, challenge the

Final Rule on three grounds. They contend that it violates

statutory requirements setting separate biomass-based diesel

volume requirements for 2009 and 2010; it is impermissibly

retroactive; and it violates statutory lead time and compliance

provisions. For the following reasons, we deny the petitions for

review. 

I.

In 2005 Congress amended section 211 of the Clean Air Act

that authorizes EPA to regulate fuel and fuel additives to

establish a renewable fuel program. See Pub. L. No. 109–58,

§ 1501, 119 Stat. 594 (codified at 42 U.S.C. § 7545(o)). For

each year from 2006 until 2012, Congress specified increasing

minimum volumes of renewable fuel to be used annually. EPA

was directed to promulgate regulations by August 8, 2006 “to

ensure that gasoline sold or introduced into commerce in the

United States . . . , on an annual average basis, contains the

applicable volume of renewable fuel determined in accordance

with subparagraph (B).” Subparagraph (B) listed the applicable 1

volumes of renewable fuel that “shall be determined in

accordance with” a table stating a volume for each calendar

year. The regulations were to include a credit trading program 2

42 U.S.C. § 7545(o)(2)(A)(i) (2005 Act).

1

Under the 2005 Act, subparagraph (B) provided:

2

For the purpose of subparagraph (A), the applicable

volume for any of calendar years 2006 through 2012

shall be determined in accordance with the following

table:

in billions of gallons, 4.0 in 2006; 4.7 in 2007; 5.4 in 2008; 6.1 in
4

under which an obligated party: (1) may generate credits for over

complying with its annual obligation, and can use or trade these

credits for use by another obligated party, allowing an obligated

party to comply in the most cost effective manner, and (2) may

carry over a renewable fuel deficit to the next calendar year.

3

“Regardless of the date of promulgation,” the regulations were 4

to contain provisions to “ensure” the requirements of the

renewable fuel program were met, without restricting geographic

areas in which such fuel may be used or imposing any per-gallon

obligation for use of such fuel. If the August 8, 2006 date was

5

not met, then a default percentage standard for 2006 of 2.78

percent would apply. 

6

2009; 6.8 in 2010; 7.4 in 2011; 7.5 in 2012. 42 U.S.C.

§ 7545(o)(2)(B)(i).

42 U.S.C. § 7545(o)(5)(D) (2005 Act). The deficit

3

carryover provision of the 2005 Act required the regulations to:

allow[] any person that is unable to generate or purchase

sufficient credits to meet the requirements of paragraph (2) to

carry forward a renewable fuel deficit on condition that the

person, in the calendar year following the year in which the

renewable fuel deficit is created –

(i) achieves compliance with the renewable fuel

requirement under paragraph (2); and

(ii) generates or purchases additional renewable fuel

credits to offset the renewable fuel deficit of the

previous year.

Id.

42 U.S.C. § 7545(o)(2)(A)(iii) (2005 Act).

4

42 U.S.C. § 7545(o)(2)(A)(iii)(I) & (II) (2005 Act).

5

42 U.S.C. § 7545(o)(2)(A)(iv) (2005 Act).

6
5

Obligated parties — refiners, importers, and certain blenders

of gasoline — had to show that they had introduced a required

volume of renewable fuel into the domestic gasoline pool each

year. The volume is determined by multiplying an obligated 7

party’s actual annual gasoline production in a given year by a

percentage standard to be calculated and published by EPA by

November 30 prior to each compliance year. The percentage

8

standard is the ratio of the statutory volume of renewable fuel for

the particular year to the amount of gasoline that is projected to

be used in the United States in the same year, subject to certain

adjustments. Ultimately, each obligated party is responsible for 9

ensuring that its share of the overall renewable fuel volume

requirement is blended into the gasoline it sells or introduces into

commerce each year. 

EPA published the implementing regulations in the Federal

Register on May 1, 2007. Regulation of Fuels and Fuel

Additives: Renewable Fuel Standard Program, 72 Fed. Reg.

23,900 (May 1, 2007) (“RFS1”). The regulations applied to

gasoline produced or imported on or after September 1, 2007. 

RFS1, 72 Fed. Reg. at 23,913. As of that date, obligated parties

42 U.S.C. § 7545(o)(3)(B)(ii) (2005 Act).

7

The 2005 Act provided, in pertinent part:

8

Not later than November 30 of each . . . year . . . based on the

estimate provided under subparagraph (A), . . . [EPA] shall

determine and publish in the Federal Register, with respect to

the following calendar year, the renewable fuel obligation that

ensures that the requirements of paragraph (2) are met.

42 U.S.C. § 7545(o)(3)(B)(i).

42 U.S.C. § 7545(o)(3)(B)(ii)(II) & (III) (2005 Act); id.

9

§ 7545(o)(3)(C) (2005 Act).
6

had to be registered and the record-keeping responsibilities

commenced. EPA stated that the renewable fuel program

adopted in the RFS1 rulemaking “will continue to apply after

2012, though some elements may be modified in the rulemaking

setting the standards for 2013 and beyond.” Id. at 23,913. To

facilitate compliance, EPA adopted a system of Renewable

Identification Numbers (“RINs”) for reporting purposes. Id. at

23,908–10. Thus, obligated parties would demonstrate their

compliance with the annual volume standard by acquiring RINs

for each gallon of renewable fuel, which would be assigned to

batches of renewable fuel produced or imported into the United

States, with different fuels carrying different values based on the

energy content relative to ethanol. See id. at 23,909.

When Congress expanded the renewable fuel program in

2007 in the EISA, Pub. L. No. 110–140, §§ 201–204, 121 Stat.

1492, it significantly increased the applicable volumes of

renewable fuel required to be used annually, beginning with

2008 through 2022. In other major changes, it expanded the 10

fuel pool subject to the standards to include diesel and some nonroad fuels. It separated the volumes into four categories 11

(cellulosic biofuel, biomass-based diesel, advanced biofuel, and

total renewable fuel) for purposes of reducing greenhouse gas

emissions and set annual volume requirements for each

Subparagraph (B) under the EISA, which retained the

10

“shall be determined” phrasing in the 2005 Act, supra note 2, listed

the total renewable fuel volume, in billions of gallons, as 9.0 in 2008;

11.1 in 2009; 12.95 in 2010; 13.95 in 2011; 15.2 in 2012; 16.55 in

2013; 18.15 in 2014; 20.5 in 2015; 22.25 in 2016; 24.0 in 2017; 6.0 in

2018; 28.0 in 2019; 30.0 in 2020; 33.0 in 2021; 36.0 in 2022. See 42

U.S.C. § 7545(o)(2)(B)(i)(I).

42 U.S.C. § 7545(o)(2)(A)(i); id. § 7545(o)(1)(L).

11
7

category. It also changed the definition of “renewable fuel” 12

and set the criteria for determining which of the four renewable

fuel categories a given renewable fuel is eligible to meet;

“renewable fuel” was defined to require that such fuel be

produced solely from feedstocks that qualify as “renewable

biomass.” Although the definitions of each of the four 13

categories of fuel overlap to a certain extent (therefore satisfying

one volume requirement also satisfies other volume requirements

in part), refiners, importers and certain blenders of gasoline are

obligated to demonstrate that they have introduced the requisite

volumes of each of the four categories of fuel into transportation

fuel sold annually. The EISA authorized the waiver of the

volume requirements only in limited circumstances. The 14

42 U.S.C. § 7545(o)(2)(B).

12

42 U.S.C. § 7545(o)(1)(J).

13

The waiver provision provided, in pertinent part, that, in

14

general, the EPA Administrator (“EPA”), in consultation with the

Secretaries of the Agriculture and Energy Departments

may waive the requirements of paragraph (2) in whole or in

part . . . by reducing the national quantity of renewable fuel

required under paragraph (2) --

(i) based on a determination by [EPA], after public notice and

opportunity for comment, that implementation of the

requirement would severely harm the economy or

environment of a State, region, or the United States; or

(ii) based on a determination by [EPA], after public notice

and opportunity for comment, that there is an inadequate

domestic supply.

42 U.S.C. § 7545(o)(7)(A). A waiver is good for one year. Id.

§ 7545(o)(7)(C). The waiver provision also provided that the

biomass-based diesel volume requirements may be temporarily
8

revised regulations were to be promulgated in one year, by

December 19, 2008 ; the requirement that the volume standard 15

be published by November 30 of the prior year remained

unchanged.

