A federal appeals court in Washington on Friday canceled a mandate from the Environmental Protection Agency that required refiners to buy cellulosic biofuels as a way of supporting the nascent alternative fuel industry.
Cellulosic biofuel is ethanol fermented from products other than corn, which is the major source of biofuel production in the United States.
The U.S. Court of Appeals for the District of Columbia ruled that the mandate for 2012, which would have held oil refiners accountable for purchasing 8.65 million of gallons of the biofuel even though none is commercially available for sale, was based on flawed projections.
The agency’s projections “did not take neutral aim at accuracy,” according to the court opinion, written by Judge Stephen Williams.
“It was an unreasonable exercise of agency discretion” and was “in excess
of the agency’s statutory authority,” Williams wrote.
The ruling will save the industry about $6.8 million this year that would have been paid to the EPA as waiver payments, since there were no actual gallons available for purchase.
“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,” said Bob Greco, downstream director for the oil industry lobbying group American Petroleum Institute, which filed the lawsuit to challenge the EPA mandate. “This absurd mandate acts as stealth tax on gasoline with no environmental benefit that could have ultimately burdened consumers.”
While the ruling cancels the mandate for refiners to buy specific quantities of cellulosic biofuel, the EPA mandates for refiners to buy and blend ethanol, biodiesel and other fuels into their products remain intact.
The EPA did not immediately respond to a request for comment.