API challenges 2013 RFS cellulosic volume requirement

By Erin Voegele | October 08, 2013

The American Petroleum Institute has filed a lawsuit challenging the U.S. EPA’s 2013 volume requirement under the renewable fuel standard (RFS), which was finalized in August. Representatives of the biofuels industry are calling the move frivolous.

The lawsuit was filed against the EPA in the D.C. Circuit Court on Oct. 8.

Harry Ng, API vice president and general council, called the 2013 mandate unrealistic, noting that that the requirements were finalized several months late. “EPA issued this year’s requirements nine months late and has once again mandated significantly more cellulosic ethanol than is available in the marketplace,” he said in a statement.

The API said that while the EPA has mandated refiners use 4 million gallons of cellulosic ethanol in 2013, only 142,000 gallons have been available for refiners to blend so far. “The 2013 mandates are an example of why EPA can’t be relied upon to implement the RFS effectively and in the interest of consumers,” Ng said. “Ultimately, Congress must fully repeal this unworkable and costly mandate.”

In its final rulemaking, the EPA utilimately requires obligated parties to blend 6 million ethanol-equivalent gallons of cellulosic biofuel into transportation fuel this year. Based on the agency’s current projections of cellulosic biofuel production in 2013, that would equate to 4 million actual gallons of cellulosic biofuel.

In the final rulemaking, the EPA discussed its 2013 projections for cellulosic biofuel production, noting that Ineos Bio is expected to manufacture 4 million gallons of cellulosic ethanol this year. The EPA also said it anticipates that KiOR will produce 5.5 million physical gallons of cellulosic drop-in fuels, which equates to 9 million gallons on an ethanol equivalency basis. In addition, various pilot plants are expected to produce 100,000 gallons of cellulosic ethanol. Together, all three sources are expected to result in 13.1 million gallons of ethanol equivalent cellulosic biofuel production by the end of the year.

Bob Dinneen, president and CEO of the Renewable Fuels Association, has responded to the API’s announcement. “This is another frivolous effort by API to abuse the court system in their slavish effort to repeal a public policy that is working for farmers, gasoline marketers, and consumers,” he said. “While the 2013 RVOs were issued later than anyone would have liked, the fact is the statute is crystal clear, and all stakeholders have been producing and blending at levels that will unquestionably meet the 2013 requirements. This is a lawsuit in search of a problem.”

Tom Buis, CEO of Growth Energy, has also weighed in on the issue. “This latest move comes as no surprise. Big Oil is doing, and continues to do everything possible to undermine the RFS and prevent competition in the marketplace from higher blends of renewable fuel,” he said.