Center for Biological Diversity v. EPA

United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued November 1, 2024 Decided June 20, 2025

No. 23-1177

CENTER FOR BIOLOGICAL DIVERSITY,

PETITIONER

v.

ENVIRONMENTAL PROTECTION AGENCY, ET AL.,

RESPONDENTS

AMERICAN PETROLEUM INSTITUTE, ET AL.,

INTERVENORS

Consolidated with 23-1240, 23-1243, 23-1246, 23-1247,

23-1249

On Petitions for Review of a Final Rule

of the Environmental Protection Agency

Elizabeth B. Dawson and Jonathan G. Hardin argued the

causes for Refiner Petitioners. With them on the briefs were

Robert J. Meyers, Alexandra Magill Bromer, Michael R.

Huston, Jeffrey R. Holmstead, Brittany M. Pemberton, Richard

S. Moskowitz, Tyler J. Kubik, and Karl J. Worsham.

2

Margaret A. Coulter and Carrie Apfel argued the causes

for Environmental Petitioners. With them on the briefs were

Jason C. Rylander, Peter Lehner, and Ashley Ingram.

Sandra P. Franco argued the cause for petitioner

Sustainable Advanced Biofuel Refiners Coalition. With her on

the briefs was Jerome C. Muys, Jr.

Jeremy M. Bylund argued the cause for petitioner Neste

US, Inc. With him on the briefs were Amina Dammann, Ilana

Saltzbart, Ashley C. Parrish, and K. Paige Tenkhoff.

Alexander M. Purpuro and John H. Martin, Attorneys,

U.S. Department of Justice, argued the causes for respondents.

With them on the brief were Todd Kim, Assistant Attorney

General, and Kimere J. Kimball and Joseph Crusham,

Attorneys.

David M. Lehn argued the cause for Biofuel Intervenors

responding to Refiner Petitioners’ brief. With him on the brief

were Matthew W. Morrison, Shelby L. Dyl, Sandra P. Franco,

Bryan Killian, and Douglas Hastings.

Ethan G. Shenkman argued the cause for Biofuel

Intervenors responding to Environmental Petitioners’ brief.

With him on the brief were Matthew W. Morrison, Bryan

Killian, and Douglas Hastings.

Robert J. Meyers, Elizabeth B. Dawson, Richard S.

Moskowitz, Tyler Kubik, Robert A. Long, Jr., Kevin F. King,

Thomas R. Brugato, MaKade C. Claypool, John Wagner, and

Michele Schoeppe were on the brief for intervenors American

Fuel & Petrochemical Manufacturers and American Petroleum

Institute in support of respondents. Daniel G. Randolph

entered an appearance.

3

Kyle Danish, Tyson C. Kade, and Charlene Koski were on

the brief for amici curiae Agricultural, Biomass, and

Greenhouse Gas Lifecycle Scientists in support of respondents.

Before: PILLARD, KATSAS and CHILDS, Circuit Judges.

Opinion for the Court filed PER CURIAM:

Background

A. The Renewable Fuel Standards Program

B. The Endangered Species Act

C. The Set Rule

D. Petitioners

E. Jurisdiction and Standards of Review

Discussion

I. Environmental Petitioners

A. Clean Air Act

B. Endangered Species Act

C. Remedy

II. Refiner Petitioners

A. Late and Supplemental Standards

B. All Volumes

C. Conventional Renewable Fuels

D. Cellulosic Biofuels

E. RIN Cost-Passthrough Theory

III. Neste

A. Recordkeeping Provisions

B. RIN Generation Provision

IV. SABR

Conclusion

Opinion concurring in part and dissenting in part filed by

Circuit Judge KATSAS.

4

PER CURIAM: By now, EPA is accustomed to challenges

to its implementation of the Clean Air Act’s (CAA) Renewable

Fuel Standards (RFS) Program. The RFS Program is generally

recognized as Congress’s attempt to promote renewable energy

and lower greenhouse gas emissions by requiring the petroleum

industry to introduce increasing volumes of renewable fuel

from year to year. See 42 U.S.C. § 7545(o). Last year, we

reviewed RFS Program standards for the years 2020, 2021, and

2022. See Sinclair Wyo. Refin. Co. LLC v. EPA (Sinclair Wyo.

I), 101 F.4th 871, 877 (D.C. Cir. 2024). We now consider

consolidated petitions for review of EPA’s RFS Program

standards for the years 2023, 2024, and 2025. See Renewable

Fuel Standard (RFS) Program: Standards for 2023-2025 and

Other Changes, 88 Fed. Reg. 44,468 (July 12, 2023)

(hereinafter the Set Rule).

Petitioners representing two nonprofit conservation

organizations (Environmental Petitioners), many refiners of

petroleum products (Refiner Petitioners), a renewable fuel

producer (Neste), and the Sustainable Advanced Biofuel

Refiners Coalition (SABR), a trade association representing

certain biodiesel stakeholders, filed challenges to the Set Rule.

Only two of those challenges have merit: the Environmental

Petitioners’ claims that (1) EPA failed to adequately explain

why—for purposes of addressing lifecycle greenhouse gas

(GHG) emissions associated with crop-based biofuels—it re-

used the results of an admittedly outdated study instead of

newer data collected from EPA’s literature review of the most

reliable post-2010 findings; and (2) the United States Fish and

Wildlife Service (FWS) failed to adequately explain how its

conclusion that the Set Rule will have “no effect” on

endangered species or their critical habitats accords with the

legal framework set forth in its Consultation Handbook and the

implementing regulations of the Endangered Species Act

(ESA). We therefore grant Environmental Petitioners’ petition

5

only to the extent that we will remand the Set Rule to EPA and

FWS without vacatur for further consideration and explanation.

We deny the petitions of Neste and Refiner Petitioners and

dismiss SABR’s petition for untimeliness and lack of standing.

BACKGROUND

Because of the successive nature of challenges to the RFS

Program, we provide a complete but streamlined explanation

of the statutory scheme for purposes of understanding the

issues in this appeal. Additional background is reflected in

prior decisions involving challenges to the Program.1

A. The Renewable Fuel Standards Program

Congress created the RFS Program by way of the Energy

Policy Act of 2005, codified in Section 211(o) of the CAA (42

U.S.C. § 7545(o)), and further expanded it in the Energy

Independence and Security Act of 2007. Overview of RFS

Program, EPA (last updated May 16, 2024),

https://perma.cc/TV47-8CUQ. The RFS Program “requires an

increasing amount of renewable fuel to be introduced into the

Nation’s transportation fuel supply each year.” Ams. for Clean

Energy v. EPA (ACE), 864 F.3d 691, 696 (D.C. Cir. 2017)

(referencing 42 U.S.C. § 7545(o)). “To accomplish th[is]

goal[], the Program regulates suppliers through ‘applicable

volume[s]’—mandatory and annually increasing quantities of

1

See Nat’l Petrochemical & Refiners Ass’n v. EPA, 630 F.3d 145

(D.C. Cir. 2010); Am. Petroleum Inst. v. EPA, 706 F.3d 474 (D.C.

Cir. 2013); Monroe Energy, LLC v. EPA, 750 F.3d 909 (D.C. Cir.

2014); Ams. for Clean Energy v. EPA, 864 F.3d 691 (D.C. Cir. 2017);

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

2019); Am. Fuel & Petrochemical Mfrs. v. EPA, 937 F.3d 559 (D.C.

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

Wynnewood Refin. Co., LLC v. EPA, 77 F.4th 767 (D.C. Cir. 2023).

6

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

& Petrochemical Mfrs. v. EPA, 937 F.3d 559, 568 (D.C. Cir.

2019) (quoting 42 U.S.C. § 7545(o)(2)(A)(i)). Accordingly,

Congress charged EPA with promulgating regulations to

ensure that each requisite type of fuel introduced into

commerce in the United States satisfies the RFS Program’s

applicable volume requirements. 42 U.S.C. §

7545(o)(2)(A)(i).

“After EPA determines the volume requirements for the

various categories of renewable fuel, it has a ‘statutory

mandate’ to ‘ensure[ ]’ that those requirements are met,” which

it fulfills “by translating the annual volume requirements into

‘percentage standards,’” ACE, 864 F.3d at 698-99 (citations

omitted), i.e. what percentage of the nation’s transportation

fuel must be comprised of each congressionally specified

renewable fuel. “The percentage standards inform each

obligated party of how much renewable fuel it must introduce

into U.S. commerce based on the volumes of fossil-based

gasoline or diesel it imports or produces.” Id. at 699. “Once

EPA issues a rule informing obligated parties . . . of their

renewable fuel obligations, it is up to the obligated parties to

comply with the statute.” Id.

The statute provides EPA latitude to impose “renewable

fuel obligation[s]” on “refineries, blenders, and importers,” as

appropriate. 42 U.S.C. § 7545(o)(3)(B)(ii)(I). EPA has chosen

by rule to impose obligations only on parties that introduce

fossil fuels into the United States economy: refiners and

importers. See Alon Refin. Krotz Springs, Inc. v. EPA, 936 F.3d

628, 648-53 (D.C. Cir. 2019); 40 C.F.R. § 80.2 (designating

obligated parties). Obligated parties must purchase compliance

credits known as Renewable Identification Numbers (RINs)

7

from renewable fuel producers in volumes sufficient to meet

their percentage standard obligations and then prove their

compliance annually by retiring those RINs with EPA. 42

U.S.C. § 7545(o)(5); 40 C.F.R. §§ 80.2, 80.1426, 80.1427(a),

80.1428(b).

The RFS Program establishes volumes for four

congressionally chosen categories of renewable fuel: (1)

cellulosic biofuel; (2) biomass-based diesel; (3) advanced

biofuel; and (4) total renewable fuel. 42 U.S.C.

§ 7545(o)(1)(B), (D), (E), (J). The categories vary in their

renewable biomass sources and their GHG emissions.

According to the CAA, biofuels used to meet RFS Program

obligations must achieve “certain GHG reductions based on a

lifecycle analysis (LCA).” 88 Fed. Reg. at 44,500. Each

category of fuel under the program must reduce GHG

emissions by a certain percentage from the baseline established

by petroleum-based fuels. Id. In general, to qualify as a

renewable fuel under the program, a fuel must be produced

from approved feedstocks and have lifecycle GHG emissions

at least 20 percent less than the baseline. Id. Advanced

biofuels and biomass-based diesel must have at least 50 percent

lower GHG emissions than baseline fuels, “while cellulosic

biofuel is required to have lifecycle emissions at least 60

percent less than baseline fuels.” Id.

The renewable 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.” ACE, 864 F.3d at 697-98. In this regard,

nested RINs satisfy obligations for all categories that include

them. For example, cellulosic biofuel is counted toward its

own volume obligation, the advanced biofuel volume

8

obligation, and the total renewable fuel volume obligation. Id.

at 698.

The statute contains tables that set the annual, nationally

applicable volume requirements for each renewable fuel

category: cellulosic biofuel, advanced biofuel, and total

renewable fuel through the year 2022; and biomass-based

diesel through 2012. 42 U.S.C. § 7545(o)(2)(B)(i). For later

years, Congress gave EPA statutory authority to set applicable

volumes and directed it to base the volume numbers on a

review of the implementation of the program in previous years

and an analysis of the six factors (set criteria) found in 42

U.S.C. § 7545(o)(2)(B)(ii). The set criteria are:

(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, including advanced

biofuels in each category (cellulosic biofuel and

biomass-based diesel);

(IV) the impact of renewable fuels on the

infrastructure of the United States, including

deliverability of materials, goods, and products other

than renewable fuel, and the sufficiency of

infrastructure to deliver and use renewable fuel;

(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

9

(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.

Id. § 7545(o)(2)(B)(ii)(I-VI).

In determining volumes, EPA may reduce the applicable

volumes by issuing waivers. The statute authorizes two waiver

types: (1) a cellulosic waiver allowing reduction of “the

applicable volume of cellulosic biofuel . . . to the projected

volume available during that calendar year” whenever the

projected volume falls short of the volume in the statutory

table, id. § 7545(o)(7)(D)(i); and (2) a general waiver

permitting the reduction of “the national quantity of renewable

fuel required . . . based on a determination . . . that

implementation of the requirement would severely harm the

economy or environment of a State, a region, or the United

States . . . or [that] there is an inadequate domestic supply,” id.

§ 7545(o)(7)(A).

“EPA must meet two different statutory deadlines when

promulgating volume requirements and percentage standards.”

ACE, 864 F.3d at 716. “First, EPA must promulgate all

renewable fuel percentage standards for a given year by

November 30 of the preceding year.” Id. (citing 42 U.S.C.

§ 7545(o)(3)(B)(i)). “Second, EPA must promulgate the

volume requirements for those years not covered by the

statutory tables ‘no later than 14 months before the first year’

for which such volume requirements will apply.” Id. at 716-17

(citing 42 U.S.C. § 7545(o)(2)(B)(ii)). However, EPA may

issue late volume requirements “with retroactive effect so long

as EPA reasonably mitigates any burdens that its lateness

imposes on obligated parties,” id. at 717, “by considering the

‘benefits and the burdens attendant to its approach’ of issuing

10

late renewable fuel requirements,” id. at 718 (quoting Nat’l

Petrochemical & Refiners Ass’n v. EPA, 630 F.3d 145, 166

(D.C. Cir. 2010)).

Congress mandated that EPA determine and publish in the

Federal Register the renewable fuel obligations for the

upcoming calendar year in the form of volume percentages of

transportation fuel sold or imported into the United States. 42

U.S.C. § 7545(o)(2)(B). In essence, if each obligated party

were to include the RFS Program’s percentage requirement of

renewable fuel in the obligated party’s total fuel production,

the volume requirements for the Program would be achieved.

EPA determines the percentage for each of the four renewable

fuel types under the Program by dividing the projected annual

volume of each fuel type by the estimated total of gasoline and

diesel volume that will be used in the upcoming year. 40

C.F.R. § 80.1405(c).

B. The Endangered Species Act

EPA must evaluate the potential impacts of any regulation

stemming from the RFS Program on critical habitats and

entities listed in the ESA. 16 U.S.C. §§ 1531-1544. “Congress

enacted the ESA ‘to provide a means whereby the ecosystems

upon which endangered species and threatened species depend

may be conserved’ . . . ‘to provide a program for the

conservation of such endangered species and threatened

species[]’ . . . [and] to ‘halt and reverse the trend toward species

extinction, whatever the cost.’” Ctr. for Biological Diversity v.

EPA, 861 F.3d 174, 177 (D.C. Cir. 2017) (citations omitted).

Under Section 7 of the ESA, EPA must “insure that any action

authorized, funded, or carried out by [the] agency . . . is not

likely to jeopardize the continued existence of any endangered

species or threatened species or result in the destruction or

adverse modification of habitat of such species.” 16 U.S.C.

11

§ 1536(a)(2). To satisfy this requirement, before taking any

proposed action, EPA consults with FWS and the National

Marine Fisheries Service (NMFS) (together, the Services),

which “share responsibilities for administering the [ESA].” 50

C.F.R. § 402.01(b). “This process, called . . .

‘consultation,’ . . . ‘ensur[es] that such action does not go

forward without full consideration of its effects on listed

species.’” Ctr. for Biological Diversity, 861 F.3d at 177-78

(quoting Lujan v. Defs. of Wildlife, 504 U.S. 555, 603 (1992)).

