WASHINGTON, JAN. 25, 2013 - A federal appeals court ruled today that the Environmental Protection Agency (EPA) must revise its cellulosic biofuel projections for 2012, granting a partial victory to the American Petroleum Institute (API), which had challenged the agency’s rulemaking.

However, biofuel advocates said the court’s decision was also a victory for EPA because of the decision not to reduce the total volume of advanced biofuels that refiners, importers and blenders are expected to purchase in order to meet requirements under the Renewable Fuel Standard (RFS).

In an opinion for the three-judge court, Senior Judge Stephen Williams said the court agreed with API that the 8.65 million gallons number was based on open-ended projections rather than adhering to the language contained in the Energy Policy Act of 2005 and later amended by the Energy Independence and Security Act of 2007.

“While the program as a whole is plainly intended to promote that technology, we are not convinced that Congress meant for EPA to let that intent color its work as a predictor, to let the wish be the father of the thought,” Williams wrote.

Biofuel advocates who had intervened in the litigation described the decision as “mixed,” while also voicing strong disagreement over the court’s interpretation of EPA’s actions.

“EPA did not determine a reasonably achievable volume and then inflate it. Rather, it set the volume based on the best information available to it at the time.  Regardless, under the D.C. Circuit’s decision, EPA is free to reinstate the volumes that it had established, as long as the information available at the time would support the agency’s conclusion that those volumes were reasonably achievable.  The court’s decision does not now require, or permit, EPA to set volumes based on hindsight,” the groups noted in a joint statement. The biofuel organizations include the Advanced Biofuels Association (ABFA), Advanced Ethanol Council (AEC), American Coalition for Ethanol (ACE), Biotechnology Industry Organization (BIO), Growth Energy, and Renewable Fuels Association (RFA).

They are reviewing the court’s decision and assessing next steps in the matter.

The National Biodiesel Board issued the following statement Friday applauding the U.S. Court of Appeals for the District of Columbia Circuit for upholding the advanced biofuels requirements under the Renewable Fuel Standard (RFS):

"This is just the latest in a series of cases in which the oil industry has tried unsuccessfully to re-litigate the standards for renewable fuels, and it is yet another victory for our nation's shift toward cleaner, more diverse energy supplies," said Anne Steckel, vice president of federal affairs for the National Biodiesel Board. "The fact is that the RFS is a very effective program for improving U.S. energy security, creating jobs and reducing greenhouse gas emissions. We look forward to working constructively with our partners in the petroleum industry to meet these goals moving forward."

API welcomed today’s decision.

“We are glad the court has put a stop to EPA’s pattern of setting impossible mandates for a biofuel that does not even exist,” said API Group Downstream Director Bob Greco. “This absurd mandate acts as a stealth tax on gasoline with no environmental benefit that could have ultimately burdened consumers.”