Oil lobby sues EPA for biofuels requirement

The American Petroleum Institute (API) said EPA is penalizing refiners for failing to meet cellulosic bifouels quotas outlined in EPA's renewable fuel standard (RFS). 

In a lawsuit filed Tuesday with the D.C. Circuit Court, the group argues the quotas set an unrealistic goal because no cellulosic biofuels are produced at commercial scale in the United States.

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"EPA's unattainable and absurd mandate forces refiners to pay a penalty for failing to use biofuels that don't even exist," Bob Greco, API director of downstream and industry operations, said Wednesday in a statement. "The mandate is effectively an added tax on gasoline manufacturers that could ultimately burden consumers."

The RFS requires domestic production of 36 billion gallons of biofuels by 2022. About 21 billion gallons of that are expected to come from cellulosic, or "next generation," biofuels.

EPA required gas and diesel importers and refiners to use or buy credits covering 6.6 million gallons of cellulosic biofuels, API said.

EPA denied API's petition of that part of the rule in May.

When the RFS was updated in 2007, cellulosic biofuels were expected to come online within a handful of years. But the economic recession slowed credit, stifling the growth of that industry, biofuels supporters have said.