In an effort to accelerate the growth of domestic fuels, Congress passed a law in 2005 mandating that transportation fuel sold in the United States contain a minimum amount of renewable fuels. Expanded in 2007, the mandate, called the Renewable Fuel Standard, required that the country’s transportation fuel contain at least 36 billion gallons of renewable fuels annually by 2022, with 21 billion coming from advanced biofuels, including 16 billion from cellulosic ethanol alone.

But the cellulosic industry has been unable to meet annual mandates for renewable fuel. As a result, the EPA has proposed trimming them. For 2014, the mandate for all renewable fuels has been reduced 16 percent, to 15.21 billion gallons, with cellulosic ethanol getting slashed to only 17 million gallons this year — down from the original 2014 goal of 1.75 billion. The proposal is open for public comment, and the Environmental Protection Agency should reach a final decision this month.

“I guess it will give some lawyers some jobs to try to figure out how to end a piece of legislation that, when it was written, was so out of touch with reality,” said Henry Lee, public policy professor at Harvard University. “You can’t create a mandate for something that does not exist commercially.”

Jeff Passmore, former vice president of Iogen, a company that makes cellulosic ethanol, said uncertainty and fear about changing the Renewable Fuel Standard caused investors to hold back on essential funding for the industry.

“What we need is confidence in the market that there’s going to be policy stability coming out of Washington in the RFS,” Passmore said.

Another concern facing cellulosic ethanol is the blend wall, or the maximum amount of ethanol that can be blended in with gasoline.

The U.S. standard mixture of ethanol and gasoline is E10, which means 10 percent ethanol and 90 percent gasoline. Because corn ethanol produces more than 10 percent, the cellulosic biofuel industry confronts a saturated market.

The EPA approved the use of E15 fuel, which increased the size of the ethanol market, but it hasn’t yet become the industry standard.

But straight biofuels and higher blends of ethanol, like E85, call for specialized pumps and cars that have limited availability throughout the nation. The expense of building E85 infrastructure is sometimes paid at the gas station’s expense, or split with the fuel supplier on the contingency of selling only their fuel at the pump.

Most E85 infrastructures are concentrated in the Midwest because proximity to the ethanol cuts down on transportation. But if trash-based ethanol becomes successful, it would open the door for ethanol production in all corners of the nation — and on a year-round basis.

“Because it is so abundantly available near large population centers where fuel is demanded, we think that municipal solid waste is really the premier advanced biofuel feedstock,” said Ted Kniesche, vice president of business development at Fulcrum BioEnergy.