Two petroleum industry organizations have filed a lawsuit challenging an Environmental Protection Agency (EPA) decision to penalize oil refiners for not blending cellulosic ethanol into domestic fuels, even though significant amounts of the renewable fuel don’t exist.

The American Fuel and Petrochemical Manufacturers (AFPM) and the Western States Petroleum Association filed the suit after EPA recently denied a petition from the two groups and the American Petroleum Institute asking for a waiver of the 2011 cellulosic fuel requirements under the Renewable Fuels Standard (RFS).

The RFS requires refiners and importers to blend specific amounts of biofuels into the fuel supply or pay EPA for waiver credits. For 2011, the mandated amount of cellulosic biofuel was 6.8 million gallons.

“Congress gave EPA authority to waive RFS requirements when there is an inadequate supply of domestic biofuel,” says Rich Moskowitz, AFPM’s general counsel. “EPA’s waiver denial is contrary to Congress’ intent and forces refiners to purchase credits from EPA for cellulosic fuels that are not commercially available and amounts to a hidden fuel tax on consumers.”

“Someday cellulosic fuel may be available and may even be cost-effective, but today the fuel doesn’t exist,” adds Charles Drevna, AFPM president. “EPA’s denial of this waiver request is in poor judgment and a perfect example of the agency’s continuing war on fossil fuels.”