What is in this article?:
- Successful Legal Challenge to Renewable Fuel Standard Likely to Have Minimal Long-Term Impact on Biofuels
- The Court Challenge to the 2012 Cellulosic Biofuel Mandate
The Energy Independence and Security Act of 2007, commonly referred to as EISA, amended the Federal Renewable Fuel Standard (RFS) by mandating specific quantities and types of renewable transportation fuels for each year – known as the yearly "applicable volume." The applicable volume for a particular fuel (conventional biofuel, advanced biofuel, cellulosic biofuel, biomass-based diesel) determines the quantity fuel refiners, importers and blenders much purchase each year. The below graph illustrates the statutory legal requirements for renewable transportation fuels under the RFS.
The legislative standard, however, is only the first step in setting the actual yearly renewable transportation requirements. Because the volumetric requirements established by Congress in EISA assumed significant innovation in the cellulosic biofuel industry, Congress created an escape hatch in which the Environmental Protection Agency (EPA) can reduce the mandated quantity of advanced and cellulosic biofuel based on the projected production by the nascent industry. If the projected production volume of advanced and cellulosic biofuel for a year is less than the statutorily mandated volume, the EPA is required to reduce the applicable volume that fuel refiners, importers and blenders much purchase each year. The rationale behind this safety valve is that petroleum refiners are dependent upon the biofuel industry to produce advanced and cellulosic biofuels for them to purchase and blend into their product. If there is no biofuel to purchase, the refiners in essence have no option other than to miss the mandate and pay the accompanying penalty. As illustrated below, for each year of the RFS, the EPA has reduced the cellulosic biofuel applicable volume due to a lack of production capacity.