Cellulosic Ethanol Target Nixed

A federal appeals court has ruled that EPA must revise its requirements for levels of cellulosic ethanol that must be blended with gasoline. Under a law setting a renewable fuel standard, Congress established annual goals for production of ethanol made from cellulosic material, such as corn waste and switchgrass. For 2012, the goal was 500 million gal. However, only 20,000 gal of cellulosic ethanol was produced last year, noted the U.S. Court of Appeals for the District of Columbia Circuit in its Jan. 25 ruling. In light of this, EPA lowered the 2012 level but retained an “aspirational” target of 8.65 million gal to encourage production. The law, however, requires U.S. refiners to be penalized for not blending sufficient ethanol. As a result, last year refiners would have had to buy some $8 million in credits for failing to purchase nonexistent ethanol, the American Petroleum Institute argued in its successful court challenge. A three-judge panel threw out this portion of the Renewable Fuel Standard and ordered EPA to reconsider its target. The court rejected API’s challenge to the broader advanced fuel requirement, which includes biodiesel.