The D.C. Circuit Court of Appeals has vacated U.S. Environmental Protection Agency (EPA) rules setting minimum requirements for blending cellulosic ethanol into the nation’s fuel supply. Am. Petroleum Inst. v. EPA, No. 12-1139 (D.C. Cir. 1/25/13).

Cellulosic ethanol is an “advanced biofuel” made from lignocelluloses derived from materials such as corn stover, switchgrass and miscanthus grass species, and wood chips. EPA had required that petroleum refiners blend 8.65 million gallons of cellulosic biofuel into the gasoline supply in 2012, despite zero gallons actually produced in either 2010 or 2011; the industry was able to produce only about 20,000 gallons of such ethanol in 2012.

The court held that EPA’s cellulosic ethanol requirement exceeded its statutory authority because it was not based on a projection that aims at accuracy. According to the court, EPA could not enact a rule that would punish refiners if inadequate cellulosic ethanol is produced to meet the requirement, because “the refiners are in no position to ensure, or even contribute to, growth in the cellulosic biofuel industry.” By saying, in effect, “Do a good job, cellulosic fuel producers. If you fail, we’ll fine your customers,” the rule stepped outside the bounds of previously approved EPA technology-forcing rules.