C. The Set Rule

On July 12, 2023, EPA published the Set Rule that, in

relevant part, (1) announced the volume and percentage

standards of cellulosic biofuel, advanced biofuel, total

renewable fuel, and biomass-based diesel for the years 2023,

2024, and 2025; (2) addressed outstanding volume remaining

from a remand of 2016 annual total renewable fuel volume in

ACE; (3) amended RFS regulatory provisions, including

adjusting the conversion factor for biomass-based diesel; and

(4) clarified recordkeeping provisions for renewable fuel

producers and RIN generation for fuel not used in the United

States.

1.

As a starting point, to determine the volumes for the four

categories of renewable fuel encompassed by the RFS

Program, EPA developed “‘candidate volumes’ for each

category.” 88 Fed. Reg. at 44,480. EPA developed these

candidate volumes (meaning preliminary projected volumes)

by analyzing “a subset of the statutory factors that are most

closely related to supply of and demand for renewable fuel”

(supply-and-demand-related factors), namely production and

use of renewable fuels, the expected annual rate of future

commercial production of renewable fuels, and the sufficiency

12

of infrastructure to deliver and use renewable fuel. Id. In

developing candidate volumes, EPA also considered the

historical supply of renewable fuel.

To assess the effects of the candidate volumes, EPA

established a baseline of renewable fuel volumes EPA

projected would be produced in a scenario in which the Set

Rule did not exist. EPA then used the candidate volumes to

conduct analyses of the other environmental and economic

factors under the remaining statutory factors not yet

considered. Based on the results of these analyses, EPA

determined the final volume requirements for the four

categories for the years 2023, 2024, and 2025. Below is a table

summarizing the final renewable fuel volume targets (in

billions of RINs) issued by EPA in the Set Rule.

88 Fed. Reg. at 44,470. EPA also conveyed the percentage

standards for the years 2023, 2024, and 2025.

13

Id. at 44,471.

2.

In the Set Rule, EPA completed the process of addressing

our remand in ACE of the 2014, 2015, and 2016 annual

volumes. As to those volumes, EPA had originally relied on

the general waiver authority for inadequate domestic supply to

lower the 2016 total renewable fuel volume by 500 million

gallons. See RFS Program: Standards for 2014, 2015, and 2016

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

77,420, 77,433 (Dec. 14, 2015). In ACE, we held that “EPA

exceeded its authority under the ‘inadequate domestic supply’

provision,” “vacate[d] EPA’s decision . . . and remand[ed] . . .

for further consideration.” 864 F.3d at 703. To address the

ACE remand, EPA “impose[d] a 500-million-gallon

supplemental volume requirement for renewable fuel over two

years.” 88 Fed. Reg. at 44,509. EPA “required the first 250-

million-gallon supplement in 2022,” id., which we recently

upheld. See Sinclair Wyo. I, 101 F.4th at 893-96. In the Set

Rule at issue here, EPA mandated compliance with the second

250-million-gallon supplement. 88 Fed. Reg. at 44,509.

3.

Pursuant to its statutory mandate under 16 U.S.C. § 1536,

EPA engaged in informal consultation with the Services

regarding the Set Rule. In the first half of 2023, EPA provided

a Biological Evaluation and supportive documentation as part

of its informal consultation with the Services. In its Biological

Evaluation, “EPA . . . determined that the production of crop-

based feedstocks ha[d] the potential to affect endangered and

threatened species . . . and critical habitat by contributing to

land use changes that could . . . lead to habitat loss or water

quality impairments via runoff from agricultural lands.” EPA

Biological Evaluation at 6 (J.A. 1025). Therefore, as a result

14

of the Set Rule, consultation was necessary because species or

habitats could be affected “where crops of corn, soybean, and

canola are currently grown in the U.S. and . . . downstream

areas could be impacted by agricultural runoff and pollution

from such crop areas.” EPA Biological Evaluation at 6 (J.A.

1025). “EPA found that the Set Rule action area overlaps with

a total of 712 unique species: 672 FWS species, 32 NMFS

species, and 8 that are both FWS and NMFS species . . . [a]nd

. . . a total of 810 populations [we]re evaluated in th[e]

Biological Evaluation.” EPA Biological Evaluation at 6 (J.A.

1025). Ultimately, EPA determined “that the Set Rule may

affect, but is not likely to adversely affect . . . any of the 810

populations within the Set Rule action area or their critical

habitat.” EPA Biological Evaluation at 13 (J.A. 1032).

In its Set Rule concurrence letter expressing agreement

with EPA’s determination, the National Marine Fisheries

Service observed that “[t]he applicable standard to find that a

proposed action is not likely to adversely affect ESA-listed

species or designated critical habitat is whether the effects to

listed species and critical habitat are expected to be

discountable, insignificant, or completely beneficial.” NMFS

Concurrence at 9 (J.A. 2050). Based on its analysis of available

information regarding changes in crop production and water

quality, NMFS concurred “with EPA that the effects of [the Set

Rule] may affect, but are not likely to adversely affect the ESA-

listed and proposed species and/or designated and proposed

critical habitats.” NMFS Concurrence at 25 (J.A. 2066).

The Fish and Wildlife Service took a different approach.

In its response to EPA’s request for concurrence, FWS asserted

that, according to the ESA Section 7 Consultation Handbook,

“a ‘may affect’ determination is appropriate when ‘a proposed

action may pose any effects on listed species or critical

habitat.’” FWS Concurrence at 2 (J.A. 2069). However,

15

“[b]ecause there [we]re no general environmental changes

identified in the [Biological Evaluation] that would not occur

but for EPA’s action and that are reasonably certain to occur,”

FWS concluded “that the Set Rule will not result in any ‘effects

of the action,’ and a determination of ‘no effect’ [wa]s

appropriate.” FWS Concurrence at 2 (J.A. 2069). Having

concluded that the Set Rule would have no effect, FWS

concurred with “EPA’s finding that the Set Rule is not likely to

adversely affect ESA-listed species or designated critical

habitats.” FWS Concurrence at 9 (J.A. 2076).

4.

In the Set Rule, EPA acknowledged its adoption of

specified regulatory changes to improve the RFS Program.

First, EPA revised the conversion factor used in the calculation

of applicable biomass-based diesel percentage standards from

1.5 to 1.6 to reflect the increasing volume of renewable diesel

in the biomass-based diesel pool. 88 Fed. Reg. at 44,546-47.

Next, EPA addressed RIN generation by revising 40 C.F.R.

§ 80.1426 to specify that “renewable fuel producers and

importers may only generate RINs . . . for qualifying renewable

fuel.” Id. at 44,547. Finally, EPA addressed the generation

and maintenance of records for waste feedstocks by “providing

an option to allow independent auditors to verify records held

by the feedstock aggregator,” id. at 44,548.

D. Petitioners

Various petitioners challenge the Set Rule. Environmental

Petitioners are advocacy organizations. Refiner Petitioners are

(or represent) refiners and retailers of petroleum products

subject to the Set Rule’s volume requirements. “Neste is a

foreign producer of renewable fuel that generates RINs under

the RFS [P]rogram.” Neste Br. 4. SABR is a trade association

of stakeholders in biodiesel, and includes “feedstock growers

16

to biodiesel producers, distributors, retailers, and consumers,

as well as infrastructure, products, and services suppliers.”

SABR Br. C-4.

Intervenors also filed briefs. Two of the Refiner

Petitioners—American Petroleum Institute and American Fuel

& Petrochemical Manufacturers—intervened to oppose

SABR’s petition. Several Biofuel Intervenors filed in support

of the Set Rule and in opposition to the petitions for review

filed by the Refiner Petitioners and the Environmental

Petitioners.2

E. Jurisdiction and Standards of Review

This Court has jurisdiction to review EPA’s Set Rule

pursuant to 42 U.S.C. § 7607(b)(1). Because “we apply the

same standard of review under the [CAA] as we do under the

Administrative Procedure Act,” Allied Loc. & Reg’l Mfrs.

Caucus v. EPA, 215 F.3d 61, 68 (D.C. Cir. 2000), we will

uphold EPA’s action unless it is “arbitrary, capricious, an abuse

of discretion, or otherwise not in accordance with law . . . .” 42

U.S.C. § 7607(d)(9)(A). Our review is narrow; if an action is

not contrary to law, “agency action simply [must] be

‘reasonable and reasonably explained.’” Cmtys. for a Better

Env’t v. EPA, 748 F.3d 333, 335 (D.C. Cir. 2014) (citation

omitted). EPA is required to “examine the relevant data and

articulate a satisfactory explanation for its action including a

‘rational connection between the facts found and the choice

made.’” Motor Vehicle Mfrs. Ass’n of U.S., Inc. v. State Farm

Mut. Auto. Ins. Co., 463 U.S. 29, 43 (1983) (citation omitted).

2

Coalition for Renewable Natural Gas did not join the other Biofuel

Intervenors in opposing the Environmental Petitioners’ petition for

review.

17

An EPA rule is arbitrary and capricious if:

[T]he agency (1) ‘has relied on factors which

Congress has not intended it to consider,’ (2) ‘entirely

failed to consider an important aspect of the problem,’

(3) ‘offered an explanation for its decision that runs

counter to the evidence before the agency,’ or (4) ‘is

so implausible that it could not be ascribed to a

difference in view or the product of agency expertise.’

U.S. Sugar Corp. v. EPA, 830 F.3d 579, 606 (D.C. Cir. 2016)

(quoting Motor Vehicle Mfrs. Ass’n, 463 U.S. at 43). The Court

“owes particular deference to EPA when its rulemakings rest

upon matters of scientific and statistical judgment within [its]

sphere of special competence and statutory jurisdiction.” Id.

(citation omitted). But the Court is “hesitant to rubber-stamp

EPA’s invocation of statistics without some explanation of the

underlying principles or reasons why its formulas would

produce an accurate result.” Id. (citation omitted). Moreover,

if an agency changes positions, it must “display awareness that

it is changing position.” FCC v. Fox Television Stations, Inc.,

556 U.S. 502, 515 (2009) (emphasis in original). Thus, an

agency “may not, for example, depart from a prior policy sub

silentio.” Id.

DISCUSSION

We discuss the challenges in the following order:

Environmental Petitioners, Refiner Petitioners, Neste, and

SABR.

I. Environmental Petitioners

The Environmental Petitioners challenge the volumes

established in the Set Rule as contrary to the CAA and the ESA.

18

They claim that EPA’s statutorily mandated analysis of the

effects of the Set Rule on climate change was inadequate, and

that deficient ESA compliance by EPA, the NMFS and the

FWS will harm listed species or critical habitat. We address

the various claims advanced under each statute in turn,

ultimately concluding that EPA’s analysis of the effects of the

Set Rule on climate change under the CAA was arbitrary and

capricious and that, while NMFS adequately complied, FWS’s

concurrence with EPA as to the effects of the Set Rule on

endangered species under the ESA rests on arbitrary and

capricious analysis. We remand to EPA and FWS for further

explanation without vacating the Set Rule’s volumes.

A. Clean Air Act

The Environmental Petitioners challenge the volumes in

the Set Rule under the CAA and the Administrative Procedure

Act (APA). They claim that EPA’s weighing of the statutorily

required factors was arbitrary and capricious, as was its

analysis of the Set Rule’s effects on climate change. Only the

latter challenge succeeds.

1.

The CAA requires EPA to set volumes based on “a review

of the implementation of the [RFS Program]” in prior years and

an analysis of six factors. 42 U.S.C. § 7545(o)(2)(B)(ii).

Those statutory factors are: (1) the impact of the production and

use of renewable fuels on the environment; (2) the impact of

renewable fuels on the United States’ energy security; (3) the

expected annual rate of future commercial production of

renewable fuels; (4) the impact of renewable fuels on the

infrastructure of the United States; (5) the impact of renewable

fuels on the cost to consumers of fuel and on the cost to

transport goods; and (6) the impact of renewable fuels on other

factors, including job creation, the price and supply of

19

agricultural commodities, rural economic development, and

food prices. Id. As part of its analysis of those statutorily

required factors, EPA considered the effect of the Set Rule on

environmental justice, which EPA defines as “the fair

treatment and meaningful involvement of all people regardless

of race, color, national origin, or income with respect to the

development, implementation, and enforcement of

environmental laws, regulations, and policies.” 88 Fed. Reg.

at 44,506.

The Environmental Petitioners argue that EPA gave short

shrift to the Set Rule’s harms to the environment, communities

that manifest environmental justice concerns, and consumers.

The Environmental Petitioners acknowledge that EPA

considered those harms but maintain that they are so grave

compared to the potential benefits of the Rule that EPA failed

to justify its decision to “finalize volumes that lead to such an

imbalance in positive to negative impacts.” Env’t Pet. Br. 38.

In their view, the severity of those harms requires vacatur of

the volumes the Set Rule established for crop-based renewable

fuels.

Our dissenting colleague would vacate the volumes for

distinct but related reasons. He contends that EPA has failed

to explain how the costs associated with the program are

justified by countervailing benefits and accordingly has not

fulfilled its duty to select volumes “based on” an analysis of the

six statutory factors. See post at 7-8. On the partial dissent’s

reading, the large discrepancy between the monetized costs and

benefits of the Rule further magnifies EPA’s error and renders

its decision arbitrary and capricious. Id. at 9-10.

We reject those arguments for two reasons. First, EPA did

more than merely acknowledge those harms. It rationally

explained why its balancing of the potential harms and benefits

20

associated with the Set Rule supported the volumes it

established. Specifically, EPA used a subset of the factors most

closely related to the supply and demand for renewable fuels to

identify candidate volumes (i.e. preliminary projected

volumes) for the relevant renewable fuel categories. See 88

Fed. Reg. at 44,480. It then analyzed the effect of those

candidate volumes on the other statutorily required

environmental and economic factors to arrive at final volumes.

Id.

EPA’s process for setting cellulosic biofuel volumes

illustrates that process. EPA established its candidate volumes

for cellulosic biofuel based on its analysis of projected growth

in cellulosic biofuel production and constraints on

consumption (e.g., vehicle compatibility). Id. at 44,512; Regul.

Impact Analysis (RIA) at 277-95 (J.A. 1585-1604).

Considering the effects of that volume on the other statutory

factors, EPA found that cellulosic biofuel’s impact on the

environment is broadly positive because it emits significantly

fewer greenhouse gases than fossil fuels and its feedstocks are

largely waste or byproducts that do not require dedicating

farmland acreage to its production. 88 Fed. Reg. at 44,512.

And, because cellulosic biofuel largely uses waste or byproduct

feedstocks, EPA found its impact on several other statutory

factors like the price and supply of agricultural commodities

and food prices to be minimal. Id. But EPA found that

cellulosic biofuel’s impact on transportation fuel costs to

consumers is relatively high—adding as much as 2 cents per

gallon to the price of gasoline and diesel. Id. at 44,513; RIA at

44 (J.A. 1352).

Based on its balancing of all the factors, EPA ultimately

decided to set final volumes for cellulosic biofuel at the

candidate levels it had projected. 88 Fed. Reg. at 44,513. EPA

similarly analyzed each of the other statutory renewable fuel

21

categories. By using available data bearing on the statutory

supply-side factors to develop preliminary candidate volumes,

then balancing all the statutory factors before setting final

volumes, EPA fulfilled its statutory obligation for each

category of renewable fuel. Id. at 44,512-18.

