US energy sector files suit against EPA over biodiesel rule

27 November 2012 18:55  [Source: ICIS news]

WASHINGTON (ICIS)--The American Petroleum Institute (API) said on Tuesday that it has filed suit against the US Environmental Protection Agency (EPA), seeking to overturn the agency’s mandate for biodiesel consumption in 2013.

The institute said that its action, filed in the US Court of Appeals for the District of Columbia, challenges the EPA’s decision to mandate US consumption of 1.28bn gal of biodiesel in 2013, an increase of 28% from the 2012 mandate.

Simultaneously, API filed a petition with the agency seeking reconsideration of the 2013 biodiesel use requirement.

“EPA’s overzealous 2013 biodiesel mandate is unworkable, could raise the costs of making diesel fuel and should be reduced,” said Bob Greco, API’s director for downstream interests.

Greco noted that in EPA’s own evaluation of the 2013 biodiesel rule, the agency said that next year’s mandate would generate costs that would exceed biodiesel benefits by as much as $425m (€327.2m).

He also pointed out that EPA has yet to resolve confusion and costs created by the fraudulent issuance of renewable identification numbers (RINs) for biodiesel production.

“The fraudulent RIN problem is having, and will continue to have, significant impacts on the biodiesel marketplace that make it more difficult for companies to comply with EPA’s mandate,” Greco said.

Separately, API on Tuesday called on Congress to repeal the renewable fuels standard (RFS) in the 2007 Energy Independence and Security Act (EISA), which mandates increasing US consumption of ethanol, biodiesel and other biofuels.

“We believe the renewable fuels standard is unworkable and should be repealed,” Greco said.

He said the RFS programme is fraught with problems and that “The only way to fix it is to scrap the law and start over, if Congress believes such a programme is necessary.”

But Greco argued that both the RFS and its parent statute, EISA, have been obviated by the new boom in US domestic oil and natural gas production.

“The notion that we need a renewable fuels standard to promote energy independence and security, as the 2007 statute is named, has been turned on its head by the tremendous growth in domestic oil and natural gas,” he said.

($1 = €0.77)

Paul Hodges studies key influences shaping the chemical industry in Chemicals and the Economy

By: Joe Kamalick
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