Court denies challenge to EPA ethanol ruling

A federal court on Tuesday preserved an Environmental Protection Agency (EPA) ruling that permits the sale of a high-ethanol fuel blend.

The U.S. Court of Appeals for the District of Columbia denied a rehearing on the EPA decision that put fuels with a 15-percent ethanol concentration, known as E15, on the market.

The development is a win for the biofuels industry, which also is fighting off a lobbying effort against E15 and a biofuel blending mandate vital to the industry.

“[T]his is a major victory for the renewable fuels industry and opens the door for further investment in new fueling technology to offer E15 to consumers,” Tom Buis, chief executive with biofuels trade group Growth Energy, said in a Tuesday statement.

The court decision is a setback for the oil-and-gas industry, which opposes the use of E15.

While EPA has said cars made in 2001 or later can safely use E15, the oil-and-gas industry contends it harms vehicles. It warns that most auto companies can or will void warranties for E15-related damage.

"We remain concerned that EPA’s partial waiver will result in significant misfueling and will harm consumers. EPA has authorized the sale of an ethanol blend that virtually every automobile manufacturer has warned will damage existing vehicles," Rich Moskowitz, general counsel with the American Fuel and Petrochemical Manufacturers, said in a statement.

Getting E15 more widely available would also help the biofuels industry meet rising blending targets established by the renewable fuel standard. But E15 is currently sold at only a handful of gas stations across the country.

That blending mandate requires refiners to blend 36 billion gallons of biofuels into traditional transportation fuels by 2022.

The oil-and-gas industry calls that need for E15 the "blend wall." The American Petroleum Institute is pushing Congress to repeal the mandate largely to avoid reaching that threshold.

Opponents of the mandate say it unfairly props up the biofuels industry at the expense of traditional fuels. Supporters, however, argue that repeal would chill investment in new energy technologies.

Read more on the blending mandate here.

— This story was updated at 4:38 p.m.