US group files suit against federal cellulosic ethanol mandate

12 March 2012 19:19  [Source: ICIS news]

A court gavelWASHINGTON (ICIS)--A US energy industry group on Monday said it has filed suit to challenge the federal government’s mandate for US cellulosic ethanol consumption, charging that it is unrealistic and constitutes an illegitimate tax.

The American Petroleum Institute (API) said that it filed a petition for review in the US Circuit Court for the District of Columbia (DC), asking the court to order the Environmental Protection Agency (EPA) to lower its cellulosic ethanol mandate to reflect actual availability of that biofuel.

The EPA issued its new renewable fuel standard (RFS) on 9 January, including the requirement that US refiners and importers of gasoline and diesel fuel must use more than 8.6m gal (32.6m litres) of cellulosic ethanol in their transportation fuel blends.

If refiners or importers fail to use the required volume of cellulosic ethanol, they must pay a $0.78/gal (€0.58/gal) waiver fee to the EPA.

“EPA’s standard is divorced from reality,” said API downstream director Bob Greco, because “there is a complete lack of commercial supply of the [cellulosic] fuel”.

The API and other fuels-related trade groups argue that they cannot be fairly forced to pay a fine for failing to use a fuel supplement that does not exist or that does not exist on a commercial scale capable of meeting the 8.6m gal/year mandate.

The EPA mandate for US cellulosic ethanol consumption is authorised under the Clean Air Act (CAA), but API noted that the CAA requires the EPA to set its annual cellulosic ethanol mandate based on “the projected volume available”.

“EPA must set the requirement at a realistic volume but they have not,” Greco said, adding: “This is regulatory absurdity.”

The agency’s mandate, said Greco, “is effectively a tax on manufacturers of gasoline that could ultimately burden consumers”.

A spokesman for the US Department of Energy’s Energy Information Administration (EIA) said that to his knowledge there was no commercial-scale production of cellulosic ethanol in the US in 2011.

The EPA also reported that there was no cellulosic ethanol production in the US for 2011.

($1 = €0.76)

By: Joe Kamalick
+1 713 525 2653

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