By Notice of November 21, 2008, EPA published the

renewable fuel standard for 2009. See Renewable Fuel Standard

for 2009, Issued Pursuant to Section 211(o) of the Clean Air Act,

73 Fed. Reg. 70,643, 70,643 (Nov. 21, 2008) (“2008 Notice”). 

Additionally, the Notice stated, because EPA was not going to

meet the December 19, 2008 deadline for promulging the revised

regulations, that “for the 2009 compliance period regulated

parties will continue to be subject to the existing RFS1

regulations at 40 C.F.R. part 80, Subpart K.” Id. EPA would

apply the modified volume requirements under the EISA to

generate the 2009 standard. See id. The Notice also stated,

because “the RFS1 regulatory structure does not provide a

mechanism for implementing the [new] EISA requirement for

use of 0.5 billion gallons of biomass-based diesel,” id., that the

future rulemaking proposal would “propose options,” id. EPA

reduced “if [EPA] determines that there is a significant renewable

feedstock disruption or other market circumstances that would make

the price of biomass-based diesel fuel increase significantly.” Id.

§ 7545(o)(7)(E)(ii). See also id. § 7545(o)(7)(F).

The EISA provided, in pertinent part:

15

Not later than 1 year after December 19, 2007, [EPA] shall

revise the regulations under this paragraph to ensure that

transportation fuel sold or introduced into commerce in the

United States . . ., on an annual average basis, contains at least

the applicable volume of renewal fuel . . . , determined in

accordance with subparagraph (B) . . . .”

42 U.S.C. § 7545(o)(2)(A)(i).
9

advised that “[t]he primary approach for proposal that [it had]

identified to date would be to increase the 2010 biomass-based

diesel requirement by 0.5 billion gallons and allow 2009

biodiesel and renewable diesel RINs to be used to meet this

combined 2009/2010 requirement.” Id. “Such an approach to

biomass-based diesel,” EPA explained, “would provide a similar

incentive for biomass-based diesel use in 2009 as would have

occurred had [EPA] been able to implement the standard for

2009.” Id. “While obligated parties would not need to

demonstrate compliance with the combined 2009/2010 biomassbased diesel standard until the end of the 2010 compliance period

under this approach,” EPA advised that “it would behoove them

to acquire the necessary RINs representing biodiesel and

renewable diesel in 2009 in preparation for their 2010

compliance demonstration.” Id. 

On May 26, 2009, EPA published a notice of proposed

rulemaking incorporating the EISA’s changes to the renewable

fuel program into a modified regulatory scheme (hereinafter

referred to as RFS2). Regulation of Fuels and Fuel Additives:

Changes to Renewable Fuel Standard Program, 74 Fed. Reg.

24,904 (May 26, 2009) (“NPRM”); see id. at 24,957. EPA stated

that the proposed RFS2 program was based on its experience

with the RFS1 program, “utilizing and building on the same

programmatic structure created to implement the current [RFS1]

program.” Id. at 24,909. Thus, while “[t]he proposed

regulations make a number of changes to the current Renewable

Fuel Standard program,” the RFS2 program would “retain[]

many elements of the compliance and trading system already in

place.” Id. at 24,904. EPA proposed combining the 2009 and

2010 biomass-based diesel statutory volume requirements to

create one 2010 standard, and allowing obligated parties to

demonstrate their compliance with the 2010 biomass-based

diesel standard on February 28, 2011, see id. at 24,959. EPA also

indicated that it would retain the RIN system developed in RFS1,
10

as modified to accommodate the additional renewable fuels and

other changes made in the EISA, see id. at 24,910. This

approach, EPA explained, was “in keeping with [its] overall

intent for RFS1 — to design a flexible and enforceable system

that could continue to operate effectively regardless of the level

of renewable fuel use or market conditions in the transportation

fuel sector.” Id. at 24,909.

The NPRM stated that the revised regulations would take

effect January 1, 2010. Id. at 24,913. EPA advised, however,

that it was unable to promulgate the revised regulations by the

statutory date, December 19, 2008. See id. EPA pointed

specifically to delays caused by “the addition of [the greenhouse

gas] complex lifecycle assessments to the determination of

eligibility of renewable fuels [to meet the standards for the four

fuel categories], the extensive analysis of impacts [being]

conduct[ed] for the higher renewable fuel volumes, the various

complex changes to the regulatory program [relating to the RINs

and IT technology] that require close collaboration with

stakeholders, and various statutory limitations such as . . . a 60

dayCongressional review period for all significant action.” Id.16

The Congressional Review Act requires a period of 60 days

16

for congressional review of a “major rule.” 5 U.S.C. § 801(a)(3)

(2006). A “major rule” is defined, as relevant, as any rule that the

Office of Management and Budget finds has resulted in or is likely to

result in--

(A) an annual effect on the economy of $100,000,000 or

more;

(B) a major increase in costs or prices for consumers,

individual industries, Federal, State, or local government

agencies, or geographic regions; or

(C) significant adverse effects on competition, employment,

investment, productivity, innovation, or on the ability of

United States-based enterprisesto compete with foreign-based
11

EPA alerted obligated parties, much as it had in the 2008 Notice,

that although “[f]or the remainder of 2009, the current RFS1

regulations would apply,” “in anticipation of the biomass-based

diesel standard proposed for 2010, obligated parties may find it

in their best interest to plan accordingly in 2009.” Id. at 24,908. 

EPA promulgated the final revised regulations on February

3, 2010 and posted notice of the 2010 standards on its website

the same day, and published the Final Rule in the Federal

17

Register on March 26, 2010. The Final Rule made few changes

to the NPRM. Thus, obligated parties were required to use 18

enterprises in domestic and export markets.

Id. § 804(2) (2006). The term “rule” has the meaning given in

section 551 with exceptions not relevant here. Id. § 804(3).

See EPA Regulatory Announcement: EPA Finalizes

17

Regulations for the National Renewable Fuel Standard Program for

2010 and Beyond (Feb. 2010),

http://www.epa.gov/oms/renewablefuels/420f10007.pdf;

http://www.epa.gov/oms/whatsnew.htm. (Feb. 3, 2010).

For example, the Final Rule adjusted the value of the

18

biomass-based diesel volume requirement “upward by a factor of 1.5,

the Equivalence Value for biodiesel,” to ensure the mandated gallons

were used. Renewable Fuel Standard Program (RFS2) Summary and

Analysis of Comments: Chapter 3, Major Elements of the Program

Required Under EISA 3.6.2 (Feb. 2010). EPA interpreted the EISA

to require the biomass-based diesel volumes be met only with

renewable fuels that displace fossil-based diesel. See id. The

biomass-based diesel standard for 2010 was projected in the NPRM

to be .71%, while it was set in the Final Rule at 1.10%. See NPRM,

74 Fed. Reg. at 24,915; Final Rule, 75 Fed. Reg. at 14,675. EPA

treated the biomass-based diesel volume requirement as a diesel

volume, not an ethanol-equivalent volume (which is the basis for the

equivalence values), and adjusted its percentage standard by a factor
12

1.15 billion gallons of biomass-based diesel based on the

combined volume requirements for 2009/2010, with a deferred

compliance date. The Final Rule also set the final 2010

percentage standards for cellulosic biofuel, advanced biofuel,

and total renewable fuel based on the statutory tables of

applicable volumes for those fuels, in view of available volumes.

75 Fed. Reg. at 14,675. Obligated parties were required to apply

these percentage standards to their 2010 production or

importation of gasoline and diesel fuel to calculate their

renewable volume obligation for 2010. Id. at 14,676. As a

transition measure, obligated parties were allowed to use RINs

generated under the RFS1 program in 2009 and in the first part

of 2010 to meet the 2010 RFS2 renewable volume obligations,

even though these RFS1 RINs may have been generated for fuel

that did not meet the EISA’s new greenhouse gas reduction and

renewable biomass requirements. Id. at 14,723, 724. With

certain limitations, parties also could use 2008 RINs to comply

with the 2010 biomass-based diesel standard. Id. at 14,719. 19

of 1.5 (changing it from .71% to 1.10%). EPA explained in the Final

Rule that “[t]he net result is a biomass-based diesel gallon being worth

1.0 gallons toward the biomass-based diesel standard, but 1.5 gallons

toward the other [fuel] standards.” 75 Fed. Reg. at 14,716. Because

this was the first time a percentage standard was set for biomass-based

diesel and biomass-based diesel continues to be worth 1.5 gallons for

all of the other fuel standards, the Final Rule made no change in

equivalence values for biodiesel from the RFS1 regulations. Further,

because the biomass-based diesel standard changed only to account for

the 1:1 equivalence value, the biomass-based diesel standard in the

Final Rule does not meaningfully differ from the proposed standard in

the NPRM.

