U.S. refiners and fuel marketers continue to face a dilemma: The Environmental Protection Agency (EPA) mandates blending of cellulosic ethanol into gasoline under its Renewable Fuel Standard (RFS).

Problem is, there isn’t any. A recent Christian Science Monitor article likened the mandate to forcing automakers to sell unicorns.

The 2007 RFS rule required the use of 100 million gallons of cellulosic ethanol in 2010 with rapid volume increases in outlying years, although the agency later reduced those numbers. There are penalties for noncompliance. But in fact, no cellulosic ethanol was even made until 2012 and then only slightly more than 20,000 gallons— compared to the millions of gallons required to be purchased by the mandate, the Monitor article points out.

The American Petroleum Institute sued the EPA in March 2012 to halt the required purchases, and the U.S. Court of Appeals for the District of Columbia ruled in the industry’s favor earlier this year. But a few days later, the EPA increased its cellulosic ethanol mandate for 2013 anyway.

“The court recognized the absurdity of fining companies for failing to use a nonexistent biofuel,” Bob Greco, downstream group director for API said in a statement. “But EPA wants to nearly double the mandate for the fuel in 2013. This stealth tax on gasoline might be the most egregious example of bad public policy, and consumers could be left to pay the price. EPA needs a serious reality check.” He added that the RFS “is unworkable and must be scrapped.”

Almost all of the alcohol currently blended into U.S. gasoline comes from corn fermentation and distillation. Cellulosic ethanol is produced from wood, citrus peels, grasses and other plant matter but requires substantially more processing than cornbased ethanol.

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