US court invalidates EPA mandate for cellulosic ethanol

25 January 2013 19:25 Source:ICIS News

WASHINGTON (ICIS)--A federal appeals court on Friday ruled invalid the cellulosic ethanol consumption mandate set by Environmental Protection Agency (EPA), a decision that frees US refiners from fines imposed by the agency for noncompliance.

In a suit brought by the American Petroleum Institute (API) and other energy sector trade groups, it was argued that EPA’s requirement for blending 8.6m gallons of cellulosic ethanol into the nation’s gasoline supply in 2012 was invalid simply because there are no commercial volumes of cellulosic biofuel available.

Refiners and fuel blenders who failed to use the mandated volumes of cellulosic ethanol were required to pay EPA a $0.78 (€0.59) per-gallon fine, for an overall cost to refiners of about $8m.

In the suit, API and others argued that EPA cannot reasonably impose a consumption mandate for a fuel that doesn’t exist or assess fines for failing to use the non-existent fuel.

In Friday’s ruling, the US Appeals Court for the District of Columbia Circuit said that EPA could not “let its aspirations for a self-fulfilling prophecy divert it from a neutral methodology”.

API downstream director Bob Greco hailed the court decision, noting that the ruling also recognised that if cellulosic ethanol producers failed to manufacture the fuel, EPA was essentially imposing fines on those producers’ would-be customers.

“We are glad the court has put a stop to EPA’s pattern of setting impossible mandates for a biofuel that does not even exist,” Greco said, noting that according to EPA’s own data there was no commercial supply of the fuel available in 2012.

He said the court decision will require EPA to set cellulosic ethanol consumption mandates that are in keeping with available supply.

($1 = €0.75)

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