Biofuel-blending battle rages on as EPA releases new projections

Biofuels groups said the goal reflects new production coming online, while API maintained it was too lofty.

The biofuels industry contended more cellulosic facilities came online at the end of last year, and that the industry output would reach commercial levels in 2013.

“U.S. EPA worked hard to ensure that the cellulosic biofuels volume standard for 2013 would be tied directly to the commercial production of cellulosic biofuels expected to come online this year,” Brooke Coleman, executive director with the Advanced Ethanol Council, said in a Thursday statement.

But API charged EPA’s projection is still too ambitious, as just about 21,000 gallons of cellulosic biofuel were produced last year.

The oil-and-gas lobby shop is concerned that its members will be forced to buy credits if enough cellulosic fuel is not produced, as has been the case in the past.

“The court recognized the absurdity of fining companies for failing to use a nonexistent biofuel. But EPA wants to nearly double the mandate for the fuel in 2013. This stealth tax on gasoline might be the most egregious example of bad public policy, and consumers could be left to pay the price. EPA needs a serious reality check,” API Downstream Group Director Bob Greco said in a Thursday statement.

The attack on the cellulosic biofuel target is just one aspect of API’s effort to tear down the biofuel mandate.

The rule requires refiners to blend 36 billion gallons of biofuel into traditional transportation fuel by 2022.

API wants Congress to repeal the rule, and is weighing other court challenges as well.

The biofuels industry is vehemently defending the mandate, saying any changes to it could deter investment. The industry contends API is mostly concerned about the rule’s accelerating blending targets cutting into oil profits.

Along with the cellulosic projection, EPA released targets for biomass-based biodiesel, advanced biofuels and total renewable fuels. Those marks were 1.28 billion gallons, 2.75 billion gallons and 16.55 billion gallons, respectively.

— This story was updated at 5:26 p.m.