U.S. EPA approves new fuels for federal biofuel mandate

WASHINGTON, July 2 Wed Jul 2, 2014 5:58pm EDT

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WASHINGTON, July 2 (Reuters) - The U.S. Environmental Protection Agency on Wednesday expanded the types of fuel that can be used to satisfy the federal biofuel mandate, a move that could play a role in the agency's delayed targets for 2014 renewable fuel use.

The EPA finalized a plan allowing compressed natural gas and liquefied natural gas produced using biogas from landfills, manure digesters and sewage treatment plants to qualify as cellulosic biofuel, fuel typically derived from sources like grasses and wood.

Electricity generated from biogas and used to power electric vehicles would also qualify to meet the cellulosic portion of the federal biofuel mandate.

"These pathways have the potential to provide notable volumes of cellulosic biofuel for use in complying with the (Renewable Fuel Standard) program, since significant volumes of advanced biofuels are already being generated for fuel made from biogas," the EPA said.

The approval of new sources of cellulosic biofuels could have an impact on EPA's final biofuel targets for 2014, the agency said.

Cellulosic biofuels were supposed to make up a growing portion of the Renewable Fuel Standard, which requires use of increasing amounts of biofuels in U.S. gasoline and diesel supplies through 2022. But production of the fuel on a commercial scale is still next to nothing.

EPA has repeatedly slashed federal targets for cellulosic biofuel and proposed to require the use of 17 million gallons in 2014, less than 1 percent of the 1.75 billion gallons called for by the Energy Independence and Security Act of 2007.

Broadening the definition "shows that the Renewable Fuel Standard is a flexible policy, it's not just about ethanol," said Jeremy Martin, a senior scientist for the Union of Concerned Scientists' clean vehicles program.

After the EPA missed a self-imposed June deadline, the agency's final 2014 targets are now expected to be released some time before the end of September.

The EPA on Wednesday also finalized a voluntary quality assurance program to help prevent the sale of fraudulent biofuel credits, known as RINs. In recent years, massive cases of fraud have roiled the market for these credits, which are used by refiners to comply with the federal biofuel law.

The new program will use audits by independent third parties to ensure the credits are legitimate.

Both final rules can be read here: 1.usa.gov/VG21E6 (Reporting by Ayesha Rascoe; Editing by Ros Krasny and Mohammad Zargham)

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