Our dissenting colleague takes issue with EPA’s approach

because of its outcome. In his view, that the Set Rule’s final

volumes largely tracked candidate volumes means EPA gave

too much weight to the “subset of statutory factors” that it used

to determine the candidate volumes and merely “report[ed] the

various high economic and environmental costs” the statute

also requires it to analyze. Post at 7. But that is not what EPA

did. As the cellulosic biofuel example demonstrates, EPA

analyzed those economic and environmental considerations,

reasonably found that the benefits outweighed the costs, and so

decided to set the final volumes at candidate volume levels.

See 88 Fed. Reg. at 44,513. And to the extent that implies EPA

gave greater weight to the supply-related factors it used to set

candidate volumes, that choice was well within its

“considerable discretion to weigh and balance the various

factors required by statute.” Sinclair Wyo. I, 101 F.4th at 887

(citation and internal quotation marks omitted).

Second, the Environmental Petitioners’ (and our

dissenting colleague’s) argument that EPA should have set

lower volumes because of the purported imbalance between the

positive and negative impacts of the Set Rule fundamentally

misunderstands the statute. In Sinclair Wyoming I, we

considered an identical challenge brought by refiners to an RFS

Program Rule asserting that the rule would drive up

compliance costs and GHG emissions. The refiners argued

EPA’s failure to reconcile the “vast disparity” between the

monetized costs and monetized benefits of the Rule rendered

the volumes it set arbitrary and capricious. 101 F.4th at 888-

22

89. A key reason we rejected that argument was that “the

statute does not state what weight should be accorded to the

relevant factors,” and so “we give EPA considerable discretion

to weigh and balance the various factors required by statute.”

Id. at 887 (citation and internal quotation marks omitted).

The same reasoning applies here: The text of the CAA

does not require EPA to monetize or otherwise quantify all of

the factors it must consider, nor to conduct a cost-benefit

analysis to set volumes. Instead, the Act states that EPA “shall

. . . determine[]” those volumes “based on a review of the

implementation of the program” in past years and “an analysis”

of six other statutory factors. 42 U.S.C. § 7545(o)(2)(B)(ii).

Contrary to our dissenting colleague’s characterization, those

factors are not “categories of cost.” Post at 8. In fact, only one

of those factors—the impact of renewable fuels on the cost to

consumers of transportation fuel and on the cost to transport

goods—explicitly requires EPA to analyze monetary costs. Id.

§ 7545(o)(2)(B)(ii)(V). EPA undertook that analysis,

estimating that the Set Rule would impose significant fuel costs

on consumers between 2023 and 2025. 88 Fed. Reg. at 44,506.

But, as we have previously noted, Congress in the RFS

Program “made a policy choice to accept higher fuel prices” in

exchange for the benefits of energy security and reduced GHG

emissions. Sinclair Wyo. I, 101 F.4th at 889.

Nothing in the Act or precedent supports a freestanding

requirement that EPA balance the quantifiable costs and

benefits of the volumes it sets, let alone that EPA may

implement the RFS Program only insofar as its benefits—

quantified or not—outweigh its costs. Indeed, in National

Association of Home Builders v. EPA, 682 F.3d 1032 (D.C. Cir.

2012), we rejected a similar argument under a kindred

provision of the Toxic Substances Control Act (TSCA). The

Home Builders contended that TSCA imposed a duty on EPA

23

to demonstrate that the benefits of a rule promulgated under the

Act outweighed its costs. Id. at 1039. We noted that while the

TSCA requires EPA to “consider,” among other factors, the

“economic consequences” of action taken pursuant to the

statute—it does not require a cost-benefit analysis. Id. EPA

had nonetheless opted to do a cost-benefit analysis, which we

accordingly reviewed and sustained as reasonable. Id. at 1039-

41; see also Nat’l Wildlife Fed’n v. EPA, 286 F.3d 554, 570-71

(D.C. Cir. 2002) (per curiam). And those cases are fully

consistent with the Supreme Court’s decision in Michigan v.

EPA, 576 U.S. 743 (2015). There, the Court held that while

EPA had to “consider cost . . . before deciding whether

regulation is appropriate and necessary,” id. at 759, it did not

need to conduct “a formal cost-benefit analysis” because it was

“up to the Agency to decide . . . how to account for cost.” Id.

Thus, contrary to the Environmental Petitioners’ and the

partial dissent’s assertion, it does not matter that the monetized

benefits of the Rule may be less than its monetized costs. What

matters is whether EPA acted in a reasonable, non-arbitrary

manner in setting volumes based on its review of the prior

implementation of the program and its consideration of the

statutorily required factors. EPA did so. Its decision to set the

challenged volumes was reasonable and reasonably explained.

2.

Separately, the Environmental Petitioners argue that

EPA’s analysis of the effect of the Set Rule on climate change

was arbitrary and capricious. The statute requires EPA to

analyze the “impact of the production and use of renewable

fuels on the environment, including on . . . climate change.” 42

U.S.C. § 7545(o)(2)(B)(ii)(I). The mandatory climate analysis

is “related to, but distinct from” EPA’s duty to ensure that

specific renewable fuels satisfy minimum GHG emission

24

reduction targets mandated by the CAA. 88 Fed. Reg. at

44,500-01; see also 42 U.S.C. § 7545(o)(2)(A)(i) (requiring the

various renewable fuels produced from new facilities to

achieve a minimum of 20-60 percent reductions in emissions

compared to baseline). The Environmental Petitioners advance

three reasons why they believe EPA’s analysis was arbitrary

and capricious. On our independent review, we reject two but

conclude that one of them has merit: EPA disregarded the

results of its own literature review without adequate

explanation. We turn first to that meritorious challenge.

a.

The Environmental Petitioners take issue with EPA’s

review of the latest scientific literature estimating the quantity

of GHG emissions attributable to renewable fuels and EPA’s

ensuing analysis of the effects of the Set Rule on climate

change. The review identified a wide range of estimates for

each renewable fuel depending on what assumptions and

analyses each study used. For example, one study yielded what

turned out to be the low-end estimate within the literature that

corn-based ethanol emits 38 grams of carbon dioxide per

megajoule of energy generated (gCO2e/MJ), while another

study yielded a high-end estimate that it emits 116 gCO2e/MJ.

88 Fed. Reg. at 44,501 (Table IV.A–1). In comparison, studies

estimate that petroleum gasoline emits between 84 and 98

gCO2e/MJ.

EPA made inconsistent use of the data it culled from the

literature. It used the high-end and low-end estimate of each

range reflected in the literature to construct worst-case and

best-case scenarios, respectively, for the effects of the Set Rule

on GHG emissions over a thirty-year period relative to a

baseline scenario that assumed the Set Rule did not exist. RIA

at 164-66 (J.A. 1472-74). But for crop-based renewable fuels

25

like corn-based ethanol and soybean oil-based biodiesel, EPA

did not use the ranges derived from the literature review. For

only that subset of renewables, EPA turned back to (lower)

figures it drew from a study it had conducted in 2010 to identify

renewable fuels that met the Clean Air Act’s GHG emission

reduction targets. RIA at 161-62 (J.A. 1469-70). The

Environmental Petitioners argue that EPA never reasonably

explained why it used the results of the literature review to

construct its estimates on some of the effects of the Set Rule

but not others.

We agree. EPA has failed to justify its climate conclusions

regarding the GHG emission reductions attributable to the Set

Rule. To be clear, EPA’s use of ranges derived from credible

publications like peer-reviewed journal articles and

government reports to make projections was not, by itself,

objectionable. EPA explained that, because “all [lifecycle

emissions] studies and models have particular strengths and

weaknesses, as well as uncertainties and limitations,” its goal

for the literature review was “to consider the ranges of

published estimates, not to adjudicate which particular studies,

estimates or assumptions are most appropriate.” 88 Fed. Reg.

at 44,500. But EPA’s unexplained decision to generally rely

on those published estimates for every other fuel category and

to disregard them for crop-based renewable fuels in favor of

ranges derived from its dated 2010 study was arbitrary and

capricious.

To begin with, that decision to rely on a nearly 15-year-

old study is inconsistent with EPA’s acknowledgement that the

modeling framework “EPA ha[d] previously relied upon”—

primarily, the results of the 2010 study—to analyze the effects

of renewable fuels on climate change “is old” and newer data

and research is now available. 88 Fed. Reg. at 44,501.

26

That decision also was not reasonably explained. EPA

stated that it used the results of the 2010 study because it was

the “only study identified in [the literature review]

that . . . report[s] an annual stream of land use change

emissions.” RIA at 161 (J.A. 1469). Land use change

emissions are those GHG emissions attributable to growing

crops as feedstocks for renewable fuels on land that was

previously not used for that purpose. According to EPA, an

annual stream is important to calculating emission changes

from crop-based biofuels over a thirty-year period because the

initial conversion of land to grow the needed crops leads to

relatively high emissions at the start of the period, when the

land is converted, but lower emissions over the long term once

the conversion is complete. RIA at 129 (J.A. 1437). EPA

contends that the studies in the literature review systematically

overestimate GHG emissions attributable to crop-based

renewable fuels. RIA at 161 (J.A. 1469). According to EPA,

“an annual stream of land use change emissions” over a period

of years is required for accurate estimation of GHG effects, and

“[t]he only study identified in our review that does report an

annual stream of land use change emissions is the analysis for

the 2010 RFS2 rule.” RIA at 161 (J.A. 1469).

There are two problems with EPA’s explanation. First,

EPA’s statement that the 2010 study was the “only” one to

report an annual stream of land use change emissions

contradicts its statement on the same page that “[t]he majority

of the land use change GHG estimates in the literature”—i.e.

not all of them—“do not report an annual stream.” RIA at 161

(J.A. 1469) (emphasis added). EPA clearly implies that some

minority of the studies EPA considered did in fact report annual

streams of emissions associated with land use change.

Second, EPA asserts that it was justified in using the

substantially lower emissions estimates from its 2010 RFS

27

study for corn-based ethanol and soybean-based renewable

fuels in lieu of the aggregate range of estimates from its

literature review because the latter systematically

overestimated GHG emissions from land use changes. But that

assertion of systemic skew is contradicted by EPA’s own

figures showing that GHG emissions estimates drawn from the

literature review were effectively identical to those included in

the 2010 study for all crop-based renewable fuel—except corn-

based ethanol. Compare RIA at 161 (J.A. 1469) (charting

ranges based on the literature review), with RIA at 162 (J.A.

1470) (charting virtually identical ranges based on the 2010

RFS2 rule for soybean-based renewable fuels). The 2010

study’s high-end emissions estimate for soybean oil-based

biodiesel was only slightly lower—72 gCO2e/MJ rather than

73—and the high-end estimate for soybean oil-based

renewable diesel remained unchanged when the 2010 study’s

results were used. RIA at 161-62 (J.A. 1469-70). Only for

corn-based ethanol was there a significant difference: In

contrast to the high-end emissions estimate of 116 gCO2e/MJ

for corn-based ethanol from the updated literature review, the

high-end emissions estimate from the 2010 study was only 91

gCO2e/MJ—more than 20 per cent lower. RIA at 161-62 (J.A.

1469-70).

That substantial, unexplained discrepancy is particularly

problematic for EPA because it plays an outsized role in the

program overall. Corn-based ethanol is by volume the largest

category of renewable fuel produced in the United States—and

it drives the largest aggregate portion of GHG emissions

attributable to renewable fuels. If EPA improperly relied on a

lower high-end emission estimate for corn-based ethanol, it

lacks support for its climate conclusion that “on average [corn-

based ethanol] provides some GHG reduction in comparison to

gasoline.” 88 Fed. Reg. at 44,517. And that unsupported

28

conclusion potentially skewed EPA’s ultimate assessment of

the various factors and the volumes EPA set.

Accordingly, we hold that EPA failed to articulate a

“rational connection between the facts found and the choice

made” to use the results of the 2010 study, which, absent

further explanation, renders its climate change analysis

arbitrary. Motor Vehicle Mfrs. Ass’n, 463 U.S. at 43 (internal

quotation marks omitted). EPA placed significant weight on

its climate conclusions in establishing the implied conventional

renewable fuel volume requirement. If EPA cannot justify its

use of the results of the 2010 study on remand, it will need to

explain how other, appropriate data affect its climate

conclusions, whether properly supported climate conclusions

change EPA’s assessment of the statutory factors, and whether

its updated analysis justifies the volumes it set.

b.

Second, the Environmental Petitioners fault EPA for not

using the results of the model comparison exercise EPA

conducted to evaluate the Set Rule’s climate change effects.

The model comparison exercise studied five different models

that estimate the effects of crop-based renewable fuel

production and consumption on global GHG emissions by

running hypothetical scenarios involving major increases in

renewable fuel production through the models and comparing

the results. See 88 Fed. Reg. at 44,501-02. Two of those

models estimated that an increase in global demand for

soybean oil-based biodiesel would lead to a net increase in

GHG emissions, while one estimated a decrease. Model

Comparison Exercise Tech. Document at 113 (J.A. 1993). The

Environmental Petitioners argue that because the model

outputs are based on a common set of hypothetical scenarios

about renewable fuel production, the model comparison

29

exercise, and not the literature review, is “the best evidence”

concerning the Set Rule’s effect on climate change. Env’t Pet.

Br. 30.

But this argument misunderstands the purpose of the

model comparison exercise. In its Notice of Proposed

Rulemaking, EPA stated that it was conducting the exercise to

better understand the capabilities of various models and to

locate the underlying reasons model estimates differ, not to

produce a “single robust estimate of the [GHG] impacts

associated with the volume requirements.” RFS Program:

Standards for 2023-2025 and Other Changes, 87 Fed. Reg.

80,582, 80,611 (proposed Dec. 30, 2022). And EPA ultimately

decided not to rely on the exercise’s results to inform final

volumes because it wanted to “engage with stakeholders and

receive feedback . . . before deciding how to use any results in

a rulemaking context.” 88 Fed. Reg. at 44,501. That was

because it found that the models had differing underlying

assumptions and degrees of flexibility that produced

fundamentally different analyses, underscoring the need for

further study before EPA could use the models to estimate the

effects of the Set Rule. For current purposes, EPA simply

noted that insights derived from the model comparison exercise

would inform its “future analytical efforts” to assess the effect

of the RFS Program on climate change. Id. Given EPA’s

acknowledgement that its previous approach is outdated, these

new efforts are welcome.

In the meantime, we do not fault EPA for choosing not to

use the results of the model comparison exercise to evaluate the

Rule’s climate effects. We give an “extreme degree of

deference” to the “evaluation of scientific data within [EPA’s]

technical expertise,” Sinclair Wyo. I, 101 F.4th at 883 (internal

quotation marks omitted), including the agency’s assessment

that more research on analytical tools like these climate change

30

models is needed before they are more broadly deployed.

Accordingly, we hold that EPA’s decision not to use the results

of the model comparison exercise to evaluate the effects of the

Set Rule on climate change was reasonable and reasonably

explained.

c.

Third, the Environmental Petitioners argue that EPA erred

in not including the “carbon opportunity cost” of renewable

fuel production in its analysis of the effects of the Set Rule on

climate change. Env’t Pet. Br. 31-32. The carbon opportunity

cost of renewable fuel production refers to a calculation of the

difference between the climate benefits of using land to grow

crops for renewable fuel and hypothetical uses of the same land

in other ways potentially more beneficial to the climate. One

of those possible uses would be to let land lie fallow to

regenerate native vegetation, which sequesters carbon dioxide.

