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EPA Seeks Use of 6.6 Million Gallons of Cellulosic

Nov. 29 (Bloomberg) -- U.S. refiners should blend 6.6 million gallons of cellulosic ethanol with gasoline next year under the Renewable Fuels Standard, the Environmental Protection Agency said today.

That form of the alternative fuel is considered superior to the current grain-based one because it is derived from non-food crops such as switchgrass, corn cobs and wood waste.

In February, the EPA slashed the cellulosic ethanol mandate for this year by 94 percent, reducing the goal to 6.5 million gallons from the 100 million required under a 2007 energy law, citing the lack of commercial-scale production.

“Based on an analysis of expected market availability, EPA is finalizing a lower 2011 cellulosic volume than the statutory target,” the agency said. “Overall, EPA remains optimistic that the commercial availability of cellulosic biofuel will continue to grow in the years ahead.”

The 2007 law, which gave the agency the authority to develop the rules, calls for the nation to use 12 billion gallons of renewable fuels such as ethanol this year and 15 billion gallons of corn-based forms of the fuel by 2015. The U.S. is to use 36 billion gallons of renewable fuels by 2022.

Ethanol industry advocates said the lower target deters investment that would allow the fuel to become more commercially available.

“There’s no question that the potential for cellulosic ethanol remains on track and that is why it is so important to have real targets to give confidence that there will be a market for those who are investing in the industry,” Stephanie Dreyer, a spokeswoman for Growth Energy, an ethanol trade group, said in an e-mailed statement.

Poet LLC, based in Sioux Falls, South Dakota, is the largest U.S. ethanol producer, followed by Decatur, Illinois-based Archer Daniels Midland Co.

To contact the reporter on this story: Mario Parker in Chicago at mparker22@bloomberg.net

To contact the editor responsible for this story: Dan Stets at dstets@bloomberg.net

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