Under the Final Rule, obligated parties can carryover 57%

19

of their 2010 obligation. The remaining 43% represents the portion of

that obligation necessary to ensure use of the 2009 applicable volume,

and must be satisfied in 2010. 75 Fed. Reg. 14,719.
13

The compliance date for the combined 2009/2010 volume

requirement was February 28, 2011, the end of the 2010

compliance year. Id. at 14,676. The effective date of the Final

Rule was July 1, 2010, “the start of the first [reporting] quarter

following completion of the statutorily required 60-day

Congressional Review period” for a “major rule.” Id. at

14,675.20

EPA explained in the preamble that, in contrast to the

alternatives proposed by commenters, it had adopted the

combined 2009/2010 approach because it “more closely

represent[ed] what would have occurred if [EPA] had been able

to implement the 0.5 bill[ion] gal[lon] requirement in 2009.” Id.

at 14,719. This was, EPA stated, “a reasonable exercise of [its]

authority under section [7545](o)(2) to issue regulations that

ensure that the volumes for 2009 are ultimately used, even

though [EPA was] unable to issue final regulations prior to the

2009 compliance year.” Id. at 14,718. EPA observed that “the

deficit carryover provision provides a conceptual mechanism for

this approach, since it would have allowed obligated parties to

defer compliance with any or all of the 2009 standards until

2010.” Id. at 14,718. 

21

See supra note 16.

20

By notice of May 10, 2010, EPA, responding to critical

21

comments, published a “direct final rule” to amend the RFS2 program

requirements, withdrawing provisions regarding definition of terms,

the technical requirements for generating and coding of RINs and

transactions involving RINs, and the requirements for a fuel to be

considered a biogas for coding purposes. Regulation of Fuels and Fuel

Additives: Modifications to Renewable Fuel Standard Program, 75

Fed. Reg. 37,733, 37,733 (June 30, 2010). Petitioners do not rely on

these changes in challenging the Final Rule.
14

II.

Petitioners contend that the Final Rule violates the clear

statutorymandate in 42 U.S.C. § 7545(o)(2)(B) that the biomassbased diesel requirement for 2010 “shall” be 0.65 billion gallons

by imposing a combined 2009/2010 requirement of 1.15 billion

gallons. Congress’ use of the word “shall” has a clear meaning,

they maintain, citing Lopez v. Davis, 531 U.S. 230, 241 (2001),

for the proposition that “shall” imposes “discretionless

obligations.” Having missed the statutory deadline of December

19, 2008 by which Congress directed that EPA “shall” publish

the revised regulations for the 2009 requirement, petitioners

conclude that EPA lacked authority to increase the 2010 volume

requirement to include the 2009 volume requirement. In their

view, Congress’ specific directive for 2010 overrides EPA’s

general rulemaking authority, and nothing in the deficit

carryover provision suggests that EPA has authority to 22

carryover a renewable fuel requirement from 2009 into 2010. 

Put otherwise by intervenors representing the biodiesel industry

and ethanol producers, petitioners urge that because the EISA

provides that EPA “shall” issue regulations by December 19,

2008 and “shall” publish the renewable volume standard by

November 30 of the prior year, “EPA’s failure to do so requires

it to ignore its obligations under [the EISA] to ensure that the

renewable fuel requirements for 2009 and part of 2010 are

satisfied.” Intvrs.’ Br. 13. EPA offers two responses, pointing

to its mandate under section 7545(o)(2)(A)(i) to “ensure” that “at

least” the statutory volumes are used, and to the reasonableness

of its response to missing the statutory deadlines.

We begin with the text of the statute to determine whether

Congress has spoken directly to the precise issue. See generally

Barnhart v. Sigmon Coal Co., Inc., 534 U.S. 438, 450 (2002);

42 U.S.C. § 7545(o)(5)(D); see supra note 3 (2005 Act).

22
15

Chevron USA v. NRDC, 467 U.S. 837, 842 (1984); Engine Mfrs.

Ass’n v. EPA, 88 F.3d 1075, 1084 (D.C. Cir. 1996). Section

7545(o)(2)(A)(i) provides that EPA

shall promulgate regulations to ensure that

transportation fuel sold or introduced into commerce in

the United States . . . , on an annual average basis,

contains at least the applicable volume of renewable

fuel, advanced biofuel, cellulosic biofuel, and biomassbased diesel, determined in accordance with

subparagraph (B) . . . .

42 U.S.C. § 7545(o)(2)(A)(i) (emphasis added). The “ordinary

or natural meaning,” Bailey v. United States, 516 U.S. 137, 145

(1995) (internal citation omitted), of the word “ensure” is “to

make sure, [or] certain,” MERRIAM-WEBSTER’S COLLEGIATE

DICTIONARY 386 (10th ed. 1993). Congress thus delegated

authority to EPA to make certain that the 2009 applicable

volume of each type of renewable fuel is sold or introduced into

commerce. Further, as EPA observes, petitioners’ contention

that Congress has not delegated authority to EPA to use anything

other than the 0.65 billion gallons of biomass-based diesel in

setting the 2010 standard — i.e., that the general authority in

section 7545(o)(2)(A)(i) cannot increase the 2010 statutory

amount set in section 7545(o)(2)(B)(i)(IV) — overlooks the

phrase “at least” and the ambiguity it creates regarding EPA’s

determination of the 2010 standard for biomass-based diesel.23

EPA and intervenors also rely on 42 U.S.C.

23

§ 7545(o)(2)(A)(iii), as amended in 2007, which provides:

Regardless of the date of promulgation, the regulations

promulgated under clause (i) –

(I) shall contain compliance provisions applicable to

refineries, blenders, distributors, and importers, as
16

Petitioners object that EPA is suggesting for the first time on

appeal that the statutory text is ambiguous and, consequently, the

court owes no deference to this post hoc rationale, citing City of

Kansas City v. HUD, 923 F.2d 188, 192 (D.C. Cir. 1991). They

maintain that the statutory text must be interpreted so it does not

conflict with other statutory provisions, see, e.g., Ricci v.

DeStefano, 129 S. Ct. 2658, 2674 (2009), and that the clear text

and statutory structure of the EISA undermine EPA’s position. 

They also suggest that the phrase “at least” can “readily” be

interpreted to avoid a conflict with the specific volume

requirements (implicitly appearing to agree that the phrase is

ambiguous) by interpreting “at least” to mean that

“transportation fuel contains no less and no more than the

applicable volume.” ReplyBr. 7 (emphasis in original). Further,

they continue, the reference to “subparagraph (B)” in section

7545(o)(2)(A)(i) confirms that the “at least” phrase does not

authorize EPA to disregard the provisions of subparagraph (B),

wherein the “shall” directive is found for the annual volume

requirements. They note that Congress used clear statutory

language in the waiver provision to grant EPA authority to

appropriate, to ensure that the requirements of this

paragraph are met; but

(II) shall not–

(aa) restrict geographic areas in which

renewable fuel may be used; or

(bb) impose any per-gallon obligation for the

use of renewable fuel.

Clause (i), as amended by the EISA, refers to regulations to be

promulgated one year after August 8, 2005 and the revised regulations

to be promulgated not later than one year after December 19, 2007.

Petitioners reply only that EPA properly did not rely on this provision

in promulgating the Final Rule because it does not provide authority

for EPA to increase the 2010 statutory volume of biomass-based

diesel.
17

decrease the statutory volume requirements in particular

circumstances but omitted any similar provision to grant EPA 24

the authority to increase the 2010 biomass-based diesel volume

requirements.

