The Obama administration Monday conceded that cellulosic ethanol producers won't come close to hitting a congressional target to deliver 250 million gallons of fuel next year made from grasses and other vegetation not used for food.
The Environmental Protection Agency set at 6.6 million gallons the amount of cellulosic ethanol that must be blended into vehicle fuels in 2011. The EPA set the target as part of an annual process for implementing a 2007 law that orders oil companies to blend in an ever-increasing amount of renewable fuel into the gasoline and diesel supply. Overall, some 13.95 billion gallons of biofuels are supposed to be blended into motor vehicle fuels next year, accounting for about 8% of total fuel consumption.
Congress had mandated that 250 million gallons of cellulosic ethanol be added next year, but without any large-scale commercial plants, the supply isn't available. The U.S. Energy Department has yet to approve a loan guarantee for one of the biggest planned projects, which is backed by oil company BP PLC.
"By reducing the standard for cellulosic biofuels, EPA is accurately reflecting the difficulties cellulosic biofuel technologies have encountered in obtaining the capital needed to fully commercialize," Bob Dinneen, president of the Renewable Fuels Association, said in a statement. "However, being aware of this fact, EPA should have been and must be careful to keep cellulosic biofuel targets ambitious so as to stimulate the kind of investment these technologies need to finish commercialization."
Refiners can't use ethanol produced from corn to make up for the shortfall in cellulosic ethanol. Only other fuels that count as advanced biofuels qualify. A total of 1.35 billion gallons of advanced biofuels must be added to the fuel supply next year.
Congress has yet to act on extending a 45 cents a gallon tax credit for ethanol that expires at the end of the year.