* Industry expects another cut in cellulosic target
* EPA slashed cellulosic target in 2011 fuels mandate
By Ayesha Rascoe and Timothy Gardner
WASHINGTON, June 21 The U.S. Environmental
Protection Agency is set to unveil next year's mandate for
renewable fuels as soon as Tuesday, likely cutting back the
target for making the fuel from cellulosic sources for a second
year, industry and agency sources said.
While the 2012 target to produce 13.2 billion gallons (60
billion litres) of corn-based ethanol are unlikely to be much
altered since the industry is already exceeding the volume, the
second-generation biofuel producers have failed to thrive due
expensive enzymes needed to make the advanced fuel.
As a result, biofuel industry officials expect the agency's
proposal to again cut the mandate for advanced biofuels, such
as cellulosic ethanol, versus the government's original
"Production of these fuels is not yet sufficient to meet
the statutorily prescribed volumes in the (Renewable Fuel
Standard)," said Matt Hartwig, of the Renewable Fuels
The agency's proposal for the 2012 Renewable Fuel Standard
is "very close" to being ready, an agency source told Reuters.
The ethanol industry hopes to make commercial quantities of
cellulosic fuel from non-food feedstocks including grasses,
wood chips and agricultural waste.
But expensive enzymes needed for that process and other
hurdles have made that a challenge, leaving the industry
dependent on the corn crop, which critics say is driving up
Cellulosic fuel was supposed to make up 500 million gallons
of the renewable fuel mandate next year based on the
government's original target.
The EPA already slashed the target for cellulosic fuel use
in 2011, cutting it to 6.6 million gallons, far less than the
250 million gallons originally required.
The cellulosic target was a key part of the decision making
and if that target changed, it could also change the target
slightly for traditional biofuels made from grain, the agency
The 2012 target for traditional biofuels, which is mostly
made from corn in the United States, is supposed to be 13.2
billion gallons. The RFA expected that this target would remain
U.S. lawmakers in the Senates overwhelmingly voted for an
amendment to slash the support payments and the tariff wall
that protects the sector, just as criticism mounts globally
that using food to produce to fuel is driving up prices.
(Reporting by Ayesha Rascoe; Editing by Marguerita Choy)