Congress did not state in the EISA what would happen if

EPA failed to meet the statutory deadline for promulgating the

revised renewable fuel regulations on the increased 2009 volume

requirements. Although it had provided in the 2005 Act that a

default standard would apply in 2006 if the initial regulations

were not promulgated by the statutory deadline of August 8,

2006, Congress included no similar provision when it expanded 25

the renewable fuel program in the EISA. Neither did it provide

that the 2009 volume requirements should be forgone if EPA did

not promulgate the revised regulations “by one year,” or

December 19, 2009. Similarly it made no such provision if the

2010 standard deadline was missed. Precedent from the

Supreme Court and this court instructs, however, that where

there are less drastic remedies available for an agency’s failure

to meet a statutory deadline, courts should not assume Congress

intended for the agency to lose its power to act. See, e.g., Brock

v. Pierce County, 476 U.S. 253, 260 (1986). Petitioners’

response, that EPA cannot ignore that the volume requirement

set by Congress for 2010 is 0.65 billion gallons, fails to address

this precedent and is unsupported by the case law.

Contrary to the core of petitioners’ position, the Supreme

Court has declined to treat a statutory direction that an agency

“‘shall’ act within a specified time, without more, as a

jurisdictional limit precluding action later.”Barnhart v. Peabody

Coal Co., 537 U.S. 149, 158 (2003) (citing Brock, 476 U.S. 253);

See supra note 14.

24

See supra note 6.

25
18

see also Dolan v. United States, 130 S. Ct. 2533, 2538–41

(2010). In Barnhart, the Court held that an initial assignment of

a coal industry retiree eligible for benefits to an operating

company or related entity responsible for funding the benefits

was valid although made after the statutory date by which the

Commissioner of Social Security “shall” make the assignment. 

The Court observed that “[i]t misses the point simply to argue

that the [statutory date] was ‘mandatory,’ ‘imperative,’ or a

‘deadline,’ as of course it was, however unrealistic the mandate

may have been.” Id. at 157. Citing Brock, the Court noted that

it had “expressed reluctance ‘to conclude that every failure of an

agency to observe a procedural requirement voids subsequent

agency action, especially when important public rights are at

stake.’” Id. at 158 (quoting Brock, 476 U.S. at 260). The Court

had summarized its position a decade earlier: “‘if a statute does

not specify a consequence for noncompliance with statutory

timing provisions, the federal courts will not in the ordinary

course impose their own coercive sanction.’” Id. at 159 (quoting

United States v. James Daniel Good Real Property, 510 U.S. 43,

63 (1993)). Additionally, the Court noted, the statute at issue

was enacted after Brock was decided, when “Congress was

presumably aware that we do not readily infer congressional

intent to limit an agency’s power to get a mandatory job done

merely from a specification to act by a certain time.” Id. at 160. 

The Court found nothing in the statutory text to support the

conclusion that the Commissioner lacked authority to act after

the date passed, and nothing in the structure, purpose, and

legislative history to the contrary. Id. at 161.

Brock, 476 U.S. 253, is both illustrative and instructive. The

Comprehensive Education TrainingAct (“CETA”) provided that

the Secretary of Labor “shall” issue a final determination as to

the misuse of CETA funds by a grant recipient within 120 days

of receiving a complaint. 29 U.S.C. § 816(b) (Supp.V 1976)

(repealed 1982). Pierce County objected that it was prejudiced
19

when the final determination occurred after 120 days. Upon

examining the statute and its legislative history, the Supreme

Court concluded that Congress did not intend the “somewhat

incongruous result” that the Secretary would lose authority to

recover misspent funds 120 days after learning of the misuse. Id.

at 258. Observing that the harm to the Federal Treasury was “a

matter . . . of interest to every citizen,” id. at 262, the Court

instructed that when “there are less drastic remedies available for

failure to meet a statutory deadline, courts should not assume

that Congress intended the agency to lose its power to act.” Id.

at 260. In explaining its “reluctan[ce] to conclude that every

failure of an agency to observe a procedural requirement voids

subsequent agency action,” id., the Court referred to “‘the great

principle of public policy, applicable to all governments alike,

which forbids that the public interests should be prejudiced by

the negligence of the officers or agents to whose care they are

confided.’” Id. (internal citations omitted). The Supreme Court 

applied Brock’s teaching in General Motors Corp. v. United

States, 496 U.S. 530, 542 (1990), upholding EPA’s authority to

bring an enforcement action under the Clean Air Act after the

statutory deadline had passed. Lopez, 531 U.S. at 241, on which

petitioners rely, addresses a different statutory issue and casts no

doubt on this precedent.

In keeping with Supreme Court precedent, this court in

Linemaster Switch Corp. v. EPA, 938 F.2d 1299 (D.C. Cir.

1991), upheld EPA’s listing of hazardous waste sites after the

statutory deadline had passed. See 42 U.S.C. § 9605(c)(1)

(1986). EPA had developed the new hazardous ranking system

(“HRS”) almost 29 months after the statutory deadline. Between

the listing deadline and the effective date of the HRS, EPA added

71 sites to the National Priorities List, using the old HRS criteria. 

Observing that the provision imposing the deadline included no

consequences for failure to comply with it, the court declined to

resolve the statutory ambiguity through resort to deference under
20

Chevron, 467 U.S. 837, stating “it would indeed be odd to

conclude that Congress implicitly entrusted a laggard agency

with the authority to devise a remedy for its own untimeliness,”

Linemaster Switch, 938 F.2d at 1303. Instead, the court

determined for itself what Congress would have intended in

enacting a statute “to ensure that an amended [listing] would

‘accurately assess[] the relative degree of risk’” presented by

sites potentially subject to being listed. Id. (internal citation

omitted). The court upheld EPA’s authority to act after the

statutory deadline had passed, looking to the legislative history

that indicated “the strong public interest in EPA’s ongoing

identification of sites for . . . listing, combined with Congress’

accommodation of the private interests potentially harmed by

[inaccurate listings] and its contemplation of citizen suits as a

remedy for EPA non-compliance [with deadlines].” Id. 

This precedent from the Supreme Court and our court thus

makes clear that in the face of congressional silence in the EISA

on the effect of EPA’s delay in promulgating the revised

regulations, we should not presume Congress intended EPA

would lose authority to act upon missing statutory deadlines but 

must determine, see Barnhart, 537 U.S. at 161, without deferring

to post hoc arguments of counsel, see Motor Vehicle Mfrs. Ass’n

v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29, 50 (1983), what

Congress would have intended when EPA missed a statutory

deadline in the EISA. The self-evident purpose of the EISA

permits EPA’s action in promulgating the Final Rule in order “to

ensure” the volume of biomass-based diesel required for 2009 is

not forgone. Congress enacted the EISA to expand the

renewable fuel program under the 2005 Act in order “to increase

the production of clean renewable fuels.” Pub. L. No. 110–140,

121 Stat. 1492. It tied this expansion to, among other things, the

nation’s security, see id., a “matter . . . of interest to every

citizen,” as harm to the Federal Treasury was in Brock, 476 U.S.

at 262. See also NPRM, 73 Fed. Reg. at 24,916. By including
21

the authorizing phrase “at least” Congress also signaled its intent

that volumes not be reduced, at least not in the first decade of the

renewable fuel program. The structure of the statute and the

absence of a default standard for 2010 furthermore suggest that

Congress envisioned a smooth transition through the revised

renewable fuel regulations, from the 2005 Act’s renewable fuel

program (RFS1) to the EISA’s expansion of it (RFS2).

Understandably, perhaps, there thus is scant legislative history

for the EISA. 

The rulemaking record suggests, moreover, that the

deadlines in the EISA for promulgating the revised regulations

and the 2010 standard were likely unrealistic. See Barnhart, 537

U.S. at 157. The President signed the EISA into law on

December 19, 2007. Final revised regulations were due in a

year. Yet the EISA included several “new, complex provisions.”

NPRM, 74 Fed. Reg. at 24,909. A stated purpose of the EISA

was “to promote research on and deploy greenhouse gas capture

and storage options.” Pub. L. No. 110–140, 121 Stat. 1492. 

EPA noted that the provision on the greenhouse gas impact of

renewable fuels required “a comprehensive evaluation of

renewable fuels, as well as of gasoline and diesel, on the basis of

their lifecycle emissions,” NPRM, 74 Fed. Reg. at 24,909, 

including “direct and indirect emissions” and “significant

emissions from land use changes,” id. By May 26, 2009, EPA

had conducted its analyses, but because lifecycle analysis was a

new part of the renewable fuel program, EPA determined it

should solicit public and expert comment in addition to the

formal comment period on the proposed rule, and intended to do

so at a forthcoming public workshop and by peer reviews of key

components of its analysis, all before the final rule was adopted. 

See id.

