Cellulosic Production (Still) Falls Woefully Short of Mandate

The EPA recently released updated Renewable Fuel Standard (RFS) data showing Renewable Identification Number (RIN) generation for the month of September. A RIN is a 38-digit number assigned to a gallon of ethanol that refiners use to demonstrate compliance with the RFS. The updated data show, once again, that the EPA’s mandate for the use of cellulosic biofuel is woefully out of touch with actual production levels.

The 2013 Renewable Fuel Standard (RFS) requires that refiners blend 6 million ethanol equivalent gallons of cellulosic biofuels into the fuel supply. However, the EPA’s report shows that the RINs generated from cellulosic biofuels will fall short of the requirement, potentially leaving refiners on the hook to pay significant fines because of the cellulosic industry’s shortcomings.

According to the EPA’s numbers, the biofuel industry generated 211,569 RINs for cellulosic biofuel from January through September of this year. This is well below the 6 million gallon requirement. With the end of the year approaching, the possibility of meeting the mandate is falling increasingly out of reach.

The EPA’s gross overestimate of cellulosic biofuel production is no surprise though, as the agency has consistently missed the mark on its production estimates. For example, the EPA’s 2012 RFS called for 8.65 million gallons of cellulosic biofuel, but only 20,069 gallons were actually produced.

The EPA’s phantom fuel mandate has not gone unopposed, however. Just recently, the American Fuel and Petrochemical Manufacturers (AFPM) and the American Petroleum Institute (API) filed lawsuits with the D.C. Circuit Court challenging the 2013 cellulosic biofuel mandate. API successfully challenged the 2012 mandate and the D.C. Circuit court found that the EPA “let its aspirations for a self-fulfilling prophecy divert it from a neutral methodology.”

It seems that the EPA has learned nothing from the court’s ruling, as they continue to let their ideological aspirations get in the way of reality. Despite the fact that the EPA’s past requirements for cellulosic biofuels have been unattainable, a recently leaked proposal shows that the agency is considering increasing the cellulosic biofuel requirement to 23 million gallons for 2014. If the biofuel industry cannot meet the 2013 requirement of 6 million gallons, and has failed for four years in a row to meet EPA’s cellulosic mandate, it is hard to imagine that 23 million gallons is an attainable requirement.

The cellulosic biofuel mandate is a perfect example of the EPA trying to create a “self-fulfilling prophecy” instead of neutral policymaking. It is unreasonable to require refiners to blend a fuel at levels that are non-existent, yet the EPA continues down this path. It is time EPA stops trying to create a cellulosic biofuel industry through mandates and instead allow the market to sort it out.

IER Press Secretary Chris Warren authored this post.

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