US refiners criticise EPA refusal to waive cellulosic ethanol rule

25 May 2012 22:10  [Source: ICIS news]

HOUSTON (ICIS)--The American Fuel & Petrochemical Manufacturers (AFPM) on Friday criticised the US Environmental Protection Agency’s (EPA) decision not to grant a waiver of its cellulosic ethanol fuel mandate.

The agency decided on 22 May not to grant a request by three refining groups to waive the 2011 cellulosic biofuel volume mandate, the AFPM said.

The EPA required refiners to use 6m gal (23m litres) of cellulosic ethanol in 2011, even though no such fuels were produced in commercial volumes that year, the AFPM said.

In lieu of using cellulosic ethanol, refiners were required to pay $6.8m (€5.4m) to the EPA for credits needed to comply with the mandate, the AFPM said.

The AFPM, the American Petroleum Institute (API) and the Western States Petroleum Association jointly filed a petition on 20 January asking the EPA to waive the biofuel mandate.

“We fail to understand how EPA can maintain a requirement to purchase a type of fuel that simply doesn't exist,” said AFPM president Charles Drevna. The decision “simply upholds EPA's imposition of a backdoor gasoline tax on American consumers".

The denial of the petition was applauded by the Biotechnology Industry Organization (BIO), which said it is a group of 1,100 biotechnology companies, academic institutions and state biotechnology centres.

More than 30 companies have built and operated pilot and demonstration cellulosic biofuel plants in the US, said Brent Erickson, executive vice president of BIO’s Industrial & Environmental Section.

The first companies are set to open commercial operations in coming months, and others have begun construction on large-scale facilities, Erickson said.

“The biofuels industry is creating competition in the US transportation fuel market that will benefit consumers,” Erickson continued.

The AFPM has also filed a lawsuit to challenge the cellulosic ethanol mandate, saying it is unrealistic and constitutes an illegitimate tax.

($1 = €0.80)

By: Brian Ford
+1 713 525 2653

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