Renewable Fuel Standard Changes Pass Scrutiny

(CN) - An oil refinery did not present a sound objection to changes of the federal renewable-fuel standards, the D.C. Circuit ruled.

Established in 2005, the Renewable Fuel Standards program mandates the gradual introduction of renewable fuels into the U.S. supply of gasoline and diesel.

Each year's total volume of renewable fuel must contain a certain percentage of "advanced biofuel," which includes biomass-based diesel and cellulosic biofuel.

The obligation to meet these quotas falls on the refiners and importers of fuel, who must introduce a certain percentage of renewable fuel, usually corn ethanol, into the U.S. market based on the amount of nonrenewable fuel they sell.

But some critics of the program say that the rules may force refiners to sell more renewable fuel than that for which there is a market, especially given that the "E10 blendwall" prevents many older cars from handling gasoline consisting of more than 10 percent ethanol.

Monroe Energy, an oil refiner, sued the Environmental Protection Agency for declining to reduce the 2013 total renewable fuel quota, which it claims exceeds that which the market can absorb.

Low anticipated production did lead the EPA to reduce the quota for cellulosic biofuel in 2013 from 1 billion to 14 million gallons. It has done the same in the prior three years because the industry has not developed as rapidly as Congress expected.

Nevertheless, "EPA determined that although production of cellulosic biofuel would be much lower than the statutory volume, the resulting shortfall in the advanced biofuel category could be made up using other types of advanced biofuel, particularly biomass-based diesel and imported sugarcane ethanol," Judge Judith Rogers wrote for a three-judge panel. "This conclusion was supported by substantial evidence, including production estimates for biomass-based diesel, consideration of incentives produced by the reinstatement of the biodiesel tax credit, and an analysis of sugarcane ethanol trade with Brazil."

As such the court denied Monroe's petition for review.

The 20-page ruling also notes that Monroe may purchase credits from another refiner to ensure its compliance with the EPA regulations if it cannot meet the advanced biofuel quota itself.

"Even assuming that the E10 blendwall imposes a firm cap on ethanol consumption, maintaining the statutory requirement for total renewable fuel would promote the use of non-ethanol renewable fuels such as biodiesel," Rogers said (emphasis in original).

This aligns with Congress' intent to improve energy security and reduce greenhouse gases, the court found.

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