Under the circumstances, Congress’ purpose in expanding

the renewable fuel program under the EISA is better served by
22

EPA’s approach in the Final Rule than it would be by forgoing

the 2009 applicable volume requirement as petitioners propose. 

Congress required a biomass-based diesel program beginning

January 1, 2009, with a volume mandate of 0.5 billion gallons,

and it directed EPA to “ensure” that volume would be used in

2009. It also directed EPA to “ensure” that “at least” the set

volumes were used each year. EPA’s 2009/2010 solution to

account for its delay reflects Congress’ vision in expanding the

renewable fuel program without rendering nugatory the EISA’s

restrictions on EPA’s authority to revise the volume

requirements as such. See Whitman v. Am. Trucking Ass’ns, 531

U.S. 457, 484–85 (2001). It seems highly unlikely that in 2007

Congress intended in enacting the EISA that EPA’s failure

timely to issue the revised regulations or the 2010 standard

would lead to the drastic and “somewhat incongruous result,”

Brock, 476 U.S. at 258, that petitioners urge, namely precluding

EPA from ensuring that both the 2009 and 2010 applicable

volumes of biomass-based diesel are eventually sold or

introduced into commerce. As EPA suggests, “such a result

seems flatly contrary to Congress’ intent and would turn agency

delay into a windfall for the regulated entities.” Respt.’s Br. 31.

Petitioners’ arguments to the contrary are unpersuasive.

They maintain that nothing in the EISA’s structure indicates

EPA can increase the applicable volume of biomass-based diesel

above 0.65 billion gallons for 2010, and that the grant of express

authority to waive applicable volumes is limited by specific

criteria. But EPA relies not on general structure but on its

express authority under section 7545(o)(2)(A)(i). See 75 Fed.

Reg. at 14,718. Congress mandated EPA to “ensure” that

obligated parties sell or introduce into commerce the 2009

applicable volumes of biomass-based diesel and the only

question is how EPA may exercise that authority when it misses

the statutory deadline for promulgating the implementing

regulations. Nothing in the waiver provision suggests anything
23

negative about EPA’s authority to ensure 2009 applicable

volumes are used, even if EPA acts after the statutory deadline,

a situation not addressed in the waiver provision. Indeed

intervenors suggest that the restrictions in the waiver provision

“reinforce[] how serious Congress was about compliance with

[the EISA’s] annual volume requirements, and further establishes

that EPA could not ignore the 2009 mandate.” Intvrs.’ Br. 20. 

Likewise, petitioners’ focus on Congress’ use of the word

“shall” in the tables setting the 2009 and 2010 volumes

overlooks the authority Congress granted to EPA to ensure

compliance with those volumes by providing that EPA ensure

that “at least” the applicable volume is used each year. They

offer no explanation why the same use of “shall” in connection

with the 2009 volume requirement means nothing, while its use

for 2010 means so much.

In urging that by delineating the years in which EPA can

specify an applicable volume “Congress reinforced the

conclusion that EPA is not authorized to disregard Congress’s

specific instruction that [EPA] ‘shall’ impose a 0.65 billion

gallon biomass-based diesel mandate in 2010,” Petrs.’ Br. 25

(emphasis in the original), petitioners create a straw man. EPA

is not asserting authority to establish any applicable volume it

considers appropriate; it disclaimed such authority when that

suggestion was made, see RFS2 Summary and Analysis of

Comments, Section 3.6.2. Rather, EPA incorporated into the

2010 standard the mandated 2009 applicable volume of

renewable fuel that otherwise would not be used. 

Petitioners also maintain that the deficit carryover provision,

as a “conceptual mechanism,” 75 Fed. Reg. at 14,718, is not an

express authorization for EPA to combine two years of

applicable volumes. Intervenors suggest this puts form over

substance. EPA, in any event, considered the deficit carryover
24

provision, which generally permits obligated parties to defer

compliance with one year’s obligations to the following year,

only as a model to support by analogy the reasonableness of the

approach it adopted for satisfying the statutory directive to

“ensure” use of the 2009 volumes where the renewable fuel

standard was not published until 2010. See id. By not relying on

the deficit carryover requirements, EPA afforded obligated

parties more time for the 2009/2010 volume in the event they did

not actually purchase and use the required volumes of biodiesel

in 2009. Id. at 14,719. Thus, intervenors note, petitioners are

better off under the Final Rule than they would be had EPA

implemented the EISA’s expanded renewable fuel program on

time. As intervenors suggest, under EPA’s approach the 2010

statutory volume remains 0.65 billion gallons, as EPA merely

postponed the compliance date for the statutory 2009 volume. 

The cases on which petitioners rely are inapposite. In

Friends of the Earth, Inc. v. EPA, 446 F.3d 140, 142 (D.C. Cir.

2006), the court held that EPA lacked authority to set seasonal or

annual loads for discharge standards for certain pollutants when

the Clean Water Act mandated “daily” loads. In American

Petroleum Institute v. EPA, 52 F.3d 1113, 1119 (D.C. Cir 1995),

the court similarly held that nothing in the Clean Air Act gave

EPA authority to require a percentage of the oxygen in

reformulated gasoline come from renewable sources. Neither of

these situations is comparable to the instant case where EPA is

following Congress’ direction to “ensure” the mandated fuel

volumes are met. In those cases, unlike here, there was no gap

in the statute for EPA to fill. Petitioners’ reliance on the court’s

observation in NRDC v. Thomas, 805 F.2d 410, 435 (D.C. Cir.

1986), that “two wrongs do not make a right,” thus misses the

mark.

We therefore hold that the EISA authorized EPA to apply in

2010 the volume requirement for biomass-based diesel that
25

Congress established for 2009. Absent Congress’ provision for

a loss of authority as a result of delay, the purpose and structure

of the EISA are contraindications of a congressional intent to

divest EPA of authority to act when it missed, due in part to

carrying out the EISA’s directives, the statutory deadlines for

revising the RFS1 regulations and setting biomass-based diesel

standards for 2009 and 2010.

III.

Petitioners also contend that by imposing renewable fuel

standards that became effective in July 2010 but that apply to

2010 as a whole, the Final Rule is impermissibly retroactive. 

They point to the definition of “rule” in the Administrative

Procedure Act as “the whole or a part of an agency statement of

general or particular applicability and future effect,” 5 U.S.C.

§ 551(4) (emphasis added), and to the “deeply rooted”

presumption that “‘the legal effect of conduct should ordinarily

be assessed under the law that existed when the conduct took

place,’” Landgraf v. USI Film Products, 511 U.S. 244, 265

(1994) (internal citation omitted). They note the Supreme

Court’s admonition that “[e]ven where some substantial

justification for retroactive rulemaking is presented, courts

should be reluctant to find such authority absent an express

statutory grant.” Bowen v. Georgetown Univ. Hosp., 488 U.S.

204, 208–09 (1988). EPA responds that, even assuming the

Final Rule has retroactive effects, Congress expressly and

impliedly authorized this result by directing EPA to “ensure”26

the specified renewable fuel volume requirements are sold or

introduced into commerce on an average basis, and also by

requiring EPA to do so “regardless of the date of promulgation”27

See supra note 15.

26

See supra note 23.

27
26

of the necessary implementing regulations. To the extent the

Final Rule may be retroactive, we hold that EPA did not exceed

its authority under the EISA.

A.

In determining whether a statute or regulation has

retroactive effect, the court considers among other things

“whether it would . . . impose new duties with respect to

transactions already completed.” Landgraf, 511 U.S. at 280; see

Boniface v. U.S. Dep’t of Homeland Sec., 613 F.3d 282, 288

(D.C. Cir. 2010). This court has recognized the distinction

between a rule that imposes new sanctions on past conduct,

which is retroactive and invalid unless specifically authorized,

and one that merely “upsets expectations,” which is secondarily

retroactive and invalid only if arbitrary and capricious. See Nat’l

Cable & Telecomms. Ass’n v. FCC, 567 F.3d 659, 670–71 (D.C.

Cir. 2009). Landgraf, on which petitioners rely, makes a similar

distinction for statutes, stating that “[a] statute does not operate

‘retrospectively’ merely because it is applied in a case arising

from conduct antedating the statute’s enactment, . . . or upsets

expectations based in prior law.” 511 U.S. at 269 & 270 n.24

(internal citation omitted).

