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Mixed RFS court decision brings equally mixed reactions

By Ron Kotrba | January 28, 2013

The D.C. Circuit issued what is being dubbed “a narrow but mixed decision” Jan. 25, vacating the 2012 cellulosic biofuel standard but affirming the 2012 advanced biofuel standard.

Several biofuel organizations that intervened in the litigation to defend the rulemaking—the Advanced Biofuels Association, Advanced Ethanol Council, American Coalition for Ethanol, Biotechnology Industry Organization, Growth Energy and the Renewable Fuels Association—noted that while the court vacated the cellulosic standard, it also rejected the American Petroleum Institute’s argument that EPA was required to follow the U.S. Energy Information Administration’s projections in setting its own.

The court also rejected API’s argument that EPA was not entitled to consider information from cellulosic biofuel producers in setting its projection.

The court vacated the cellulosic standard because it believed that EPA had impermissibly set the volume with the objective of promoting growth in the industry, rather than simply making an accurate prediction. Under the D.C. Circuit’s decision, EPA is free to reinstate the volumes it established provided the information available at the time would support the agency’s conclusion that it is reasonably achievable.

The D.C. Circuit upheld EPA’s decision not to reduce the advanced biofuel volume, a move applauded by the National Biodiesel Board.

“This is just the latest in a series of cases in which the oil industry has tried unsuccessfully to relitigate the standards for renewable fuels, and it is yet another victory for our nation's shift toward cleaner, more diverse energy supplies,” said Anne Steckel, vice president of federal affairs for NBB. “The fact is that the RFS is a very effective program for improving U.S. energy security, creating jobs and reducing greenhouse gas emissions. We look forward to working constructively with our partners in the petroleum industry to meet these goals moving forward.”

The U.S. biodiesel industry produced nearly 1.1 billion gallons of advanced biofuels in 2012, and as the court noted, it is poised to play a greater role moving forward.

API Group Downstream Director Bob Greco said, “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. This absurd mandate acts as a stealth tax on gasoline with no environmental benefit that could have ultimately burdened consumers.” Greco continued, saying, “This decision relieves refiners of complying with the unachievable 2012 mandate and forces EPA to adopt a more realistic approach for setting future cellulosic biofuel mandates. The court has provided yet another confirmation that EPA’s renewable fuels program is unworkable and must be scrapped.”

API continues to recommend that EPA base its prediction on at least two months of actual cellulosic biofuel production in the current year when establishing the mandated volumes for the following year.

“This approach would provide a more realistic assessment of potential future production rather than simply relying on the assertions of companies whose ability to produce the cellulosic biofuel volumes EPA hopes for is questionable,” API stated in a release.

In a joint statement, the advanced and cellulosic biofuel organizations said, “Although we disagree with the court’s decision vacating the 2012 cellulosic volumes, [the] decision once again rejects broad-brushed attempts to effectively roll back the federal renewable fuel standard.”

 

 

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