The Environmental Petitioners extrapolate from that possibility

that the CAA’s requirement that EPA consider “the impact of

the production and use of renewable fuels on the environment,”

42 U.S.C. § 7545(o)(2)(B)(ii)(I), obligates the agency to

compute how much carbon dioxide the land could sequester if,

rather than producing crops for renewable fuels, it were

allowed to revert to native vegetation. By not incorporating

such a computation into its analysis, the Environmental

Petitioners contend, EPA missed a “significant climate change

impact of land use” related to renewable fuels. Env’t Pet. Br.

32.

That argument centrally relies on the flawed assumption

that, in the absence of the Set Rule, farmers would repurpose

land from growing renewable fuel feedstocks to lying fallow

and regenerating native vegetation. But the Act empowers

EPA to set volumes for renewable fuels that obligated parties

31

must meet; it does not authorize the agency to control farmers’

land use decisions. And any assumption that land not used for

renewable fuels will necessarily lie fallow or be devoted to

regenerating native flora is questionable as a factual matter.

Experience shows that land no longer used to grow crops is

often sold for commercial or residential development.

EPA accordingly set aside the only study in the literature

that attempted to incorporate a carbon opportunity cost into its

analysis because it assumed forest regeneration as the

alternative land use. EPA instead assumed, consistent with the

bulk of the empirical literature, that absent the Set Rule land

would be used in a “business as usual” fashion—which is to

say, as it was used before the Set Rule came into effect. RIA

at 138 n.241 (J.A. 1446 n.241). We therefore hold that EPA’s

decision not to adopt the Environmental Petitioners’ preferred

analysis of carbon opportunity cost effects of the Set Rule on

climate change was reasonable and reasonably explained.

***

In response to the Environmental Petitioners’ claims, we

hold that EPA’s climate change analysis under the CAA was

arbitrary and capricious for its failure to adequately explain

why it used a nearly 15-year-old study to estimate the effect of

crop-based renewable fuel production on GHG emissions

rather than the updated literature review it had conducted for

expressly that purpose and used to estimate effects of other

types of renewable fuels. We reject the Environmental

Petitioners’ other challenges to the Set Rule under the CAA and

APA.

B. Endangered Species Act

Separately, the Environmental Petitioners challenge the

compliance of EPA, NMFS, and FWS with the ESA and its

32

implementing regulations. They argue that each of those

entities acted arbitrarily and capriciously—and in the case of

FWS, contrary to the statute—in determining that the Set Rule

was not likely to adversely affect endangered species or their

critical habitats. We grant the Environmental Petitioners’

petition with respect to FWS, concluding that its concurrence

was arbitrary and capricious. We reject all the other ESA

challenges.

Section 7 of the ESA imposes a duty on federal agencies

to prevent harm to endangered wildlife and flora, reflecting a

“conscious decision by Congress to give endangered species

priority over the ‘primary missions’ of federal agencies.”

Tenn. Valley Auth. v. Hill, 437 U.S. 153, 185 (1978).

Specifically, under Section 7(a)(2), each federal agency “shall

. . . insure that any action . . . is not likely to jeopardize the

continued existence of any endangered species or threatened

species or result in the destruction or adverse modification of

[critical] habitat of such species.” 16 U.S.C. § 1536(a)(2). To

ensure compliance with that statutory mandate, the ESA’s

implementing regulations require each federal agency to

determine whether its proposed action “may affect listed

species or critical habitat.” 50 C.F.R. § 402.14(a). If so, the

agency must engage in formal consultation with NMFS and

FWS (collectively, the Services) as to the potential effects of

its proposed action on the endangered species or their critical

habitats under each Service’s jurisdiction and discuss steps the

agency can take to mitigate harm. Id. § 402.14(g).

After the agency determines that its action “may affect”

endangered species or their critical habitats, the factual record

may nonetheless support a determination that the agency’s

action “is not likely to adversely affect any listed species or

critical habitat.” Id. § 402.14(b)(1). If the agency so determines

and the Services concur with that assessment, formal

33

consultation is not required. Id. In ESA parlance, those

sequential determinations are referred to as “may affect” (as

opposed to “no effect”) and “is not likely to adversely affect”

determinations. The criteria for making those determinations

are set forth in two separate sets of regulatory materials.

The Services’ joint Endangered Species Consultation

Handbook (Handbook) establishes the procedures for the

Services’ consultations with federal agencies pursuant to ESA

Section 7. It states that a “may affect” determination is

appropriate when a proposed agency action “may pose any

effects on listed species or designated critical habitat.”

Handbook at xvi (J.A. 2127) (emphasis in original).

Conversely, it states that a “no effect” determination is

appropriate when a proposed agency action will not affect a

listed species or designated critical habitat. Finally, it states

that a determination that the agency action “is not likely to

adversely affect” listed species or critical habitat is appropriate

when effects have been identified, but they “are expected to be

discountable, insignificant, or completely beneficial.”

Handbook at xv (J.A. 2126). An identified but “discountable”

effect is one that is “extremely unlikely to occur.” Id. at xvi

(J.A. 2127). An “insignificant” effect is one that the agency

identified but would not “be able to meaningfully measure,

detect, or evaluate.” Handbook at xvi (J.A. 2127).

Separately, the ESA’s implementing regulations define the

“effect” of an agency action as “all consequences to listed

species or critical habitat that are caused by the proposed

action.” 50 C.F.R. § 402.02(d). That regulation lists two

criteria that together identify when a consequence is caused by

an agency action (and thus counts as an “effect” under the

ESA): A consequence is a cognizable effect of an agency

action when (1) the agency action is the “but for” cause of the

34

consequence; and (2) the consequence is “reasonably certain to

occur.” Id.

How to reconcile the apparent tension between the

definition of “effect” in the regulations (reasonably certain

effect of which the federal action is a but-for cause) and the

definition of a “may affect” determination in the Handbook

(the federal action may pose any effect) is not discussed in

either source.

1.

The Environmental Petitioners first argue that EPA’s

determination in its Biological Evaluation that the Set Rule

“may affect” but is “not likely to adversely affect” endangered

species or their critical habitats was arbitrary and capricious for

two reasons. Neither has merit.

In its Biological Evaluation, EPA determined that the Set

Rule may affect endangered species or their critical habitats if

they induce the conversion of critical habitat into farmland to

grow crops (corn, soybeans, and canola) for renewable fuels,

which could also impair water quality by increasing fertilizer

and pesticide runoff into nearby waterways. As part of its

estimation of the magnitude of the Set Rule’s effects, EPA

predicted how many acres of land the Rule would cause to be

newly converted to grow crops for renewable fuels. To make

that prediction, EPA extrapolated from recent studies

evaluating the effect of renewable fuel production on the

conversion of land to farmland. And, to predict where land

conversion was likely to occur, EPA used data-based models

that allocate the anticipated increased cropland acreage across

the United States. By overlaying the predicted locations of

land conversions onto the habitat ranges of endangered species,

EPA generated a list of those endangered species that could be

35

affected by the Set Rule and estimated how much of their

habitat was at risk of conversion.

The Environmental Petitioners first claim that EPA set the

wrong environmental baseline against which to measure the

effects of the Set Rule on endangered species or their critical

habitats. They argue that, rather than calculating incremental

land conversion as EPA did by comparing the effects of the Set

Rule to a hypothetical circumstance in which the Set Rule did

not go into effect, EPA should have compared the effects of the

Set Rule to a hypothetical circumstance in which the entire RFS

Program, from 2007 onward, never existed. Env’t Pet. Br. 18.

They defend that baseline by pointing out that “EPA had full

statutory discretion to set volumes for corn and soy[beans] at

zero.” Id. In the Environmental Petitioners’ view, using their

preferred baseline would have forced EPA to reckon with the

cumulative environmental effects of all previous rules

promulgated since the RFS Program’s inception for which EPA

did not comply with its ESA obligations.

It is true that EPA has generally failed to comply with its

ESA obligations in previous RFS Program rulemakings. In

American Fuel & Petrochemical Manufacturers v. EPA, for

example, we held that EPA’s failure to make an effects

determination as to the 2018 RFS Rule violated the ESA. 937

F.3d at 597-98. And in Growth Energy v. EPA, 5 F.4th 1 (D.C.

Cir. 2021), we held that EPA’s determination that its 2019 RFS

Rule would have “no effect” on endangered species or their

critical habitats was arbitrary and capricious. Id. at 32.

But the fact that the Set Rule represents EPA’s first full

attempt to comply with its obligations under the ESA does not

mean the agency must here account for the RFS Program’s

cumulative effects on endangered species since the program’s

outset. The Environmental Petitioners identify no authority for

36

that proposition, and the ESA’s implementing regulations

foreclose it. The regulations define an “environmental

baseline” as “the condition of the listed species or its

designated critical habitat in the action area, without the

consequences to the listed species or designated critical habitat

caused by the proposed action.” 50 C.F.R. § 402.02(d)

(emphasis added). In this case, the proposed agency action is

the Set Rule establishing volumes for 2023 through 2025. The

environmental baseline includes “the past and present impacts

of all Federal . . . actions.” Id. That definition requires EPA to

include the cumulative impact of previous rules promulgated

under the RFS Program in its environmental baseline.

Accordingly, EPA’s use of a baseline that excludes only the

effects of the Set Rule, and not the full impact of the Program

since its inception, was reasonable and not contrary to law.

The Environmental Petitioners next contend that EPA

failed to analyze any harms to endangered species from

increased water pollution despite listing it as a potential effect

of the Set Rule. EPA acknowledged that cropland expansion

attributable to the Set Rule could result in increased fertilizer

and pesticide runoff into waterways near expected areas of

cropland expansion, leading to problems like hypoxia for

endangered species. But, contrary to the Environmental

Petitioners’ claims, EPA did analyze those harms, ultimately

determining that the effects on endangered species were

discountable (that is, extremely unlikely to occur) or

insignificant (that is, not measurable). EPA based that

determination on extrapolation from a 2021 study published by

Chen et al. (Chen study) that modeled the impact on water

quality from crop expansion in the Missouri River Basin. That

study estimated that crop expansion had led to, at most, an

increase of 0.8% and 2.1% in the amount of nitrogen and

phosphorous, respectively, in that waterway, representing only

37

“minor increase[s]” from existing conditions. EPA Biological

Evaluation at 178, 234 (J.A. 1197, 1253).

The Environmental Petitioners critique the Chen study for

not addressing upstream tributaries. But EPA determined that

study was a “reasonable proxy” for the effects of the Set Rule

and that it “provides the best information available” on the

topic; the Environmental Petitioners do not point to any

alternative source in the record, let alone a better one. EPA

Biological Evaluation at 175 (J.A. 1194). Because “what

constitutes the best scientific and commercial data available is

itself a scientific determination,” it “belongs to the agency’s

special expertise and warrants substantial deference.” Nat’l

Fam. Farm Coal. v. EPA, 966 F.3d 893, 925 (9th Cir. 2020)

(citation and internal quotation marks omitted); see also Shafer

& Freeman Lakes Env’t Conservation Corp. v. FERC, 992

F.3d 1071, 1090 (D.C. Cir. 2021) (holding that FWS’s

judgment in selecting a particular method for calculating the

effects of agency action “merits the deference traditionally

given to an agency when reviewing a scientific analysis within

its area of expertise”) (citation and internal quotation marks

omitted).

We thus hold that EPA reasonably considered the effects

of increased water pollution from the Set Rule on endangered

species; its determination that the Set Rule is not likely to

adversely affect endangered species or their critical habitats

was reasonable and reasonably explained.

2.

The Environmental Petitioners also challenge as arbitrary

and capricious the National Marine Fisheries Service’s

concurrence with EPA’s view that the Set Rule is not likely to

adversely affect endangered species or their critical habitats. In

its Biological Evaluation, EPA identified 73 ESA-listed

38

species and 57 designated critical habitats under NMFS

jurisdiction that the Set Rule may affect through habitat

conversion and water pollution. Based on the information EPA

provided, NMFS considered two different scenarios in which

harm could come to species under its jurisdiction: when a

species lives (1) near or (2) downstream of a potential crop

conversion area. NMFS determined that the effects of the Set

Rule on species in the first scenario were discountable, and that

in the second scenario they were insignificant. The Service

therefore concurred with EPA that, while the Set Rule may

affect endangered species or critical habitat, it was not likely to

adversely affect them.

The Environmental Petitioners concede that NMFS’s

“discountable” determination was reasonable, but contest

NMFS’s “insignificant” determination as to species or habitat

downstream of potential crop conversion areas. That

determination is arbitrary, they say, because “insignificant”

means that “no harm will occur to even a single individual of

that species, not that impacts appear tiny,” and EPA’s own

Biological Evaluation predicted, for example, hundreds of

additional acres in corn cultivation and thousands more in

soybean cultivation in the Chesapeake Atlantic Sturgeon’s

range. Env’t Pet. Br. 24; EPA Biological Evaluation at 227

(J.A. 1246). But the Handbook defines an “insignificant”

effect as one that a person would not “be able to meaningfully

measure, detect, or evaluate.” Handbook at xvi (J.A. 2127).

So, while the Environmental Petitioners are correct that an

effect cannot be insignificant if it harms an endangered species

or its habitat, the nature and magnitude of the effect matters. A

harm that cannot be meaningfully detected or measured cannot

be attributed to an agency action.

NMFS determined here that the effect of the Set Rule on

overall water pollutant concentrations was extremely minor,

39

representing only a slight change from baseline conditions.

NMFS’s research demonstrated that species’ exposure to

pollutants like pesticides can vary by over 10% due to intrinsic

differences in climate and soil conditions and that species’

mortality rates can vary by more than 5% even if the species

are not exposed to additional pollutants. NMFS Concurrence

at 22 (J.A. 2063). In view of those facts, NMFS reasonably

determined that it could not meaningfully measure or detect the

projected effects of the Set Rule on species or habitat

downstream of potential crop conversion areas and that

accordingly, those effects are insignificant. As NMFS put it,

an extremely minor increase in pollutant exposure leads to

minimal increases in exposure and mortality among species,

and those minimally increased levels remain within the routine

variability of “the baseline conditions prior to any crop

conversion.” NMFS Concurrence at 22 (J.A. 2063).

Finally, the Environmental Petitioners argue that, even if

NMFS’s determinations as to the effects of the Set Rule on

endangered species or habitats were reasonable, NMFS erred

by failing to give the “benefit of the doubt” to the species,

contradicting what petitioners claim is its longstanding practice

and policy. Env’t Pet. Br. 26. In support of that claim, they

quote from the Handbook, which instructs: “If the nature of

the effects [of the agency action] cannot be determined, benefit

of the doubt is given to the species. Do not concur in this

instance.” Handbook at 3-12 (J.A. 2134). The problem with

that argument is that EPA did determine the nature of the

effects of the Set Rule: It could lead to habitat conversion and

increased water pollution that might harm endangered species

or their critical habitats. It then further determined,

consistently with the Handbook, that those effects were either

discountable or insignificant. Thus, NMFS did not err by

concurring with EPA on those grounds.

40

3.

The Environmental Petitioners also challenge the Fish and

Wildlife Service’s concurrence with EPA as both contrary to

the ESA and arbitrary and capricious. Unlike NMFS, FWS did

not concur with EPA by determining the Set Rule’s effects on

the 685 endangered species and 155 critical habitats under

FWS jurisdiction to be insignificant or discountable. Instead,

FWS made a threshold determination that the Set Rule would

have “no effect” on any endangered species or critical habitat,

and that it follows “[l]ogically” from such determination “that

these species or critical habitats are not likely to be adversely

affected by the action.” FWS Concurrence at 1 & n.2 (J.A.