Petitioners contend that the Final Rule is impermissibly

retroactive because as of July 1, 2010, when the Final Rule

became effective, they were subjected to new duties or

disabilities regarding past transactions when they were required

to obtain RINs to demonstrate their compliance with the four

renewable fuel standards based on their purchase or production

of types of fuel that were finally identified in the Final Rule, see

75 Fed. Reg. at 14,676. They note that although the 2009

renewable fuel standard was (timely) published in the 2008

Notice, 73 Fed. Reg. at 70,644– 45, EPA did not publish separate

standards for biomass-based diesel, advanced biofuels, or

cellulosic biofuels until the NPRM, 74 Fed. Reg. at 24,915, and
27

then adopted some changes with regard to fuel categories in the

Final Rule, 75 Fed. Reg. at 14,675. They maintain that having

until February 28, 2011 to obtain RINs does not cure the

retroactivityproblem because “it is the production or importation

of transportation fuel that triggers the obligation [to] accumulate

RINs.” Petrs.’ Br. 19. Consequently, petitioners state, “[p]rior to

the promulgation of the [F]inal [R]ule, obligated parties lacked

certainty regarding what renewable fuels EPA would consider to

be compliant with RFS2 requirements (such as [greenhouse gas]

thresholds established through lifecycle analysis).” Petrs.’ Br.

32. Likewise they “lacked assurance that RINs they might

accumulate prior to the issuance of a final rule would qualify

under the RFS2 program.” Id. 

In the preamble, EPA stated that the Final Rule was not

retroactive because its approach was forward looking because

compliance with any new requirements would be determined in

the spring of 2011. It also stated that the Final Rule does “not

change in any way the legal obligations or requirements that

apply prior to [the Final Rule’s] effective date.” 75 Fed. Reg. at

14,676. EPA does not defend this position on appeal, arguing

instead that, assuming there were retroactive effects, it had

authority to engage in retroactive rulemaking. 

Intervenors, however, support EPA’s regulatory position

that the Final Rule is not retroactive, at least in a primary sense. 

They contend that “[o]bligated parties were fully aware of their

statutory duty to acquire renewable fuels if they participated in

the domestic market in 2009 or 2010,” and “[t]o the extent the

[RFS2] regulations impair the value of past bargains or alter their

future legal effect (which is the crux of [p]etitioners’

retroactivity allegation), they are not ‘retroactive’ within the

meaning of the law that [p]etitioners cite.” Intvrs.’ Br. 25. 

Intervenors point out that the 2010 renewable volume

requirements were set by the EISA in 2007, not in the RFS2
28

regulations, and that, contrary to petitioners’ assertion that the

2010 renewable volume obligations create new obligations for

transactions occurring before the Final Rule took effect, the law

as it existed since January 1, 2009 is the RFS1 regulatory

program under the 2005 Act, as amended in 2007 by the EISA. 

Retroactivity as defined in Landgraf, as intervenors note,

“turns on ‘the nature and extent of the change in the law and the

degree of connection between the operation of the new rule and

a relevant past event.’” Intvrs.’ Br. 25 (citing 511 U.S. at 270). 

The EISA set forth the minimum annual volumes for each year,

identified producers and importers of transportation fuel as

obligated parties subject to those requirements, and defined

transportation fuel to include both gasoline and diesel fuel. In

28

intervenors’ view, petitioners’ objections that their members

“lacked certainty” and “lacked assurance” about the scope of

their obligations under the EISA “all but undoes their

retroactivity theory” because these objections do not show

petitioners lacked notice of their obligations to fulfill the volume

Thus, intervenors note,

28

[e]ven [p]etitioners’ hypothetical fleeting diesel importer –

who imported a million gallons of diesel and quit the business

before the [RFS2] regulations were finalized in 2010 and who

must now acquire some renewable fuels – cannot assert a

legitimate expectation that its transaction would not be subject

to the Renewable Fuel Standard.

Intvrs.’ Br. 26 n.8. See Petrs.’ Br. 33–34. The EISA applied to diesel

importers and “put them on notice of their obligations under the

statute,” the only exceptions to these requirements in 2009 and 2010

being, intervenors note, for small refineries. Intvrs.’ Br. 26 n.8 (citing

42 U.S.C. § 7545(o)(9)). Further, intervenors note, EPA provided

notice and met with the petroleum industry throughout the rulemaking

process. See id. (citing 75 Fed. Reg. at 14,673).
29

mandates. Id. at 27. Indeed, in Landgraf the Supreme Court

suggested that the “familiar considerations of fair notice,

reasonable reliance, and settled expectations offer sound

guidance” on retroactivity. 511 U.S. at 270. Cases like Bowen,

488 U.S. 204, and National Mining Ass’n v. Department of

Labor, 292 F.3d 849 (D.C. Cir. 2002), are distinguishable, as

intervenors point out, as instances in which an agency

“completely reversed the status quo ante.” Intvrs.’ Br. 27. 

Intervenors also point to industry comments indicating some

obligated parties in fact began preparing for their 2010

obligations, citing comments by petitioners, Exxon, and

Chevron, and demonstrating that the renewable fuel volume is

“simply a formula (the required volume divided by the amount

of applicable transportation fuel estimated to be sold) that can

easily be estimated by obligated parties.” Id. 27–28. To 29

intervenors, the fact that EPA had “to further define certain

requirements regarding what RINs to purchase,” does not show

the Final Rule is retroactive because “the final renewable volume

obligations are based on obligations previouslycreated bystatute

and issuing [standards] without revision prior to November 30 is

not a prerequisite to EPA’s mandate to ensure the entire volumes

are met.” Id. at 28.

In National Cable, the court rejected a retroactivity

challenge to a rule barring cable operators from entering

exclusivity contracts for multi-unit dwellings and forbidding

enforcement of such contracts executed before the rule was

See formulas for calculating the percentage standards, EPA

29

Memorandum on Calculation of the Renewable Fuel Standard for

Gasoline and Diesel (Apr. 30, 2009). Intervenors explain that issuance

of the final renewable fuel standard by November 30 of the prior year

simply allows EPA to rely on the most recent estimates of next year’s

fuel production and use. See 42 U.S.C. § 7545(o)(3)(A); Intvrs.’ Br.

28.
30

adopted. There it was argued that the agency’s decision to apply

its rule to existing contracts amounted to “‘directly retroactive’

action barred by the APA[].” 567 F.3d at 670 (internal citations

omitted). Alternatively, it was argued that the rule had “harmful,

secondarily retroactive effects that the [agency] failed to

consider.” Id. The court was unpersuaded, holding that “the

[agency’s] action has only ‘future effect’ as the APA and our

precedents use that term.” Id. Noting that “[t]he exclusivity ban

purports to alter only the present situation, not ‘the past legal

consequences of past actions,’” the court emphasized that it has

“repeatedly made clear that an agency order that only ‘upsets

expectations based on prior law is not retroactive.’” Id. (internal

citations omitted). The agency action merely “impaired the

future value of past bargains but has not rendered past actions

illegal or otherwise sanctionable.” Id. The court quoted from

Chemical Waste Management v. EPA, 869 F.2d 1526, 1536

(D.C. Cir. 1989), where the court had observed that “[i]t is often

the case that a business will undertake a certain course of

conduct based on the current law, and will then find its

expectations frustrated when the law changes.” 567 F.3d at 670. 

In Chemical Waste, the court had further observed that “[t]his

has never been thought to constitute retroactive lawmaking, and

indeed most economic regulation would be unworkable if all

laws disrupting prior expectations were deemed suspect.” 869

F.2d at 1536. By parity of reasoning, the court in National Cable

held that “[s]uch expectations, however legitimate, cannot

furnish a sufficient basis for identifying impermissibly

retroactive rules.” 567 F.3d at 670.

