On Jan. 25, the U.S. Court of Appeals for the District of Columbia Circuit rejected a challenge by the American Petroleum Institute (API) to reduce the Advanced Biofuels volume requirement under the Renewable Fuel Standard (RFS). API argued against the cellulosic requirement citing the fact that it is not yet commercially produced at sufficient levels to meet the RFS.
The court issued a mixed ruling on the cellulosic biofuels portion of the RFS. The decision is favorable to the biodiesel industry as it maintains the "undifferentiated" advanced biofuel pool that is expected to be at least partially filled by U.S. biodiesel in 2013.

The National Biodiesel Board intervened in the case in defense of the U.S. Environmental protection Agency (EPA) and the RFS, particularly on the advanced biofuels requirement. The case involved the 2012 standards, and the court specifically upheld EPA's authority to maintain the "Advanced Biofuels" program, even if the "Cellulosic Biofuels" program is reduced.

With regard to the Cellulosic Biofuels requirements, the court determined that the EPA has the authority to set it at a reasonable volume so long as EPA's determination of the volume requirement is adequately grounded. As a result, the court vacated the specific 2012 volume, ruling that the requirement was not sufficiently grounded in facts regarding expected production.

Regarding the Advanced Biofuels requirement, the court stated: "The [EPA] adequately grounded its determination in historical data on sugarcane ethanol imports and biodiesel production, as well as governmental and non-governmental projections for future production of those fuels. ... We find especially relevant EIA's projection of 300 million gallons of sugarcane ethanol imports for 2012 and EPA's estimation of 2.4 billion gallons in U.S. biodiesel production capacity. ... These data plausibly suggest that some combination of the two sources of advanced biofuels will be available to make up for the shortfall in cellulosic biofuel. Moreover, in sharp distinction with cellulosic biofuel, there appears to be no great obstacle to the production of advanced biofuel generally."

EPA has not yet issued the 2013 required volumes for cellulosic or the overall Advanced Biofuels requirement. EPA has set the biomass-based diesel volume requirements for 2013 at 1.28 billion gallons. The statute calls for a total of 2.75 billion gallons of Advanced Biofuels in 2013. After the 1.28 billion gallons of biomass-based diesel, 1.47 billion gallons of Advanced Biofuel volumes would remain to be filled. If not waived by EPA, the additional Advanced Biofuels gallons would likely be filled by biomass-based diesel and/or sugarcane ethanol imported from Brazil.