2068 & n.2).

FWS rested its “no effect” determination on the definition

of the “effect” of an agency action in the ESA implementing

regulations. FWS reasoned that, because EPA could not

identify with geographical certainty where any cropland

conversions triggered by the Set Rule would occur, the Rule

could not be the but-for cause of any such conversions, making

them not “reasonably certain to occur.” 50 C.F.R. § 402.02.

Accordingly, FWS determined that the Set Rule would have

“no effect” on any endangered species or critical habitat under

50 C.F.R. § 402.02 and thus would not likely adversely affect

those species or habitats.

The Environmental Petitioners argue that FWS’s approach

is contrary to the ESA because it relies on the definition of

“effect” in the ESA’s implementing regulations in a way that is

not reflected in—and indeed conflicts with—the relevant

Handbook passage, which FWS and NMFS jointly developed

and have treated as authoritative for more than 50 years. EPA

identified hundreds of species under FWS jurisdiction that it

concluded the Rule “may affect.” In the Environmental

41

Petitioners’ view, FWS then failed to use scientific techniques

to assess the potential effects on those species, instead resorting

to a novel, acontextual reading of a regulatory definition that

conflicts with EPA and NMFS’s determinations.

For its part, EPA contends that FWS’s concurrence was a

reasonable application of ESA’s implementing regulations and

is supported by the Handbook because FWS has the final

responsibility, as the concurring service, to determine the

“effects of the action.” EPA Br. 130. And, EPA claims, it is

of no import that NMFS and FWS rested their concurrences on

different rationales because “neither the ESA, its regulations,

nor the Handbook mandate[s] a uniform methodology for

making no-effect/may-effect determinations.” EPA Br. 131-

32.

Faced with those disparate approaches, neither party

provides a cohesive framework for understanding the

relationship between the ESA’s implementing regulations and

the Handbook’s guidance. The Environmental Petitioners

ignore the plain text of 50 C.F.R. § 402.02, which defines the

“effect” of an agency action. If there is no effect of an agency

action because, for example, it is not “reasonably certain” that

a consequence of the action will occur, it is hard to see how an

agency action “may affect” an endangered species or critical

habitat. Handbook at xvi (J.A. 2127). EPA, on the other hand,

ignores the tensions between the Handbook and the ESA’s

implementing regulations. For example, if a consequence must

be “reasonably certain to occur” to constitute an “effect” of an

agency action, 50 C.F.R. § 402.02, how can an action’s effects

ever be identifiable because they “may affect” species, yet be

“discountable,” which the Handbook defines as one that is

“extremely unlikely to occur”? Handbook at xvi (J.A. 2127).

And it is difficult to see how FWS can be right that the Rule

had “no effect” at all if EPA and NMFS correctly determined

42

that there were identifiable effects of the Set Rule—albeit

effects that were “insignificant” or “discountable.”

We need not resolve the parties’ conflicting legal positions

because the inadequacy of FWS’s record and reasoning alone

makes clear that FWS’s concurrence was arbitrary and

capricious. Specifically, FWS’s concurrence failed to engage

with EPA’s resolution of the problem of geographical

uncertainty using forecasting models. FWS based its “no

effects” determination chiefly on the lack of geographical

certainty as to where cropland conversions would occur. That

information is inevitably somewhat uncertain because EPA

cannot control where or whether farmers will convert land to

cropland to meet the increased supply for renewable fuels

induced by the Set Rule. But in its Biological Evaluation, EPA

acknowledged the geographical uncertainty and addressed it

using forecasting models to predict the locations where

cropland conversion is most likely to occur. For new acres of

corn and canola, EPA employed a “probabilistic approach” to

select plots projected for conversion from land EPA identified

as the most likely to be converted to cropland based on

historical land use conversions. EPA Biological Evaluation at

133-34, 166 (J.A. 1152-53, 1185). Repeating that process

many times, EPA generated a list of locations most likely to be

converted under the Set Rule to cropland to grow corn and

canola. And for new acres of soybeans, EPA developed a

model that ranked acres of land in the United States by their

suitability for soybean farming based on several factors,

including the land’s ability to grow soybeans, proximity to

existing soybean fields, and historic soybean cultivation rates.

EPA then used that model to predict where conversion of land

to soybean cultivation is most likely to occur.

FWS’s concurrence acknowledged the existence of those

models, yet did not explain why they were flawed or

43

inadequate to support an aggregate estimate of the geographical

impact of the Set Rule. FWS simply dismissed their results as

uncertain. But certainty is not required. FWS simply ignored

what were, in EPA’s view, the “best estimates using the

available data” to resolve inherent uncertainty regarding the

geographical effects of the RFS Program. EPA Biological

Evaluation at 231 (J.A. 1250); Exchange Between EPA and

NMFS at 4 (J.A. 1278). Because FWS failed to engage with

the results of those models or, in the alternative, identify why

they did not constitute the best available science and data, it

“entirely failed to consider an important aspect of the

problem.” Motor Vehicle Mfrs. Ass’n, 463 U.S. at 43.

Accordingly, we hold that FWS’s concurrence with EPA’s

bottom line based on FWS’s determination that the Set Rule

will have “no effect” on endangered species or their critical

habitats was arbitrary and capricious.

* * *

In sum, we grant the petition as to two of the

Environmental Petitioners’ challenges: The CAA challenge to

EPA’s climate change analysis and the ESA challenge to

FWS’s concurrence with EPA’s Biological Evaluation. As to

those two challenges, the Environmental Petitioners are correct

that EPA and FWS, respectively, failed to adequately explain

the basis for their decisions. We deny the petition in all other

respects.

C. Remedy

With respect to remedy, the ordinary response to a

violation is to vacate the unlawful agency action. See 5 U.S.C.

§ 706(2). And the Environmental Petitioners request vacatur

of the Set Rule’s volumes of corn-based ethanol and soybean

oil-based renewable fuels. But in some cases, instead of

vacating the action we remand for the agency to correct its

44

errors. See Allied-Signal, Inc. v. U.S. Nuclear Regul. Comm’n,

988 F.2d 146, 150-51 (D.C. Cir. 1993). The appropriateness of

the remand-without-vacatur remedy turns on two factors: “(1)

the seriousness of the deficiencies of the action, that is, how

likely it is the agency will be able to justify its decision on

remand; and (2) the disruptive consequences of vacatur.”

United Steel v. Mine Safety & Health Admin., 925 F.3d 1279,

1287 (D.C. Cir. 2019) (citation and internal quotation marks

omitted).

Here, both factors support remanding without vacatur to

give the agencies an opportunity to correct their errors. As for

the likelihood of justifying their decisions on remand, EPA and

FWS each erred by inadequately explaining the connection

between the result it reached and the record underlying its

decision. The CAA provides EPA with significant discretion

as to how it structures its analysis of the effect of the Set Rule

on climate change. The agency may well be able to justify its

chosen volumes so long as it adequately explains why the older

2010 study, rather than the updated literature review, remains

the best source of data for estimating crop-based renewable

fuels’ long-term effects on GHG emissions. Similarly, FWS

may be able to better explain its reasoning for concurring with

EPA’s determination that the Set Rule is not likely to adversely

affect endangered species or their critical habitats. Both FWS

and NMFS received the same set of data and analyses from

EPA, and NMFS was able to adequately explain its decision.

Moreover, vacatur would be highly disruptive to all

stakeholders in the RFS Program as the compliance deadlines

for 2023 and 2024 have already passed.

Accordingly, we remand to EPA and FWS without

vacating the Set Rule’s volumes for further explanation of their

decisions.

45

II. Refiner Petitioners

The Refiner Petitioners challenge several aspects of the

volumes established in the Set Rule. First, they claim EPA’s

2023 and 2024 volume requirements were impermissibly late

and the 2023 Supplemental Standard was not authorized by

statute. Second, they assail the process EPA used to set all the

volumes as contrary to the CAA or alternatively, arbitrary and

capricious. Third, they attack the volumes established in the

Set Rule for specific categories of renewable fuels. Fourth,

they dispute EPA’s reliance on the economic theory that the

cost to obligated parties of complying with the Set Rule’s

volume mandates is passed through to consumers, also known

as the “RIN-passthrough theory.” We address each of those

challenges in turn, concluding they either lack merit or were

not properly preserved.

A. Late and Supplemental Standards

We begin with legal claims that the 2023 and 2024 volume

requirements were impermissibly late and that the 2023

Supplemental Standard was not authorized by statute. As

explained below, our precedent forecloses both contentions.

1.

Refiner Petitioners ask us to set aside the 2023 and 2024

volume requirements because EPA missed the statutory

deadlines for promulgating them. In years without a statutory

volume requirement, the CAA requires EPA to promulgate

volume requirements “no later than 14 months before the first

year for which such applicable volume will apply.” 42 U.S.C.

§ 7545(o)(2)(B)(ii). That means EPA was required to

promulgate 2023 requirements by the end of October 2021 and

2024 requirements by the end of October 2022. But EPA did

not promulgate volume requirements for either year until July

46

2023. See 88 Fed. Reg. at 44,468. Requirements for both years

thus were tardy, and the 2023 requirements, promulgated

midway through that compliance year, also were partially

retroactive. Refiner Petitioners contend that we should

therefore vacate the requirements for both years and instruct

EPA to set new requirements no higher than the 2022

requirements. We disagree.

We repeatedly have held that EPA may promulgate late,

and even retroactive, volume requirements so long as it

“reasonably considers and mitigates any hardship caused to

obligated parties by reason of the lateness.” Sinclair Wyo. I,

101 F.4th at 887 (citation omitted). For example, in National

Petrochemical & Refiners Association v. EPA, 630 F.3d 145

(D.C. Cir. 2010), we rejected a challenge to late and partially

retroactive volume requirements because EPA reasonably

considered whether obligated parties had adequate lead time

and access to a sufficient number of RINs to comply with the

delayed requirements. See id. at 165; see also Sinclair Wyo. I,

101 F.4th at 887 (applying National Petrochemical); Monroe

Energy, LLC v. EPA, 750 F.3d 909, 920 (D.C. Cir. 2014)

(same).

EPA reasonably considered the requisite factors here. It

explained that the market would produce enough renewable

fuel to enable obligated parties to satisfy the requirements. See

88 Fed. Reg. at 44,478. It also explained that obligated parties

would have at least nine months to bring themselves into

compliance with the 2023 requirements, and at least 22 months

to bring themselves into compliance with the 2024

requirements. Id. at 44,479. And EPA noted that any

remaining hardship would be minimal because, if an obligated

party could not acquire sufficient RINs within those times, it

could still achieve compliance by using carryover RINs or

carrying forward RIN deficits. Id.

47

Refiner Petitioners make two objections. First, they

contend that our precedents approving late volume

requirements are inapposite because they involved

requirements derived from statutory volume tables whereas the

volumes here were set by rule. ACE squarely forecloses that

argument. There, we held that the principles established in

National Petrochemical and Monroe Energy govern regardless

of whether the tardy volume requirements were derived from

the statutory tables or imposed in the first instance by EPA. See

864 F.3d at 721. Second, Refiner Petitioners contend that EPA

did not give enough lead time for the renewable-fuel industry

to increase production in response to the higher volume

requirements. In other words, the industry is unlikely to

produce enough fuel to enable obligated parties to achieve

compliance. But EPA set volume requirements within the

range that it found the renewable-fuel industry could produce.

Moreover, when EPA promulgated the requirements, it noted

that “RIN generation data from the first quarter of 2023

suggest[ed] the market [was] on track to supply the volumes [it

was] finalizing for 2023.” 88 Fed. Reg. at 44,478. In light of

that factual finding—which Refiner Petitioners do not

contest—EPA reasonably concluded that the RIN supply

would be adequate.

2.

Refiner Petitioners also challenge the 250-million-gallon

2023 Supplemental Standard. EPA imposed that standard in

response to ACE, which vacated EPA’s decision to reduce the

2016 statutory renewable-fuel requirement by 500 million

gallons. See ACE, 864 F.3d at 713. To remedy the underlying

legal error, EPA added 250 million gallons to both the 2022

and 2023 volume requirements. See Sinclair Wyo. I, 101 F.4th

at 893. We upheld the 2022 Supplemental Standard in Sinclair

Wyoming I as a valid exercise of EPA’s authority under 42

48

U.S.C. § 7545(o)(3)(B)(i) to “ensure” that applicable volumes

are “met.” See id. at 893-96. Because Refiner Petitioners

identify no meaningful difference between the 2022 and 2023

Supplemental Standards, we are bound to reject this challenge.

B. All Volumes

The Refiner Petitioners argue that the process EPA used to

set all volumes in the Set Rule was contrary to the statute and

arbitrary and capricious for two reasons. First, they claim EPA

exceeded the bounds of the CAA by relying on a policy of

continuously increasing volumes that Congress did not intend

it to consider. Second, like the Environmental Petitioners, they

contend that EPA’s weighing of the statutory factors was

arbitrary and capricious—with the Refiner Petitioners arguing

that the monetized costs of the Set Rule are unjustifiably

greater than its monetized benefits. Neither claim succeeds.

1.

The Refiner Petitioners argue that EPA “prioritized its

own policy over Congress’s text,” relying on an “extra-

statutory . . . policy of ever-increasing volumes of renewable

fuel” that misreads Congress’s intent. Refiner Pet. Br. 12-13,

14-15. For support, the Refiner Petitioners point to the

statutory mandate that EPA set volumes based on “a review of

the implementation of the [RFS Program]” in prior years

together with its analysis of the six factors Congress specified.

42 U.S.C. § 7545(o)(2)(B)(ii). The Refiners stress that,

because some of those factors may weigh against higher

renewable fuel volumes, the volumes that EPA set can only be

explained as the result of a tacit EPA policy of ever-increasing

volumes.

The Refiner Petitioners also point to three fuel-specific

statutory guardrails as indicia that Congress did not intend EPA

49

to require ever-greater renewable fuel volumes: Congress set

a floor for biomass-based diesel volumes at one billion gallons

but gave no “direction that biomass-based diesel should

increase aspirationally year-over-year.” Refiner Pet. Br. 14. It

required advanced biofuel to make up at least as high a

percentage of total renewable fuel as it did in 2022, thereby

effectively limiting the implied conventional renewable fuel

volume by linking it to the volume of less readily available

advanced biofuel. And Congress required EPA to set the

cellulosic biofuel volume at a level that would not require it to

issue a waiver reducing those volumes in the future, thereby

limiting the volumes to what is reliably attainable. See id. at

13-14 (citing 42 U.S.C. § 7545(o)(2)(B)(iii)-(v)). The

implication of those guardrails, according to the Refiner

Petitioners, is that EPA should have set lower volumes for

renewable fuels.

Refiner Petitioners catalog statutory indicia that Congress

did not intend EPA to employ a policy of setting ever-

increasing RFS volumes, but they fail to establish that EPA

used any such policy in setting the volumes that it did. They

do not, for example, contend that EPA exceeded any of the

guardrails they identify. The bare fact that the volumes

established in the Set Rule increase each year from 2023 to

2025 does not show that EPA followed a tacit policy of

continuous expansion contrary to the statute as written.