Additionally, intervenors maintain, the Final Rule does not

make past conduct illegal or newly sanctionable for at least two

reasons. First, in the transition from RFS1 to RFS2, EPA

allowed obligated parties “credit for renewable fuel purchased in

2009, and protect[ed] any vested rights in credits (or RINs)

already purchased.” Intvrs.’ Br. 30; see 75 Fed. Reg. at 14,719,
31

724. There is no change. As in 2009, EPA determined 30

obligated parties will continue to receive 1.5 equivalent credits

for each gallon of biodiesel, including biomass-based diesel. See

supra note 18. Petitioners’ claim, then, that under the RFS2

regulations the biodiesel RINs are valued at only 1 gallon of

renewable fuel whereas the 2009 biodiesel RINs were worth 1.5

gallons for each gallon of biodiesel, ignores the equivalence

provided by the biomass-based diesel standard. See supra note

18. Further, EPA applied this same 1.5 credit to the advanced

biofuels requirement, “determining that the 2010 biomass-based

diesel requirement ‘will automatically fulfill the advanced

biofuel standard, given the energy-based Equivalence Values for

biodiesel and renewable diesel.’” Intvrs.’ Br. 30–31 (quoting

Renewable Fuel Standard Program (RFS2) Summary and

Analysis of Comments at 3.6.2); see supra note 18. Second,

Petitioner NPRA had commented:

30

To be fair to companies that relied on EPA’s stronglyworded advice and to maintain the regulated industry’s

confidence in EPA’s written word, [EPA] needs to preserve

the ability to use prior-year diesel RINs for biomass-based

diesel compliance regardless of how and when the program

finally rolls out. To do otherwise is to strand capital or

operating expense. Companies that followed [EPA’s] advice

should not be punished for acting in good faith. Also at risk

is EPA’s often-used contention that regulated parties know

what is coming and so have time to prepare for compliance in

excess of what is provided between final Agency action and

effective date. If EPA’s written advice in this case cannot be

relied upon, regulated parties cannot possibly be expected to

do any compliance planning until final action is complete.

Comments of the National Petrochemical & Refiners Association on

EPA’s Proposed Changes to the Renewable Fuel Standard Rules at 12

(Sept. 25, 2009) (emphasis in original).
32

although the Final Rule changed EPA’s proposed determination

as to which renewable fuels will qualify for each mandate, “those

determinations applysolely to renewable fuel produced (and thus

purchased) after July 1, 2010,” Intvrs.’ Br. 31 (citing 75 Fed.

Reg. at 14,877), and “all RINs generated in 2010 will be valid

for meeting the 2010 standards,” 75 Fed. Reg. at 14,684. 

Petitioners’ contrary suggestion, that the Final Rule “attaches

new consequences to 2009 transactions” by changing the fuels

that qualify to generate RINs, is incorrect. Petrs.’ Br. 35. 

Intervenors conclude obligated parties that did not purchase

biodiesel in 2009 (or for the first half of 2010) unreasonably

relied on the assumption that EPA would not require the

biomass-based diesel levels to be met. 

Intervenors acknowledge, however, that to the extent

petitioners contend theRFS2 regulations affect their expectations

and the future value of past bargains, their objection is to

secondary retroactivity, see Nat’l Cable, 567 F.3d at 670–71;see

also Bowen, 488 U.S. at 220 (Scalia, J., concurring). Intervenors

respond that this objection is overcome by the reasonableness of

EPA’s approach in the Final Rule. 

Petitioners resist categorizing their retroactivitychallenge as

confined to secondary retroactivity on two grounds. First,

petitioners reply that “[r]etroactive rules are not limited to those

that render past actions ‘illegal’” but include “laws that impose

new obligations on completed transactions.” ReplyBr. 17. They

point, however, onlyto their hypothetical diesel importer without

claiming that either they or their members include such a

company or disputing intervenors’ analysis of the state of the law

prior to July 1, 2010. See supra note 28. Second, petitioners

point out that the EISA is not self-executing and required

revisions to the RFS1 regulations promulgated under the 2005

Act. This is evident to some extent from the plain text of the

EISA and, indeed, EPA acknowledged that “[w]ith very few
33

exceptions, the new EISA requirements are not effective until

such time as EPA issues final regulations to implement them,”

2008 Notice, 73 Fed. Reg. at 70,643. 

It is unnecessary for the court to resolve whether petitioners

have thus shown that the legal obligations for pre-July 1, 2010

production or importation changed to their detriment under the

Final Rule. If petitioners are correct that as of July 1, 2010 they

were subject to new duties or disabilities regarding past

transactions, any primary retroactive effects were implicitly

authorized under the EISA and EPA reasonably balanced any

retroactive effects against the benefits of applying the RFS2

regulations to the full calendar year. 

B.

In Sierra Club v. Whitman, 285 F.3d 63, 68 (D.C. Cir.

2002), this court observed that although “[t]he relevant

provisions of the Clean Air Act contain no language suggesting

that Congress intended to give EPA the unusual ability to

implement rules retroactively,” “[t]here may be an exception for

situations in which the ‘statute prescribes a deadline by which

particular rules must be in effect’ and the ‘agency misses that

deadline.’” The internal quotation was to Mr. Justice Scalia’s

concurring opinion in Bowen, 488 U.S. at 224–25, which

observed additionallythat the retroactivitymust be “reasonable.”

Id. at 224. This court has “treat[ed] Justice Scalia’s concurring

opinion as substantially authoritative, though noting that ‘[t]he

Bowen majority . . . neither embraced nor rejected Justice

Scalia’s view.’” Celtronix Telemetry, Inc. v. FCC, 272 F.3d 585,

588 (D.C. Cir. 2001) (citing and quoting Bergerco Canada v.

U.S. Treasury Dep’t, 129 F.3d 189, 192–93 (D.C. Cir. 1997)). 

The court in Sierra Club concluded that retroactive application

would not be reasonable because “[r]etroactive relief would

likely impose large costs on the States . . . even though they were
34

not on notice at the time.” 285 F.3d at 68. A contrary

conclusion is warranted in the instant case.

EPA had clear albeit implicit authority under the EISA to

apply both the 2009 and 2010 volume requirements in the 2010

calendar year in order to achieve the statutory purpose. The

structure of the EISA demonstrates that Congress anticipated the

possibility of some retroactive impacts in the first year of the

expanded renewable fuel program. Cf. Bowen, 488 U.S. at

209–11. Congress set volume requirements for the entire

calendar year even though that year’s renewable fuel standard

was not required to be in place until November 30 of the prior

year and the revised regulations were not required to be in place

until December 19, 2008. Thus, even if the 2009 renewable fuel

standard was in place by November 30, 2008 and the revised

regulations had been promulgated by December 19, 2008, the

final rule would not have been effective until completion of the

60-day Congressional Review period for a major rule, see supra

note 16, at the earliest February 18, 2009, one and one-half

months into the calendar year. Yet the revised regulations would

have applied to all of an obligated party’s production or

importation of gasoline or diesel fuel in the 2009 calendar year. 

As Congress structured the EISA, then, Congress knew that

in the first year of the expanded renewable fuel standard there

could be one and one-half months of retroactive effect from the

effective date of the revised regulations. In initially establishing

the renewable fuel program Congress was explicitly aware EPA

might miss a statutory deadline for promulgating regulations.

The 2005 Act set an August 8, 2006 deadline but directed that

those regulations would apply to the entire year, regardless of

when the regulations were issued ; further, that if EPA did not 31

promulgate regulations by that date, then the default renewable

See supra note 4.

31
35

fuel standard would apply for all of 2006. The absence of a

32

comparable default provision in the EISA appears explained by

the fact that Congress was expanding an existing renewable fuel

program and EPA could, as it did, leave in place the RFS1

regulatory program, adjusting it to incorporate the 2009 volume

requirement, until the revised regulations under the EISA (i.e.,

RFS2) were finalized. See 2008 Notice, 73 Fed. Reg. at 70,643. 

EPA points to section 7545(o)(2)(A)(iii), supra note 23, and that

provision indicates as well Congress’ focus on ensuring the

annual volume requirement was met regardless of EPA delay. 

The Final Rule adopts the same approach: putting the 2009/2010

volume requirements in place at the earliest date notwithstanding

agency delay.

Furthermore, unlike in Whitman, 285 F.3d at 68, the effect

of the Final Rule’s retroactivity does not make “the situation

worse,” id., for the obligated parties had ample notice that they

would need to accumulate RINs to meet the 2010 standards. 

Long before the Final Rule was published in the Federal Register

on March 26, 2010, the 2008 Notice alerted obligated parties to

EPA’s likely approach of increasing the 2010 obligation and

allowing 2009 RINs to be counted in meeting that obligation,

and advised that it “would behoove [obligated parties] to acquire

the necessary RINs . . . in 2009 in preparation for their 2010

compliance demonstration.” 73 Fed. Reg. at 70,643. Similar

advice was included in the NPRM when the 2009/2010 approach

was formally proposed. 74 Fed. Reg. at 24,908. Obligated

parties had actual notice of the 2010 standards when they were

posted on EPA’s website on February 3, 2010. See NPRA

Responds to New Renewable Fuel Standard Guidance for 2010

and Beyond (Feb. 3, 2010); API Statement on RFS2

Announcement (Feb. 3, 2010). EPA found that renewable fuel

producers and importers continued to generate RINs between

See supra note 6.

