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Court Rules US Biofuels Mandate Illegal

Matthew Wald, The New York Times

A federal appeals court threw out a federal rule on renewable fuels on Friday, saying that a quota set by the Environmental Protection Agency for incorporating liquids made from woody crops and wastes into car and truck fuels was based on wishful thinking rather than realistic estimates of what could be achieved.

The ruling by the United States Court of Appeals for the District of Columbia involved a case brought by the American Petroleum Institute, whose members were bound by the 2012 cellulosic biofuels quota being challenged.

Production of advanced biofuels for use in gasoline is a cherished goal of the Obama administration and a major long-term hope for reducing emissions of greenhouse gases.

But production of the “cellulosic” fuel, made from woody material, has been slow to start up, making it virtually impossible to come by. That has presented the refiners, the ones required to buy the cellulosic fuel, with a quandary.

From 2010 through 2012, the E.P.A. has required gradually higher levels of cellulosic fuel to be incorporated into motor fuel each year, for a total of 20 million gallons to date.

But actual production has been near zero.

While the mandate springs from a 2007 act of Congress meant to promote advanced biofuels to run cars and trucks, “we are not convinced that Congress meant for E.P.A. to let that intent color its work as a predictor, to let the wish be father to the thought,” the court wrote.

Bob Greco, the American Petroleum Institute’s director for downstream and industry operations, welcomed the decision, saying that the structure for setting the quota was flawed.

“There is no onus or accountability on the person who is producing the fuel,” he said of the emergent cellulosic fuel ventures in an interview. “They’re incentivized to pump up their projections via press release, and make rosy estimates because there’s no skin off their back if they fail to hit those.”

Then the E.P.A. sets quotas that are too high, he said.

The three-judge panel made a similar point in its decision. The cellulosic fuel rule is fundamentally different from other regulations, it said.

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