Federal court vacates key part of EPA’s biofuels requirements

A federal appeals court threw out the US Environmental Protection Agency’s 2012 cellulosic biofuel projection, saying that it exceeded the agency’s statutory authority.

But US District Court for Washington’s Senior Circuit Judge Stephen F. Williams rejected the American Petroleum Institute’s challenge to EPA’s refusal to reduce applicable advanced biofuels volumes for that year.

“We agree with API that because EPA’s methodology for making its cellulosic biofuel projection did not take neutral aim at accuracy, it was an unreasonable exercise of agency discretion,” Williams wrote.

API’s group downstream director immediately welcomed the court’sbiofuels projection decision.

“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,” Bob Greco said Jan. 25. “This absurd mandate acts as a stealth tax on gasoline with no environmental benefit that could have ultimately burdened consumers.”

Judge elaborates

Williams conceded in his decision that the court ruled in the past that a federal agency can base a standard or mandate on future technology where a rational connection exists between the regulatory target and the presumed innovation.

In such cases, however, “government joined forces with industry specialization and competence,” he continued. “Here, by contrast, EPA applies the pressure to one industry (the refiners), yet it is another (the producers of cellulosic biofuel) that enjoys the requisite expertise, plant, capital, and ultimate opportunity for profit.”

Williams said that apart from their role as captive consumers, refiners are not in a position to ensure, or even contribute to, cellulosic biofuel industry growth. “Given this asymmetry in incentives, EPA’s projection is not “technology-forcing” in the same sense as other innovation-minded regulations that we have upheld,” he wrote.

“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,” Greco said. “The court has provided yet another confirmation that EPA’s renewable fuels program is unworkable and must be scrapped.”

Contact Nick Snow at[email protected]