Refiner Petitioners also point to EPA’s statement in the

Final Rule that “[t]he volumes that [it] is finalizing continue to

support ongoing growth in renewable fuels, recognizing their

benefits, and based on EPA’s consideration of the multiple

factors identified in the statute.” 88 Fed. Reg. at 44,473. This,

they suggest, shows EPA’s impermissible adherence to an

extra-statutory goal to increase volumes each year from 2023

to 2025. But nothing about that statement suggests action

50

inconsistent with the terms of the statute as Refiner Petitioners

themselves read it. We therefore reject the Refiner Petitioners’

contention that EPA violated the Act by relying on any extra-

statutory factor of ever-increasing growth of the requisite

volumes of renewable fuels.

2.

Like the Environmental Petitioners, the Refiner Petitioners

also argue that EPA’s weighing of the statutory factors was

arbitrary and capricious because it failed to account for the

large disparity between the benefits and costs of the Set Rule.

Specifically, they point to the Rule’s monetized cost in

increased fuel prices, which was estimated at $23.8 billion

from 2023 to 2025, while the monetized benefit of improved

energy security was estimated at $513 million. By not

addressing that disparity when it set the challenged volumes,

they argue, EPA failed to consider an important aspect of the

problem, rendering its volumes arbitrary and capricious.

But the Refiner Petitioners’ argument fails for the same

reason as the Environmental Petitioners’. As explained in

Section I.A.1, the CAA does not require EPA to conduct a cost-

benefit analysis to set volumes. And nothing in our precedent

supports a freestanding requirement that, in setting volumes,

EPA must balance the quantified costs and benefits of each

volume it sets, let alone that the quantified benefits of the

volume must outweigh the quantified costs. Instead, the statute

affords EPA discretion in assessing the statutory factors. EPA

explained how it weighed the statutory factors in setting the

volumes it did, and its decision to set those volumes was not

arbitrary and capricious simply because the estimated

quantified costs of the Rule were greater than the quantified

benefits. We therefore deny the Refiner Petitioners’ various

51

challenges to the process EPA used to set all volumes in the Set

Rule.

C. Conventional Renewable Fuels

Next up is Refiner Petitioners’ contention that EPA

arbitrarily set unattainable implied volume requirements for

conventional renewable fuel, as primarily met by corn ethanol.

EPA set those volumes at 15 billion gallons per year even

though its candidate volume projections ranged from about

13.8 billion to 14 billion gallons per year. See 88 Fed. Reg. at

44,517. In doing so, EPA recognized that ethanol production

was unlikely to reach 15 billion gallons in any year through

2025. Id. But it noted that “[t]he implied volume requirement

for conventional renewable fuel can also be satisfied by non-

ethanol advanced biofuel, such as conventional biodiesel and

renewable diesel or advanced biodiesel and renewable diesel

beyond what is required by the advanced biofuel volume

requirement.” Id. And it reduced the non-cellulosic advanced

biofuel requirement by an amount sufficient to offset the

projected ethanol shortfall. See id. at 44,516. In sum, EPA

shifted slightly more than one billion gallons per year from the

implied non-cellulosic advanced biofuel volume to the implied

conventional volume.

EPA made this decision in an effort to incentivize a push

beyond the E10 blendwall. See id. at 44,517. By shifting

volumes from the advanced biofuel requirement to the

conventional requirement, EPA permitted obligated parties to

satisfy that volume with either type of fuel. In doing so, EPA

promised rewards for market actors who find ways to enable

increased ethanol consumption—for example, by producing

more motor vehicles that can use fuel with higher

concentrations of ethanol. But EPA declined to mandate

increased ethanol consumption, which would have strained

52

obligated parties’ ability to comply with their RFS obligations.

These choices were reasonable and reasonably explained.

Refiner Petitioners primarily object that EPA’s shifting of

volumes will increase RIN prices for ethanol. Perhaps so. But

the shift also reduced advanced biofuel volumes by

corresponding amounts, so one might expect an offsetting

decrease in RIN prices for that category. According to Refiner

Petitioners, the offsetting reduction merely indicates that EPA

arbitrarily set the advanced biofuel requirement too low. That

objection is difficult to understand, for the shift allows Refiner

Petitioners more compliance flexibility: If increased ethanol

consumption proves impossible, Refiner Petitioners may

achieve compliance by acquiring more RINs for advanced

biofuel, which also count toward the total renewable fuel

requirement, as would have been required absent the volume

shift away from that category. And in any event, if the volume

shift does engender an increase in ethanol RIN prices, that is

not problematic standing alone. As we have explained,

“increases in RIN prices are a completely understandable

effect” of any regulatory “pressure to expand renewable

volumes.” Alon Refin., 936 F.3d at 652.

Refiner Petitioners’ other objections fare no better. They

contend that EPA lacks statutory authority to tailor volume

requirements in order to incentivize ethanol use. But ethanol

is a kind of renewable fuel that the CAA seeks to incentivize,

and EPA justified its decision by reference to the factors that

the statute requires it to consider. See 88 Fed. Reg. at 44,517.

Further, Refiner Petitioners suggest that EPA’s decision will

not impact the overall consumption of renewable fuel. That is

true but irrelevant. As detailed above, EPA reasonably

explained its decision to shift volume from a narrower category

to a broader one.

53

D. Cellulosic Biofuels

Refiner Petitioners also challenge the cellulosic biofuel

volume requirements, which were keyed to the amount of that

fuel EPA thought would be produced in the relevant years. See

id. at 44,482-83. In the notice of proposed rulemaking, EPA

projected a 13.1 percent annual growth rate in the production

of cellulosic biofuel over 2022 levels. See id. at 44,482. In the

Final Rule, it revised that rate upward to 25 percent. See id.

Refiner Petitioners object that this projected growth rate

was arbitrarily high. That is wrong. EPA based its initial

projection on increased production in 2021 and 2022. After

receiving comments, EPA concluded that the COVID

pandemic had temporarily depressed growth over that time, so

EPA expanded its sample size to consider production growth

rates from 2015 through 2022. EPA reasoned that doing so

would mitigate the effect of COVID-related distortions and so

would more accurately reflect projected growth in the

cellulosic biofuel industry through 2025. See id. at 44,483.

Refiner Petitioners object that growth rates in the production of

cellulosic biofuel were trending downward before the onset of

COVID. See Response to Comments (RTC) at 30 (J.A. 1789).

Nonetheless, it appears that year-over-year growth remained

around 25 percent in April 2020, and EPA reasonably

concluded that the pandemic brought additional headwinds.

Under these circumstances, EPA reasonably based its projected

growth rate on increases observed over a longer period.

E. RIN Cost-Passthrough Theory

Refiner Petitioners object to EPA’s invocation of the “RIN

cost-passthrough theory,” which assumes that “obligated

parties pass through their RIN costs to consumers and that fuel

blenders reflect the RIN value of the renewable fuels in the

price of the blended fuels they sell.” See 88 Fed. Reg. at

54

44,505. As Refiner Petitioners note, we have recognized that

this theory does not always hold true, and hardship exemptions

might be required in instances where it does not. See Sinclair

Wyo. Refin. Co. v. EPA (Sinclair Wyo. II), 114 F.4th 693, 712-

14 (D.C. Cir. 2024). Yet we have also acknowledged that its

central premise—refineries are able to pass RIN costs along to

consumers—is generally true. See id. at 714 (RIN costs

“generally are passed through from [obligated parties] to their

customers” (emphasis in original) (citing Alon Refin., 936 F.3d

at 649)). Here, EPA reasonably invoked that generally true

premise in setting generally applicable volume requirements.

EPA also invoked the RIN cost-passthrough theory in

considering its obligations under the Regulatory Flexibility Act

(RFA). That statute generally requires agencies to prepare a

regulatory flexibility analysis for any rule subject to notice-

and-comment rulemaking procedures. See 5 U.S.C. § 604(a).

An agency need not do so, however, if it certifies that the rule

will not have a significant economic impact on a substantial

number of small entities. See id. § 605(b). EPA made such a

certification based on a determination that small refineries

would pass on their RIN costs to consumers. See 88 Fed. Reg.

at 44,552. Refiner Petitioners contend this was arbitrary

because, even if obligated parties generally pass RIN costs

along to consumers, small refineries often may be unable to do

so. Refiner Petitioners again invoke Sinclair Wyoming II,

which held that EPA had arbitrarily relied on the passthrough

theory to deny hardship exemptions to two small refineries.

See 114 F.4th at 714. In particular, we criticized EPA for

applying the theory without showing that every small refiner

could immediately pass on RIN costs to its customers. See id.

That argument was not preserved before EPA in the

rulemaking at issue here. The CAA generally forecloses

judicial review of objections that were not “raised with

55

reasonable specificity during the period for public comment,”

42 U.S.C. § 7607(d)(7)(B), and no commenter raised the RFA

during that period. The Refiner Petitioners respond that they

did raise the factual predicate for their RFA claim—namely that

obligated parties do not in fact pass all of their RIN costs onto

consumers. But they did so only in the context of a challenge

to the volume requirements themselves. And as we have

explained, assessing whether the general rule was arbitrary

may be a far different inquiry from assessing an RFA claim,

which is keyed to the specific impact of the rule on small

businesses. Because no party put EPA “on notice” of an RFA

challenge, the CAA now bars that claim. Appalachian Power

Co. v. EPA, 135 F.3d 791, 818 (D.C. Cir. 1998).

* * *

We therefore deny the Refiner Petitioners’ petition in all

respects.

III. Neste

Neste challenges the Set Rule’s recordkeeping and RIN

generation provisions, arguing that they are arbitrary and

capricious. According to Neste, the recordkeeping provisions

improperly impose new location, amount, and certification

requirements on renewable fuel producers. In Neste’s view,

EPA neither adequately justified these changes nor reasonably

responded to objections. Separately, Neste asserts that EPA

failed to justify revisions to its RIN generation requirements.

We address each challenge in turn.

A. Recordkeeping Provisions

Neste is a foreign producer of renewable fuel that

generates RINs under the RFS program. Section 211 of the

56

CAA mandates that qualifying renewable fuel must be

produced from renewable biomass. See 42 U.S.C.

§ 7545(o)(1)(J). To ensure compliance, RFS regulations

require that “any RIN-generating foreign producer of a

renewable fuel . . . must keep records of feedstock purchases

and transfers associated with renewable fuel for which RINs

are generated, sufficient to verify that feedstocks used are

renewable biomass.” 40 C.F.R. § 80.1454(c).

Certain feedstocks, such as separated food waste, are

subject to additional requirements to confirm compliance. Id.

§ 80.1454(j). Producers must maintain documents

demonstrating the “amounts, by weight, purchased” from

separated waste sources, id. § 80.1454(j)(1)(i), and the

“location of any establishment(s) from which the waste stream

consisting solely of . . . separated food waste . . . is collected,”

id. § 80.1454(j)(1)(ii). Initially, producers were required to

submit a plan at registration documenting feedstock types,

collection methods, verification measures, and, where

applicable, how the cellulosic and non-cellulosic portions of

waste would be quantified. See id. § 80.1450(b)(1)(vii)(B)

(cleaned up).

Because producers were required to update their

information each time their feedstock suppliers changed, in

2016, EPA proposed removing the registration requirement

while maintaining the requirement that producers comply with

general recordkeeping obligations under 40 C.F.R. § 80.1454.

See Renewables Enhancement and Growth Support Rule, 81

Fed. Reg 80,828, 80,902-03 (Nov. 16, 2016). Producers still

“must have documents from their feedstock supplier certifying

that the feedstock qualifies as renewable biomass, describing

the feedstock and identifying the process that was used to

generate the feedstock.” 40 C.F.R. § 80.1454(c)(1)(iii). In

2020, EPA finalized the removal of the registration

57

requirement and promulgated a provision at 40 C.F.R.

§ 80.1454(j)(1)(ii) to emphasize that the general requirement

remained. See RFS Program: Standards for 2020 and Biomass-

Based Diesel Volume for 2021 and Other Changes, 85 Fed.

Reg. 7,016, 7,062 & n.230 (Feb. 6, 2020).

EPA’s 2020 rule clarified that the term “location” in

subsection (j) refers to “the physical address that the aggregator

obtained the waste used as feedstocks from, not the physical or

company address of the aggregator.” See id. at 7,062

(clarifying the meaning of “location” in recognition that “many

renewable fuel producers receive wastes used as feedstocks

from an aggregator”). The Set Rule maintained those

recordkeeping requirements without modification. See 88 Fed.

Reg. at 44,547-48. EPA further clarified that self-declarations

are not permitted under subsections 80.1454(d) and (j) due to

the difficulty of auditing records that often originate from

parties outside EPA’s direct regulation, including those that

originate outside the United States. See RTC at 367 (J.A.

1904). To allay producer concerns about requesting

confidential business information from aggregators, EPA

added a compliance option based on independent auditors’

verification of records held by the feedstock aggregator. See

88 Fed. Reg. at 44,548.

1.

We deny Neste’s challenge as to the Set Rule’s location-

recordkeeping requirement because that provision comports

with RFS regulations without capricious deviation. Neste

argues that the requirement imposes a new burden inconsistent

with prior guidance. In its view, prior to the Set Rule,

producers were permitted to comply by reporting the physical

address of an aggregator rather than of the original source.

Neste points to EPA’s 2015 guidance, which it insists allowed

58

producers to rely on aggregator addresses and regional

information, as evidence of a significant policy shift. RFS

Registration Presentation at 3-4 (J.A. 2153-54). But this

argument overlooks the plain language of the regulation, the

statutory framework, and the broader purpose of the RFS

Program.

EPA reasonably justifies requiring records that ensure

feedstock can be traced back to its origins, rather than only to

aggregators that receive feedstock from those original sources.

First, the statute requires documentation of “the location of any

establishment(s) from which the waste stream consisting solely

of separated yard waste, separated food waste, or biogenic

waste oils/fats/greases is collected,” expressly focusing on

recording the place where the feedstock originated. The point

of the recordkeeping is to ensure traceability to confirm that

feedstocks meet the statutory definition of renewable biomass.

40 C.F.R. § 80.1454(j)(1)(ii). Tellingly, the 2020 clarification

frames “location” as the source from which “the aggregator

obtained the waste used as feedstocks,” distinguishing it from

“the physical or company address of the aggregator.” 85 Fed.

Reg. at 7,062 (emphasis added). That reading of the regulation

is further reinforced by a related provision, which requires all

domestic producers to “keep documents . . . that identify where

the feedstocks were produced and are sufficient to verify that

feedstocks used are renewable biomass.” 40 C.F.R.

§ 80.1454(d)(1).

Second, Neste fails to account for the regulatory history.

Recordkeeping provisions have consistently required

producers to document the origin of feedstocks. Compare 40

C.F.R. § 80.1454(c)(1), (d)(1) with (j)(1)(ii). The 2015

guidance Neste cites concerns only the RFS Program’s now-

revoked registration requirements and has no bearing on the

recordkeeping obligations that remain in place. The 2015

59

guidance does not transform the Set Rule’s discussion of the

requirement to record source location into a new or

unexplained deviation from the existing recordkeeping

framework. See El Puente v. U.S. Army Corps of Eng’rs, 100

F.4th 236, 256 (D.C. Cir. 2024). To the contrary, there is no

deviation. Neste has not pointed to any pre-2020 EPA rule or

guidance that interprets the relevant recordkeeping provisions

in a way that diverges from EPA’s current understanding.

