The Environmental Protection Agency announced on Thursday that it would be increasing the mandated amount of cellulosic biofuels refineries must purchase in 2013 to 14 million gallons, despite a court ruling that the agency exceeded its authority in requiring refiners to purchase virtually non-existent fuel.
“We are disturbed that EPA is mandating 14 million gallons of cellulosic ethanol when zero gallons are available for compliance as of today,” said Charles Drevna, president of the American Fuel and Petrochemical Manufacturers, in a statement.
Federal judges ruled that the EPA’s mandate for refiners to purchase credits for 8.65 million of gallons of cellulosic biofuel was flawed as virtually none of the biofuel is commercially available.
“[W]e agree with [the American Petroleum Institute] that EPA’s 2012 projection of cellulosic biofuel production was in excess of the agency’s statutory authority,” the court said in its decision.
According to EPA data, only 20,069 gallons of cellulosic biofuels were available for purchase in 2012 — all of that was made in the month of April. To meet the EPA’s mandate, refiners were forced to purchase biofuel credits for cellulosic biofuel.
“The court recognized the absurdity of fining companies for failing to use a nonexistent biofuel,” said American Petroleum Institute downstream group director Bob Greco. “But EPA wants to nearly double the mandate for the fuel in 2013. This stealth tax on gasoline might be the most egregious example of bad public policy, and consumers could be left to pay the price. EPA needs a serious reality check.”
U.S.-made ethanol comes primarily from corn, while cellulosic biofuel is a type of ethanol made from fermented grass, solid waste and other non-food materials.
However, the EPA’s increased mandate for 2013 was hailed by the renewable fuel industry.
“The proposed standard in no way exaggerates the volumes that will be available in 2013 based on current information, and may ultimately prove to be conservative,” said Bob Dinneen, CEO of the Renewable Fuels Association.
The mandate to use cellulosic biofuels is part of the federal Renewable Fuel standard which was first implemented in 2005 and then expanded in 2007. Under the RFS, the EPA sets standards for how much renewable fuel must be blended used by refiners. EPA renewable fuel requirements for 2013 call for refiners to use 16.55 billion gallons of renewable fuels — a 1.35 billion gallon increase from 2012.
However, the decision did not strike down EPA mandates for refiners to use other renewable fuels, like ethanol and biodiesel, into gasoline.
However, there have been sharp criticisms of the EPA’s renewable fuel mandates such rampant as renewable fuel credits — which refiners can purchase in order to meet EPA standards. The EPA has recently taken steps to address fraudulent credits, but refiners are still skeptical.
“We are encouraged that EPA finally released a proposal aimed at protecting refiners from the rampant fraud in the biodiesel market,” said Drevna “However, it is shocking that the Agency would mandate such high biodiesel volumes this year since 140 million biodiesel credits turned out to be fraudulent.”
“Today’s decisions by EPA are emblematic of an irreparable Renewable Fuel Standard and underscores the reasons why Congress should repeal the program,” Drevna concluded.
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