API sues EPA over biofuels mandate

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.