Finally, the purpose of the location recordkeeping

requirement further underscores its validity. Accurate

documentation of original source locations ensures that

feedstocks qualify as renewable biomass. 40 C.F.R. §

80.1454(c)(1). Traceability prevents fraud, enhances

accountability, and ensures renewable fuel achieves its

intended environmental benefits. RTC at 365 (J.A. 1902). By

requiring source documentation and prohibiting self-

declarations, the Set Rule strengthens compliance, deters fraud,

and promotes transparency. EPA reasonably explained that “it

is not possible to verify self-declarations without additional

documentation.” RTC at 367 (J.A. 1904). These measures

implement Congress’s directive to prevent fraudulent RIN

generation and ensure that renewable fuel meets rigorous

environmental standards. See RTC at 365 (J.A. 1902).

2.

We also deny Neste’s challenges to the Set Rule’s

requirement to document waste amounts. Neste argues that the

Set Rule’s amount-recordkeeping provision imposes new

burdens by requiring detailed tracking of amounts at individual

sources. In its view, EPA’s prior practices and guidance

permitted producers to rely on aggregate amount data rather

than records for each specific source. Neste contends that the

Set Rule effects a significant policy shift and imposes

60

impractical obligations on renewable fuel producers. These

arguments are unpersuasive.

First, the unchallenged regulatory text plainly requires

documentation of the “amounts, by weight, purchased” from

waste sources. 40 C.F.R. § 80.1454(j)(1)(i). And such

specificity is critical to verifying that the feedstocks qualify as

renewable biomass. As EPA explained in its Response to

Comments, the requirement ensures transparency and prevents

the generation of fraudulent RINs. See RTC at 365 (J.A. 1902).

EPA did not make substantive changes to the amount

requirement in the Set Rule; Neste offers no evidence that EPA

has ever interpreted this regulation differently than it does now.

Its assertion that EPA has shifted policy is therefore

unsubstantiated. See El Puente, 100 F.4th at 256.

Second, EPA provided a reasonable explanation for

maintaining the amount-recordkeeping requirement. EPA

clarified that, while the now-revoked registration provision

only required enough information for EPA to determine it was

possible for producers to obtain qualifying feedstocks, more

detail is required if the recordkeeping requirements are to

provide means to verify that the quantities of feedstocks used

to produce renewable fuel are, in fact, in compliance with the

statute. See RTC at 374-75 (J.A. 1911-12). While Neste

argues that requiring records of feedstock amounts from each

original source significantly burdens producers that rely on

confidential information from aggregators to supply separated

waste, Neste Comment at 12 (J.A. 552), any such burden is

mitigated by the alternative recordkeeping pathway. See

generally 40 C.F.R. § 80.1479; 88 Fed. Reg. at 44,548.

Under that alternative compliance option, aggregators can

maintain detailed amount records on behalf of producers,

alleviating concerns about operational inefficiencies or the

61

confidentiality of aggregators’ sources. 40 C.F.R.

§ 80.1479(e); see Spirit Airlines, Inc. v. Dep’t of Transp., 997

F.3d 1247, 1255 (D.C. Cir. 2021) (citing Chamber of Com. v.

SEC, 412 F.3d 133, 145 (D.C. Cir. 2005) (“Where a party raises

facially reasonable alternatives, the agency must either

consider those alternatives or give some reason for declining to

do so.”) (cleaned up)). EPA reasonably considered industry

feedback in developing this pathway, which balances

compliance oversight with practical flexibility. See RTC at

359-78 (J.A. 1896-1915); see also Fox Television Stations, 556

U.S. at 515; Motor Vehicle Mfrs. Ass’n, 463 U.S. at 43.

Accordingly, we reject Neste’s challenges to the amount

requirement.

3.

Neste also claims that the Set Rule arbitrarily eliminated

the use of self-certification by aggregators. We conclude that

EPA never issued authoritative guidance suggesting that

aggregators could satisfy all RFS recordkeeping requirements

merely with self-certification. To comply with the

recordkeeping requirements, RIN-generating foreign

renewable fuel producers and importers must secure

certification from originating feedstock suppliers verifying that

their feedstocks qualify as renewable biomass. Such

certification has always been required of importers and foreign

producers that generate RINs. See 40 C.F.R

§ 80.1454(c)(1)(iii). They must also “keep records of

feedstock purchases and transfers . . . sufficient to verify that

feedstocks used are renewable biomass.” Id. § 80.1454(c)(1).

In the Set Rule, EPA merely reaffirmed that aggregators’

self-certifications cannot meet these requirements because they

lack independent verifiability. In this regard, RFS regulations

have always stated that regulated entities must provide “such

62

other records as may be requested by EPA.” 40 C.F.R.

80.1454(j)(1)(iii); see EPA Br. 98. EPA identified significant

fraud risks that may lead to an increase in misrepresented

feedstock compliance. RTC at 370 (J.A. 1907). Because

aggregators may assume recordkeeping responsibilities,

provided they register and submit to EPA oversight under

Section 80.1479, EPA’s approach reasonably balances the RFS

program’s integrity with flexibility for industry participants.

We therefore reject Neste’s challenge to the certification

requirement.

B. RIN Generation Provision

We further deny Neste’s challenges to the Set Rule’s

restriction on generating RINs for fuel not ultimately used in

the United States. Neste contends that this restriction

constitutes an arbitrary and capricious policy shift and imposes

retroactive burdens on producers. We are unpersuaded.

In the Set Rule, EPA reinforced that: (1) RINs may not be

generated for renewable fuel that is not produced for use in the

United States, 40 C.F.R. § 80.1426(c)(2); and (2) RINs

corresponding to fuel that is not sold in the United States are

invalid, id. § 80.1431(a)(1)(viii). See 88 Fed. Reg. at 44,582.

Neste argues that those two provisions are at odds with one

another and represent an unjustified substantive change that

imposes new burdens on producers. However, when read

together, those provisions reflect a consistent statutory mandate

under the CAA. The statute directs EPA to ensure that

“transportation fuel sold or introduced into commerce in the

United States . . . contains at least the applicable volume of

renewable fuel.” 42 U.S.C. § 7545(o)(2)(A)(i). Congress

focused on whether the renewable fuel is in fact consumed

within the United States. It is insufficient that the fuel might at

some point have been intended for U.S. consumption.

63

The interplay between subsections 80.1426(c)(2) and

80.1431(a)(1)(viii) addresses potential discrepancies between

intended and actual fuel destinations, particularly in dynamic

global markets where fuel originally produced for domestic use

may ultimately be used elsewhere. See 88 Fed. Reg. at 44,547.

By aligning RIN validity with actual domestic usage, EPA’s

interpretation ensures consistency with the statutory goal of

promoting renewable fuel consumption within U.S. borders.

See, e.g., 88 Fed. Reg. at 44,525 n.264.

Neste contends that the Rule’s prohibition on generating

RINs from renewable fuel not used in the United States

imposes impractical burdens by requiring producers to predict

market dynamics and fuel destinations. However, EPA

reasonably addressed these concerns by noting the regulatory

flexibility available to foreign producers. See 88 Fed. Reg. at

44,547. Foreign producers can modify their storage practices

to eliminate the need to predict the final destination of their fuel

or, alternatively, rely on U.S.-based importers to generate

RINs, so long as the requirements are met under 40 C.F.R.

§ 80.1426. Id.; RTC at 358 (J.A. 1895). And producers may

notify EPA to invalidate RINs generated in error for fuel not

ultimately used in the United States.

Neste also argues that the Set Rule’s requirements amount

to a retroactive regulatory change, creating unforeseen burdens

on producers who generated RINs under prior rules.

Retroactivity principles bar agencies from imposing new

obligations on past actions without clear statutory authority.

See Sierra Club v. Whitman, 285 F.3d 63, 68 (D.C. Cir. 2002).

However, the record does not support this claim. Here, EPA’s

clarification reinforces its longstanding framework; it does not

alter past obligations or otherwise impose any retroactive

changes. See 88 Fed. Reg. at 44,547.

64

For these reasons, we hold that EPA’s interpretation of

RIN generation requirements is neither arbitrary nor

capricious. Accordingly, we deny Neste’s challenges.

IV. SABR

In addition to joining with Petitioners’ other challenges as

discussed above, SABR challenges EPA’s decision to include

renewable diesel and renewable jet fuel in the Set Rule’s

biomass-based diesel program. The biomass-based diesel

category encompasses both biodiesel and renewable diesel.

Both of those fuels are substitutes for fossil-based diesel but

each is produced by a different chemical process. EPA Br. 69-

70. SABR accordingly asserts that it was arbitrary and

capricious for EPA to continue to allow “renewable diesel, and

renewable jet fuel to be used to meet the ‘biomass-based diesel’

volume requirements.” SABR Br. 10. In SABR’s view, EPA

should have “revised its compliance provisions to ensure that

only ‘biodiesel’ that qualifies as ‘biomass-based diesel’ is used

to meet that requirement.” Id. at 10-11.

Before reaching the merits of SABR’s challenge, we must

determine whether it is timely. Section 307 of the CAA

requires a challenge to a final EPA action to

be filed within sixty days from the date notice of such

promulgation, approval, or action appears in the

Federal Register, except that if such petition is based

solely on grounds arising after such sixtieth day, then

any petition for review . . . shall be filed within sixty

days after such grounds arise.

42 U.S.C. § 7607(b)(1). “This time bar is jurisdictional.”

Growth Energy, 5 F.4th at 12 (citation omitted).

65

EPA asserts that SABR’s challenge to the categorical

makeup of the biomass-based diesel volumes is untimely

because EPA included renewable diesel and renewable jet fuel

as biomass-based diesel in 2010, more than thirteen years

before SABR filed its petition. In 2007, EPA explicitly

interpreted “biodiesel” under 42 U.S.C. § 13220(f) to include

both mono-alkyl ester biodiesel and non-ester renewable

diesel. Regulation of Fuels and Fuel Additives: Renewable

Fuel Standard Program, 72 Fed. Reg. 23,900, 23,917 (May 1,

2007). EPA then implemented its interpretation of the

biomass-based diesel category in 2010, when it set its first

volume standards for biomass-based diesel. See Regulation of

Fuels and Fuel Additives: Changes to Renewable Fuel

Standard Program, 75 Fed. Reg. 14,670, 14,686 (Mar. 26,

2010); 40 C.F.R. § 80.1401 (2010). Thereafter, EPA’s 2010

regulations explained that biomass-based diesel “includes both

biodiesel (mono-alkyl esters) and non-ester renewable diesel

(including cellulosic diesel),” and defined biomass-based

diesel to include renewable diesel and renewable jet fuel. 75

Fed. Reg. at 14,686, 14,864; 40 C.F.R. § 80.1401 (2010). In

2013, EPA further clarified that biomass-based diesel RINs

“may be generated for renewable jet fuel.” Regulation of Fuels

and Fuel Additives: Identification of Additional Qualifying

Renewable Fuel Pathways Under the Renewable Fuel Standard

Program, 78 Fed. Reg. 14,190, 14,201 (Mar. 5, 2013). To be

timely, SABR needed to file a petition within sixty days of one

of these instances of rulemaking. It failed to do so, and its

current petition is untimely as to this issue. Moreover, SABR

does not contend that any “after-arising” grounds exist. See 42

U.S.C. § 7607(b)(1). We therefore lack jurisdiction to reach

the merits of SABR’s biomass-based diesel challenge.

SABR next challenges EPA’s decision to adjust the

conversion factor for biomass-based diesel based on the

increasing share of that category composed of renewable

66

diesel. According to EPA, however, SABR lacks Article III

standing to challenge the biomass-based diesel conversion

factor in the percentage standard equation because its members

suffer no injury from EPA’s upward adjustment of the

biomass-based diesel conversion factor. For standing

purposes, there must be an injury-in-fact—an “invasion of a

judicially cognizable interest which is (a) concrete and

particularized and (b) actual or imminent, not conjectural or

hypothetical.” Bennett v. Spear, 520 U.S. 154, 167 (1997).

“In the Set Rule, EPA adjusted the conversion factor from

1.5 to 1.6 to account for the increase in the amount of

renewable diesel relative to biodiesel in the biomass-based

diesel category.” EPA Br. 84 (citing 88 Fed. Reg. at 44,546-

47). “Early in the RFS [P]rogram, virtually all biomass-based

diesel was mono-alkyl ester biodiesel, so EPA set the

conversion factor based on the value for mono-alkyl ester

biodiesel, 1.5.” Id. at 85 (citing 88 Fed. Reg. at 44,545). “In

the Set Rule, EPA explained that due to the growth of

renewable diesel, the percentage standard equation for

biomass-based diesel should be adjusted to account for that

growth.” Id. (citing 88 Fed. Reg. at 44,546-47). As a result,

“EPA increased the biomass-based diesel conversion factor

from 1.5 to 1.6.” Id. “The effect of this change is a higher

annual volume obligation for biomass-based diesel.” Id. The

higher volume benefits SABR members because it means

obligated parties have a higher compliance obligation in the

“biomass-based diesel” category. They can satisfy that

compliance obligation by blending or purchasing RINs of any

qualifying type of biomass-based diesel, including the

biodiesel SABR members produce and distribute. Because

SABR members lack a discernible injury, SABR lacks standing

to challenge the biomass-based diesel conversion factor. We

therefore must dismiss its petition as nonjusticiable.

67

CONCLUSION

For the foregoing reasons, we grant in part Environmental

Petitioners’ petition to the extent that we remand the Set Rule

to EPA and FWS without vacatur for EPA and FWS to conduct

further proceedings consistent with this decision. We deny the

petitions of Refiner and Neste Petitioners and dismiss SABR’s

petition.

So ordered.

KATSAS, Circuit Judge, concurring in part and dissenting

in part: Imagine I am planning a celebratory chambers dinner.

I ask a law clerk to select a restaurant based on three

considerations—quality of food, cost, and proximity to the

courthouse. The clerk begins by surveying food ratings and,

based on that consideration alone, tentatively picks the Inn at

Little Washington. Then, the clerk determines the expected

cost of the meal ($300 per person, without wine) and expected

travel time (1.5 hours one-way, assuming no traffic). Without

addressing whether this expensive and distant meal is worth it,

and without assessing the quality, cost, or travel time for dinner

at any other restaurant, the clerk announces that he has

considered all the relevant factors and then books a reservation

at the Inn. Would anyone think that the clerk has fairly

understood my instructions and reasonably explained his

choice? Obviously not.

In this case, the Environmental Protection Agency did

something quite similar. Congress instructed the EPA to set

renewable fuel standards based on six considerations, including

production capacity, environmental impacts, energy security,

and fuel and food costs. Yet in setting the standards at issue,

EPA considered only one of these factors—how much

renewable fuel the industry might be capable of producing.

Then, addressing the other statutory factors, EPA determined

various costs and benefits of the standards as so set. But EPA

never weighed those costs and benefits. Nor did it consider the

costs and benefits of possible standards other than the ones

keyed to maximum production capacity. And EPA omitted

these steps even though its own analysis showed that costs—

including monetized fuel and food costs, as well as

unmonetized environmental costs—would dramatically

outstrip any climate or other benefits.

In my view, these standards are neither reasonable nor

reasonably explained. I agree that they are arbitrary for the

narrow reasons flagged by my colleagues. But I respectfully

2

disagree with my colleagues’ broader conclusion that EPA

adequately accounted for the relevant costs and benefits. And

because the flaws in EPA’s analysis run much deeper than my

colleagues acknowledge, I not only would hold that the

standards are arbitrary, but also would set them aside.