32
36

January 1 and July 1, 2010 for fuels qualifying as renewable

fuels under the RFS1 program. 75 Fed. Reg. at 14,676. Under

the Final Rule, these RINs are available for purchase and can be

used to demonstrate compliance with the 2010 standard, id., and

so obligated parties are able to purchase RINs towards

compliancewith their 2010 obligations during the entire calendar

year. And with one limited exception, obligated parties can carry

over a deficit from 2010 into 2011, and they have until February

28, 2011 to demonstrate their compliance with the 2010

standards. See 75 Fed. Reg. at 14,719; supra note 19.

C.

Petitioners respond that the court cannot uphold the Final

Rule based on EPA’s post hoc rationalization that it is

permissiblyretroactive, as opposed to not being retroactive at all. 

Although petitioners do not seek a remand of the Final Rule,

their position presents the question whether a remand is required. 

See State Farm, 463 U.S. at 43. During oral argument counsel

for EPA suggested a remand is not required because the question

whether the Final Rule was impermissibly retroactive is a legal

question for the court to decide and does not involve a policy or

judgment entrusted to EPA by Congress. Oral Argument at

40:50. But in State Farm, the Supreme Court, citing SEC v.

Chenery Corp., 332 U.S. 194, 196 (1947), adopted the same

approach in a rulemaking as in an adjudication to the extent it

rejected the view that the court could supply reasons for the

agency’s action that the agency has not given. 436 U.S. at 43. 

In the initial Chenery decision, the Supreme Court instructed that

when Congress has delegated “a determination of policy or

judgment which the agency alone is authorized to make and

which it has not made, a judicial judgment cannot be made to do

service for an administrative judgment.” SEC v. Chenery Corp.,

318 U.S. 80, 88 (1943) (emphasis added). It follows that

although it is for the court to decide the legal question presented

by petitioners’ retroactivity challenge to the Final Rule, the
37

agency had to grapple with the question, given its delay, in

reaching its determination about how it would apply the revised

regulations promulgated pursuant to the EISA. “[T]he courts

may not accept appellate counsel’s post hoc rationalizations for

agency action.” State Farm, 463 U.S. at 50. 

We reject petitioners’ position, however, because it is based

upon the false premise that EPA did not “consider whether the

strong considerations that weigh against adopting retroactive

rules would justify a different course than it chose.” Reply Br.

18. The rulemaking record demonstrates that, in rejecting

obligated parties’ concerns about possible retroactive effects,

EPA has fulfilled its obligation “to consider the relative benefits

and burdens,” National Cable, 567 F.3d at 671, in concluding

that applying the RFS2 standard to the entire 2010 calendar year

was the course “clearly . . . most consistent with [the] EISA’s

requirement of four different volume mandates for all of calendar

year 2010,” 75 Fed. Reg. at 14,676. 

First, EPA concluded that there was adequate lead time. “To

facilitate the volume obligations being based on the full year’s

gasoline and diesel production, and to enable the smooth

transition,” the revised regulations provided that RINs “that were

generated under the RFS1 regulations will continue to be valid

for compliance with the RFS2 obligations.” 75 Fed. Reg. at

14,675. Obligated parties also would have “two months after the

end of the calendar year,” until February 28, 2011, to

demonstrate compliance with their volume obligations. Id. at

14,676. EPA noted that there was an adequate supply of RINs

available, and that having the transition from the RFS1

regulatory program occur on July 1, 2010, the start of the first

quarter following completion of the statutorily required 60–day

Congressional Review period, would simplifyrecordkeeping and

reporting transitions to the RFS2 regulations. Id. at 14,675. 

EPA observed that obligated parties comply by obtaining the
38

appropriate number of RINs from producers of renewable fuel,

which is a matter of contract or other arrangements with

renewable fuel producers or other holders of RINs. See id. at

14,676. They do not need lead time for construction or

investment purposes; they are not changing the way they produce

gasoline or diesel; they do not need to design or install new

equipment, or take other actions that require longer lead time. Id. 

Although EPA had endorsed a delayed effective date for the

initial renewable fuel program, when the regulatory system was

new and time was needed to put in place the RIN tracking system

and train staff, see RFS1, 72 Fed. Reg. at 23,913, EPA noted that

now “[o]bligated parties . . . have experience implementing

RFS1 and the actions needed to comply [with RFS2] are a

continuation of these kinds of RFS1 activities.” 75 Fed. Reg. at

14,676. 

Second, EPA concluded that obligated parties “have

received adequate notice of this obligation,” id., referencing the

NPRM, EPA’s “discussions with many stakeholders during the

rulemaking,” and publication of the Final Rule in the Federal

Register. Id. In reaching its conclusion, EPA also took into

consideration what was required for the re-registration process

of RINs for 2010 and IT systems changes that would be

necessary. See id. 

Third, EPA considered other approaches and found them

problematic. In the NPRM, EPA sought comments on different

effective dates and reduction of the total renewable fuel standard

for 2010. See 74 Fed. Reg. at 24,956. Upon consideration of the

alternatives suggested by refiners and producers — from

delaying the effective date to 2011 to using an interim rule for

2009 — EPA concluded these approaches would create

“significant legal and policy issues” without meeting the volume

mandates at the earliest time. 75 Fed. Reg. at 14,718–19. For

example, the suggestion for an interim rule that put in place a
39

new volume requirement without also putting in place the

EISA’s new definition of biomass-based diesel renewable fuel

and renewable biomass would have required a new proposal with

public notice and time for public comment, making it unlikely

any interim rule could have affected biodiesel demand in 2009. 

See id. Further, EPA explained, resources applied to the interim

rule would have been unavailable for development of the final

RFS2 rulemaking and undermined EPA’s ability to complete the

RFS2 program in time for its implementation in 2010. See id. at

14,719.

Because EPA balanced the benefits and the burdens

attendant to its approach, and considered the suggested

alternatives, a remand would serve no purpose. See NLRB v.

Wyman-Gordon Co., 394 U.S. 759, 765 n.6 (1969); Nat’l

Mining Ass’n v. U.S. Dep’t of Interior, 251 F.3d 1007, 1014

(D.C. Cir. 2001); see also Mass. Trustees of E. Gas & Fuel, 377

U.S. 235, 247 (1964). EPA has already adequately examined the

claimed retroactive effects of the Final Rule in determining how

best to carry out Congress’ mandate that it “ensure” the

applicable volume requirement for 2009 is met. 

IV.

In what petitioners term the “leadtime” issue, they contend

that in order to give obligated parties the time specified by

Congress to comply with the RFS2 regulations, “if the rules take

effect on July 1, 2010, they must be issued by June 17, and

cannot apply to transactions completed before July 1.” ReplyBr.

28. Petitioners note that EPA delayed publication of RFS2

regulations and the 2010 standard in the Federal Register until

March 26, 2010, but imposed obligations on transactions

beginning January 1, 2010. There is no meaningful difference

between this contention, however, and petitioners’ contention

that the Final Rule is impermissibly retroactive.
40

Lastly, petitioners contended in their opening brief that the

credit and deficit carryover provisions require EPA to give

petitioners “the full statutory compliance period of one year to

fulfill each year’s volume obligations.” Petrs.’ Br. 39. On reply

petitioners retreat to the position that “EPA ignore[d] the option

. . . of providing a shorter period of time to comply with a

proportionally reduced obligation, such as six months to comply

with 50 percent of the annual obligation.” Reply Br. 28. The

cited provisions merely limit the duration of the credits obligated

parties may generate and establish conditions for carrying

forward deficits. The rulemaking shows EPA considered other

options and rejected them. In any event, the obligated parties

represented by petitioners were given more than a year to comply

with the Final Rule — from at least February 3, 2010, when

notice of the 2010 standards in the Final Rule was posted on

EPA’s website and petitioners issued press releases indicating

familiarity with the Final Rule, until February 28, 2011, when

they will need to show that they have complied with the RFS2

regulations for 2010 — and no provision in the EISA requires

EPA to create a “proportionally reduced obligation.”

Accordingly, we deny the petitions for review.