The U.S. Environmental Protection Agency (EPA) issued its proposal for 2012 requirements under the Renewable Fuel Standard (RFS).

As expected, EPA reduced the statutorily required cellulosic biofuel amount per the federal requirement that it assess the capacity of the cellulosic biofuel industry annually and set the RFS accordingly.

The proposed range for the 2012 requirement for cellulosic biofuel is 3.45-12.9 million gallons. The EPA proposes to maintain the 2012 advanced biofuel requirements under the RFS at 2 billion gallons as federal law requires.

The mandate for convention renewable biofuel also remained consistent with the statute at 13.2 billion gallons. The overal RFS requirement of 15.2 billion gallons of renewable fuel was unchanged. The final RFS volumes will be issued by EPA in November 2011 after a public comment period.

While acknowledging that EPA was required to make its downward revisions, the Advanced Ethanol Council Executive Director Brooke Coleman issued the following statement:

"America's advanced and cellulosic ethanol industry is rapidly progressing with many technologies proven and biorefinery projects shovel-ready. Yet, advanced biofuel producers continue to sail into a head wind created by tax policy favoring oil and gas. There is no question that the RFS is a forward-looking policy that will drive significant usage of cellulosic biofuels once the industry hits the requisite production levels. America needs the same kind of forward-looking tax policy to ensure these technologies can commercialize and compete in marketplace where oil production is still subsidized.

"The most immediate term solution to this problem is to enact meaningful and long-term tax incentives to spur construction of the first-commercial advanced biofuel plants, in much the same way that Congress has stood behind oil and gas production for nearly 100 years.

American consumers can no longer afford to be dependent on foreign oil. It is a jobs issue. It is a deficit issue. And it is one of the primary causes of the economic woes facing this country.

"The cellulosic and advanced ethanol industry will hit the mark and achieve the goals of the RFS if Congress aligns our tax code with the RFS and sends a clear message to the marketplace that advanced biofuels will be a cornerstone of a broader strategy to create jobs and reduce oil dependence."