EPA retroactively lowers biofuel requirement for 2013

The Environmental Protection Agency (EPA) on Tuesday retroactively lowered the volume of cellulosic biofuel that refiners must blend into traditional fuels, aligning the 2013 mandated volume to the actual amount of fuels produced.

EPA’s original mandate for 2013 was based on a projection that producers would make 6 million ethanol-equivalent gallons of cellulosic biofuel, but just over 800,000 gallons of the fuels were actually produced that year, the agency said. Tuesday’s action sets the cellulosic biofuel blend level at 0.0005 percent, reflecting the amount of fuel produced.

Cellulosic biofuels are made from inedible parts of plants, such as wood or grass. EPA's action does not affect mandates for other renewable fuels, such as corn-based ethanol.

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The year is over, but EPA’s revision means that refiners will not have to use credits or pay penalties for not reaching the target.

EPA said its 6 million-gallon target was a projection of the amount of fuel that would be made. But shortly after issuing the mandate in August 2013, Kior Inc., one of the two cellulosic biofuel producers in the United States, sharply reduced its output.

The American Petroleum Institute and American Fuel & Petrochemical Manufacturers petitioned EPA to reconsider its mandate based on Kior’s expected output, petitions that EPA granted.

“Since the cellulosic biofuel standard was based on EPA’s projection of cellulosic biofuel production in 2013, EPA deemed this new information to be of central relevance to the rule, warranting reconsideration,” EPA said in its rule, noting that now that the year is over, its “projection” can be based on actual production.

API said EPA’s revision shows deeper problems with the Renewable Fuel Standard.

“EPA should base its cellulosic mandates on actual production rather than projections that — year after year — have fallen far short of reality,” Bob Greco, director of API’s downstream group, said in a statement.

“It’s time for Congress to stop the insanity and repeal the unworkable Renewable Fuel Standard,” he said.

The Tuesday action will be published soon in the Federal Register as a “direct final rule,” since EPA does not consider it to be controversial. If no one submits comments to EPA objecting to it, it will take effect immediately. But if EPA receives any negative comments, it will have to consider them before making the rule final.