Court Tosses Out EPA’s Cellulosic Biofuel Regulation

A federal appeals court has rejected an Environmental Protection Agency rule that required refiners to generate or buy advanced biofuels, given that biofuel manufacturers did not make enough product for the industry to buy. So reports Bloomberg.

While the EPA set a standard for refiners of 8.65 million gallons of cellulosic ethanol in 2012, the actual U.S. production was 20,000 gallons. And those 20,000 gallons were exported to Brazil. The three-judge panel, in Washington, rejected that target and told the EPA to come up with a new mandate.

The American Petroleum Institute, a trade association for the oil and gas industry, had requested that the court to toss out the EPA’s 2012 mandated standards for the production and sale of the cellulosic fuels, which are fuels made from wood chips, switchgrass or agricultural waste.

Refiners are not in the position to help grow the cellulosic biofuel industry, the appeals panel wrote in its ruling. The EPA is essentially telling cellulosic fuel producers to do a good job, and if they don’t, the government will fine their customers, the court wrote.

It was the second blow the appeals panel in Washington handed to the Obama administration this week. A panel of three different judges rejected the president’s ability to appoint three members of the National Labor Relations Board when the U.S. Senate is not in session. Also this week, the full court said it would not reconsider an earlier ruling it had made that tossed out EPA regulations designed to reduce cross-state pollution from coal-burning power plants.

Both the EPA and a spokesman for the U.S. Justice Department said they were currently reviewing the court’s biofuel ruling. Rejecting the 2012 standard for certain cellulosic fuels puts 2013’s standard in doubt, officials said. The EPA was already late in issuing its 2013 mandates.

There have been mandates for three years, and in each of those years, there has been no product to buy, says Bob Greco, director for the American Petroleum Institute. Hopefully in the future, the EPA’s mandates will better match reality, he said.

But some say the court’s actions may only hinder biofuel production further. The ruling, and the subsequent uncertainty is likely to hurt investment in this burgeoning industry, said Michael Frohlich of Growth Energy, which represents ethanol producers. It creates a level of vulnerability, Frohlich said.

To read the original Bloomberg article cited in this story, click here

Tags: Policy

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