I

The Clean Air Act 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 vary according

to their feedstocks and expected reductions in greenhouse-gas

emissions. Id. § 7545(o)(1)(B), (D), (E), (J). For each of four

renewable fuel categories, Congress itself set minimum annual

volumes, in statutory tables running through 2022. Id.

§ 7545(o)(2)(B)(i)(I)–(IV). For years after 2022, EPA must set

minimum annual volumes “based on a review of the

implementation of the program during calendar years specified

in the tables, and an analysis of” 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 ... ;

3

(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.

Id. § 7545(o)(2)(B)(ii). Simplified, this provision requires

EPA to set minimum annual volumes “based on” its analysis of

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

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

infrastructure, (5) costs, including fuel and food costs, and (6)

other factors.

At issue here are the minimum volumes that EPA set for

2023, 2024, and 2025. For each of the statutory renewable-fuel

categories, the volume requirements steadily increase from

year to year. Renewable Fuel Standards (RFS) Program:

Standards for 2023–2025 and Other Changes, 88 Fed. Reg.

44,468, 44,470 (July 12, 2023) (Final Rule).

EPA sought to justify these requirements in two steps.

First, it established “candidate volumes” based on what it

described as “a subset of the statutory factors that are most

closely related to supply of and demand for renewable fuel.”

Final Rule, 88 Fed. Reg. at 44,480. EPA acknowledged that

these “supply-related factors” did not encompass “the other

economic and environmental factors” referenced in the statute,

including factors related to costs. Id. But EPA described the

candidate volumes as “a reasonable first step” to “narrow[] the

scope for the multifactor analysis.” Id.

Second, EPA determined various costs and benefits of the

candidate volumes, measured against a baseline of no required

4

minima. EPA summarized those effects in the rule itself, Final

Rule, 88 Fed. Reg. at 44,499–506, and it elaborated on them in

an accompanying Regulatory Impact Analysis (RIA), J.A.

1297–1773. The RIA identified some 28 “[p]otential impacts

associated with” the candidate volumes, organized around the

six statutory factors. RIA at v. Most strikingly, it determined

that these requirements would cost consumers at least $41

billion over three years: $23.8 billion in increased fuel costs

and $17.2 billion in increased food costs. Id. (fuel); see id. at

370 (food). The RIA also described in qualitative terms fifteen

different environmental harms from production and use of the

candidate volumes: four adverse effects on air quality; three

adverse effects on wetlands, ecosystems, and wildlife habitat;

six adverse effects on soil and water quality; and two adverse

effects on water quantity and availability. Id. at v.

On the other side of the ledger, the RIA identified an

energy-security benefit of $513 million over the same three-

year time frame. RIA at v. In qualitative terms, the RIA

identified benefits of increased employment and economic

development in agricultural sectors, with the caveat that

“increases in employment in some sectors may be offset by

unemployment in other sectors.” See id. at 351. Finally, the

RIA discussed at length possible climate benefits from use of

the candidate volumes, as measured by reduced greenhouse-

gas emissions over a thirty-year timeframe. See id. at 120–210.

But after surveying the relevant literature, EPA could report

only a range of widely varying estimates, and it expressly

declined to “adjudicate which particular studies, estimates or

assumptions are most appropriate.” Final Rule, 88 Fed. Reg.

at 44,500. These ranges even indicated a possibility that some

renewable fuels might increase GHG emissions because lower

emissions from burning the fuel might not offset higher

emissions from producing it. See RIA at 128. For example,

EPA noted studies indicating that lifecycle GHG emissions

5

from ethanol—the most common type of renewable fuel—may

be as high as 116 grams of carbon dioxide per unit of energy,

compared to a range of 84 to 98 grams per unit of energy for

petroleum-based fuel. See id. at 161.

Despite its agnosticism about the extent of any climate

benefit, EPA went on to calculate “Illustrative Scenario[s]”

regarding GHG emissions reductions. RIA at 164. One

scenario assumed relatively high emissions for petroleum-

based fuels and relatively low emissions for biofuels; it showed

that the candidate volumes produced a sizable reduction in

emissions over three decades. Id. at 174. Another scenario

assumed relatively low emissions for petroleum-based fuels

and relatively high emissions for biofuels; it showed only a

marginal reduction in GHG emissions over the same

timeframe. See id. at 178. EPA then monetized those results

using three possible discount rates. The first scenario produced

a climate benefit somewhere between $19 billion and $115

billion. See id. at 198. The second scenario produced a climate

harm somewhere between $1.2 billion and $1.5 billion. See id.

at 206.1

After identifying the potential costs and benefits

associated with the candidate volumes, EPA imposed those

volumes with one immaterial exception.2 In doing so, EPA

1

In the second scenario, marginally reduced GHG emissions

cashed out as a net climate harm because use of renewable fuels

causes a substantial short-term increase in emissions due to land-use

changes, followed by decreased emissions gradually occurring over

longer periods and thus discounted over longer timeframes.

2

EPA shifted about one billion gallons from the advanced

biofuel requirement to the implied requirement for conventional

renewable fuel, thereby pushing the latter requirement some one

billion gallons above the outer bound of what EPA thought the

market could produce. See Final Rule, 88 Fed. Reg. at 44,517–18.

6

stated that it had “balance[d] the relevant factors” and found

the candidate volumes “appropriate.” Final Rule, 88 Fed. Reg.

at 44,472. But neither the Final Rule nor the RIA attempted to

compare the various costs and benefits, whether quantitative or

qualitative, of the candidate volumes. Nor did EPA compare

the costs and benefits of the candidate volumes to the costs and

benefits of any lower possible volumes other than zero.3

II

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 text

copies the familiar standard of review set forth in the

Administrative Procedure Act. See 5 U.S.C. § 706(2)(A).

Therefore, in construing the governing legal standard, we must

not defer to the EPA’s views. See Loper Bright Enters. v.

Raimondo, 603 U.S. 369, 392 (2024). And in assessing EPA’s

explanation of its policy choice, we must consider whether the

decision “was based on a consideration of the relevant factors

and whether there has been a clear error of judgment.” Motor

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

29, 43 (1983) (cleaned up). Likewise, we must set aside the

3

EPA made similarly conclusory statements in adopting the

component categories of the candidate volumes. See Final Rule, 88

Fed. Reg. at 44,513 (“Based on our analyses of all of the statutory

factors, we find that the benefits of higher volumes of cellulosic

biofuel outweigh the potential negative impacts.”); id. at 44,516

(“Based on our analyses of all of the statutory factors, we believe that

the candidate volumes derived [for advanced biofuel] would be

reasonable and appropriate to require.”); id. at 44,517 (“Our analysis

of several of the statutory factors highlighted, in our view, the

importance of ongoing support for corn ethanol generally and for an

implied conventional renewable fuel volume requirement that helps

to incentivize the domestic consumption of corn ethanol.”).

7

volume requirements if EPA “entirely failed to consider an

important aspect of the problem” or “offered an explanation for

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

short, we must consider whether the requirements are

“reasonable and reasonably explained.” FCC v. Prometheus

Radio Project, 592 U.S. 414, 417 (2021).

A

Start with the governing statutory standard. It requires

EPA to set volume requirements “based on” six factors. In

ordinary parlance, that phrase connotes some measure of

balancing. If my hapless law clerk selects the Inn at Little

Washington for its superlative food quality and then simply

reports the high costs and travel times, he has not made a

decision “based on” the three relevant factors. Likewise, if

EPA selects volumes based on a “subset” of statutory factors

excluding economic and environmental considerations, Final

Rule, 88 Fed. Reg. at 44,480, and then merely reports the

various high economic and environmental costs associated

with those volumes, it has not selected the volumes “based on”

the six statutory considerations.

EPA claims to have “balance[d] all the relevant factors,”

Final Rule, 88 Fed. Reg. at 44,472, but the record indicates

otherwise. At every turn, the RIA simply racked up the many

costs and few benefits associated with the candidate volumes.

See, e.g., RIA at 115 (impact on pollutants); id. at 198 & 207

(GHG emissions); id. at 222 (wetland conversions); id. at 237–

38 (soil and water quality); id. at 270 (energy security); id. at

1675 (commodity prices); id. at 367 (food prices). But neither

the RIA nor the Final Rule attempted to weigh these competing

costs and benefits, or to explain why any concededly

speculative, long-term climate benefit might outweigh the

concededly certain, immediate, and onerous economic and

8

environmental costs. Likewise, after setting candidate volumes

for the express purpose of determining maximum industry

production capacity, EPA never sought to consider whether

less ambitious standards might produce more sensible

tradeoffs. (Just as, say, my law clerk never considered whether

a Zagat-rated 28 dinner, a few minutes away and costing only

$100 per person, might be a more sensible choice than the 29-

rated dinner at the Inn.) And EPA never addressed whether to

temper the candidate volumes, even as the RIA racked up one

cost after another.

My colleagues contend that EPA need not balance the

relevant costs and benefits at all. Ante at 22. But even when a

statute says nothing about costs, agencies must take them into

account because “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); see also id. at 769 (Kagan, J., dissenting) (“Cost is

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

factor in regulation.”). My colleagues invoke cases suggesting

that a requirement to “consider” costs does not require formal

cost-benefit analysis. See Nat’l Ass’n of Home Builders v.

EPA, 682 F.3d 1032, 1039–41 (D.C. Cir. 2012); Nat’l Wildlife

Fed’n v. EPA, 286 F.3d 554, 570–71 (D.C. Cir. 2002) (per

curiam); ante at 22–23. These cases are in some tension with

Michigan v. EPA, which stressed the importance of cost

considerations unless Congress explicitly makes them

irrelevant. But in any event, the cases are inapposite here,

where the governing statute does more than simply require

some consideration of costs. As explained above, Congress

required EPA to promulgate volume requirements “based on”

specific categories of costs, 42 U.S.C. § 7545(o)(2)(B)(ii),

which implies more than merely identifying strikingly high

costs and then moving ahead anyway.

9

B

EPA’s failure to weigh costs and benefits was no small

oversight. The petitioners here, including various industry and

environmental groups, contend that the costs of the Final Rule

“dwarf” its benefits. Env’t Pet. Br. 37. They are correct.

The economic costs are striking. By EPA’s own measure,

they run to at least $41 billion over three years. See RIA at v,

370. “[T]hat’s billion with a b.” White Stallion Energy Cir.,

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). And they

exceed the lone monetized benefit—energy security—by

almost 80 times over. See RIA at v.

Of course, climate impacts must also be considered. But

EPA declined to make any estimate of reduced GHG

emissions, other than to note widely varying ranges reflected

in the literature. And EPA declined to commit itself to any

monetized climate benefit, other than to run calculations

showing wildly disparate values depending on the emissions

estimates and discount rates selected. Moreover, even on

assumptions favorable to EPA, the numbers do not add up.

Assume for example the first scenario noted above, which

posits relatively high GHG emissions for petroleum-based

fuels and relatively low GHG emissions for renewable fuels.

Also assume a three percent discount rate—the intermediate

rate used by EPA. On those assumptions, the candidate

volumes yield a climate-change benefit of $75 billion over

thirty years, see RIA at 198, compared to increased fuel and

food costs of $41 billion over the first three years alone. One

need hardly be a trained economist to discern that, in any

apples-to-apples comparison over comparable timeframes,

EPA’s own analysis would show costs dwarfing benefits, even

10

accounting for the climate. And this says nothing of the

second, less favorable scenario presented by EPA, in which

there is no climate benefit at all.

Turning to other qualitative impacts, the picture becomes

even bleaker. Most notably, consider environmental impacts

besides climate change. According to EPA, the candidate

volumes will cause increased emission of ammonia, carbon

monoxide, nitrogen oxides, sulphur dioxide, and volatile

organic compounds, among other pollutants. RIA at v. They

will cause increased conversion of various habitats to cropland,

decreased plant diversity, and increased use of harmful

pesticides. Id. They will increase erosion, deplete soil

nutrients, risk chemical contaminations, and increase stress on

aquatic life. Id. And they will deplete aquifers and divert water

used to meet human needs. Id. EPA briefly flagged economic

benefits for rural sectors that supply feedstock for renewable

fuel. See id. at 354–57. But it also noted that those benefits

may be offset by countervailing harms in other sectors, like

those supplying inputs for petroleum products. See id. at 351.

And it nowhere explained how these upstream economic

impacts could justify the eleven-digit price-tag and multiple

environmental harms noted above.

C

To justify the 2023–25 volume requirements, EPA

primarily invokes Sinclair Wyoming Refining Co. LLC v. EPA,

101 F.4th 871 (D.C. Cir. 2024), which upheld the 2022 volume

requirements. Sinclair involved an exercise of EPA’s reset

authority. Before 2022, this provision required EPA to

prospectively adjust statutory volume requirements if it had

waived substantial portions of such volumes in preceding

years. 42 U.S.C. § 7545(o)(7)(F). In making these

adjustments, EPA was required to take account of the same six

11

factors at issue here. See id. For 2022, the reset authority was

triggered by waivers due to chronic shortfalls in the availability

of one narrow category of renewable fuel—cellulosic biofuel.

See Sinclair Wyo., 101 F.4th at 880. EPA took that shortfall

into account, but otherwise preserved all of the express and

implied statutory volume requirements. See id. In upholding

the reset 2022 requirements, we concluded that EPA had

“reasonably used the implied statutory volumes in setting the

2022 applicable volumes.” Id. at 888.

By contrast, there are no statutory volume requirements for

EPA to fall back on for 2023–25. EPA acknowledged that this

absence required a fundamentally different approach to setting

the requisite volumes:

We acknowledge that we are taking a different

approach to developing candidate volumes in this rule

than we did under the reset authority in the 2020–2022

rule. The primary difference is that in the 2020–22

rule the candidate volumes for non-cellulosic

advanced biofuel and conventional renewable fuel

were generally in the implied statutory volumes for

these fuel types in comparison to the statutory

volumes. In this rule we are establishing volumes for

2023–2025, a time period for which there are no

statutory targets. We therefore developed the

candidate volumes for non-cellulosic biofuel and

conventional biofuel based primarily on a

consideration of supply-related factors, with a

consideration of other relevant factors as noted in the

following sections.

Final Rule, 88 Fed. Reg. at 44,480. Given the different

statutory considerations and agency rationales, Sinclair does

not compel affirmance here.

12

* * * *

In sum, EPA’s decision to impose candidate-volume

requirements is difficult to understand in light of the six

statutory factors. And all EPA offers to suggest that it balanced

those factors is its own ipse dixit, which is no substitute for

reasoned decision-making. See Am. Clean Power Ass’n v.

FERC, 54 F.4th 722, 727 (D.C. Cir. 2022).

III

For these reasons, as well as the narrower ones identified

by my colleagues, I would hold that the 2023–25 volume

requirements are arbitrary. Because those requirements are

more deeply flawed than my colleagues recognize, and because

EPA has shown no significant possibility that it will be able to

rehabilitate the requirements on remand, I would set aside the

requirements rather than simply remanding without vacatur.

See 42 U.S.C. § 7607(d)(9)(A); Allied-Signal, Inc. v. U.S.

Nuclear Regul. Comm’n, 988 F.2d 146, 151 (D.C. Cir. 1993).4

4

Other than the points addressed above, I agree with the

analysis in the per curiam opinion. Accordingly, I respectfully

dissent from parts I.A.1, I.C, and II.B.2 of that opinion, and join the

rest.