Trump may have to boost biofuel

The Trump administration may have to reconsider its proposal from earlier this month to curb biofuel use after a U.S. appeals court in Washington ruled that the Environmental Protection Agency doesn’t have the authority to cut quotas while citing inadequate domestic supply.

Issued Friday, the unanimous ruling by a three-judge panel comes amid conflicting legal challenges to actions taken by the EPA. Some factions claim the agency set renewable fuel requirements too high, while others said they’re too low. Shares of ethanol producers rose on the news while refinery stocks declined.

U.S. Circuit Judge Brett Kavanaugh wrote that EPA isn’t allowed “to consider the volume of renewable fuel that is available to ultimate consumers or the demand-side constraints that affect the consumption of renewable fuel by consumers.”

The ethanol industry hailed the court’s move as a victory. Earlier this month, the Trump administration issued a proposal that for the first time would cut the amount of renewables that must be blended into the fuel supply under a 12-year-old law known as the Renewable Fuel Standard.

The court ruling is a blow to oil refiners, including billionaire Carl Icahn, who have argued that there are constraints to blending the fuels into petroleum. The American Petroleum Institute said in a statement it was “disappointed” with the court’s decision, which the trade group said highlighted the need for congressional action to reform the renewable fuel standard.

“We are still reviewing the decision, but the fact the court has affirmed our position that EPA abused its general waiver authority by including factors such as demand and infrastructure in a waiver intended to be based solely on available supply is a great victory for consumers and the RFS program,” said Bob Dinneen, the chief executive officer of the Renewable Fuels Association, an ethanol industry trade group.