API Challenges 2013 RFS Cellulosic Volume Requirement

by Erin Voegele (Ethanol Producer Magazine) The American Petroleum Institute has filed a lawsuit challenging the U.S. EPA’s 2013 volume requirement under the renewable fuel standard (RFS), which was finalized in August. Representatives of the biofuels industry are calling the move frivolous.
The lawsuit was filed against the EPA in the D.C. Circuit Court on Oct. 8.
Harry Ng, API vice president and general council, called the 2013 mandate unrealistic, noting that that the requirements were finalized several months late. “EPA issued this year’s requirements nine months late and has once again mandated significantly more cellulosic ethanol than is available in the marketplace,” he said in a statement.
The API said that while the EPA has mandated refiners use 4 million gallons of cellulosic ethanol in 2013, only 142,000 gallons have been available for refiners to blend so far. “The 2013 mandates are an example of why EPA can’t be relied upon to implement the RFS effectively and in the interest of consumers,” Ng said. “Ultimately, Congress must fully repeal this unworkable and costly mandate.”
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In the final rulemaking, the EPA discussed its 2013 projections for cellulosic biofuel production, noting that Ineos Bio is expected to manufacture 4 million gallons of cellulosic ethanol this year. The EPA also said it anticipates that KiOR will produce 5.5 million physical gallons of cellulosic drop-in fuels, which equates to 9 million gallons on an ethanol equivalency basis. In addition, various pilot plants are expected to produce 100,000 gallons of cellulosic ethanol. Together, all three sources are expected to result in 13.1 million gallons of ethanol equivalent cellulosic biofuel production by the end of the year.
Bob Dinneen, president and CEO of the Renewable Fuels Association, has responded to the API’s announcement. “This is another frivolous effort by API to abuse the court system in their slavish effort to repeal a public policy that is working for farmers, gasoline marketers, and consumers,” he said. READ MORE and MORE (Platts) and MORE (Renewable Fuels Association) and MORE (Fuel Fix)

Excerpts from Fuel Fix: ... Through its year-old refinery unit, Monroe Energy, Delta is mounting its own legal and lobbying challenge to the 8-year-old renewable fuel standard, joining a battle led for years by the oil industry’s top trade groups.
Monroe has filed a lawsuit in the U.S. Court of Appeals for the District of Columbia Circuit broadly challenging the renewable fuel requirements the Environmental Protection Agency established for 2013. Refiners have until June 30 to prove they have complied with this year’s biofuel quotas.
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Because Monroe is a “merchant refiner” that generally sells unblended products to wholesale marketers, it doesn’t produce its own credits by blending in renewable fuels and instead must buy the credits to satisfy the mandate.
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The issue has bedeviled Delta and Monroe, following the airline’s April 2012 purchase of the Trainer refinery complex near Philadelphia from Phillips 66. Under the deal, Delta agreed to swap the refinery’s gasoline, diesel and other products for jet fuel produced elsewhere by Phillips 66 and BP.
In reporting its second-quarter earnings, Houston-based Phillips 66 said it benefited from selling compliance creditsbecause it has the facilities to blend biofuels.
Delta, however, blames renewable fuel standards costs for its $51 million loss on the Trainer refinery during the second quarter and may be on track to spend more buying the renewable identification numbers than it paid for the plant in the first place. READ MORE