Let us explain. The American Petroleum Institute, in response to the Environmental Protection Agency's ratcheting up US biodiesel production mandates, has sued the EPA, calling the regulator's new rules "overzealous" and "unworkable." The EPA is mandating the production of 1.28 billion gallons of biodiesel next year, up from 1 billion this year.
The API, which filed its lawsuit in the US Court of Appeals for Washington DC, added that the new mandate will create costs that are $425 million more than the benefits. The API also brought up three biodiesel companies that the EPA busted for submitting invalid renewable fuel credits.
The EPA in September approved the 28-percent increase in mandated production of biodiesel, which represents biofuels made from biomass sources such as vegetable oils and waste oils from renewable sources. The EPA had boosted the mandate this year by 25 percent to 1 billion gallons.
Meanwhile, the Renewable Fuels Association, an advocacy group for biofuels, says the lawsuit is a smokescreen for concerns over a potential drop in demand for petroleum. The RFA, in a statement Tuesday, called the lawsuit a "dog bites man" scenario. Read the API's press release below.
WASHINGTON, November 27, 2012 – The American Petroleum Institute (API) filed a lawsuit in the U.S. Court of Appeals for the District of Columbia late Monday against the Environmental Protection Agency (EPA) for its decision to mandate the use of 1.28 billion gallons of biodiesel in 2013, a 28 percent increase from the 2012 requirement. API also filed a petition for administrative reconsideration of the 2013 biodiesel mandate with EPA.
"EPA's overzealous 2013 biodiesel mandate is unworkable, could raise the costs of making diesel fuel, and should be reduced," said Bob Greco, API group downstream director. "In its final rule, EPA admitted the costs of increasing the biodiesel volume requirement for 2013 outweighed the benefits by as much as $425 million. Furthermore, fraudulent biofuel credits that have plagued the system since last year and have yet to be resolved could inhibit industry's ability to meet EPA's higher biodiesel mandate."
EPA has uncovered more than 140 million invalid renewable fuel credits, known as RINs, generated by three biodiesel companies, representing between 5 and 12 percent of the biodiesel market.
"The fraudulent RIN problem is having, and will continue to have, significant impacts on the biodiesel marketplace that make it more difficult for companies to comply with EPA's mandate," Greco said.
API is a national trade association that represents all segments of America's technology-driven oil and natural gas industry. Its more than 500 members – including large integrated companies, exploration and production, refining, marketing, pipeline, and marine businesses, and service and supply firms – provide most of the nation's energy. The industry also supports 9.2 million U.S. jobs and 7.7 percent of the U.S. economy, delivers $86 million a day in revenue to our government, and, since 2000, has invested over $2 trillion in U.S. capital projects to advance all forms of energy, including alternatives.