Oil industry asks EPA to zero out 2012 cellulosic target

Source: Amanda Peterka, E&E reporter • Posted: Friday, February 15, 2013

The oil industry is asking U.S. EPA to set its 2012 requirement for cellulosic biofuel at zero after a federal court vacated the agency’s target.

The American Petroleum Institute noted in a letter to EPA on Tuesday that the court ruled the agency must base its renewable fuel standard for cellulosic biofuel on what it expects will “actually happen.” Any target above zero, API says, won’t reflect what happened in the marketplace last year.

“EPA should set the cellulosic biofuels RFS at zero,” Bob Greco, API’s director of downstream activities, wrote. “This is the only outcome that will properly implement the court’s holding that EPA is required to ‘aim … at accuracy.'”

Cellulosic fuel refers to biofuels made from plant-based materials like agricultural residues, switch grass and municipal solid waste.

Last year, EPA required 8.65 million gallons of cellulosic biofuel to be blended into gasoline or that refiners purchase waivers to make up for the lack of fuel in the marketplace. According to the agency, the handful of cellulosic biofuel producers in the country generated about 20,000 gallons last year.

While there are several cellulosic refineries scheduled to come online this year, API and other refining interests have argued that the agency’s targets are consistently too ambitious. In January, the U.S. Court of Appeals for the District of Columbia Circuit agreed, remanding the requirement back to the agency (Greenwire, Jan. 25).

In his letter, Greco also asked EPA to not require that refiners purchase cellulosic waiver credits until after the court sends the rule back to the agency at the end of February.

“Requiring obligated parties to purchase waiver credits and then immediately seek a full refund from EPA after the court’s mandate issues would impose a wasteful and needless burden on both obligated parties and the EPA,” Greco wrote.