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Ethanol and farm groups sue California over fuel standard

Agriculture.com Staff 12/29/2009 @ 1:14pm

The ethanol trade groups, Growth Energy and the Renewable Fuels Association, along with state and local farm groups, have filed a federal lawsuit challenging Calfornia's low carbon fuel standard. The groups' lawsuit alleges that the new rule, which will be phased in starting in 2011, unfairly discriminates against corn-based ethanol made primarily in the Midwest, in violation of the Commerce and Supremacy clauses of the U.S. Constitution.

The complaint, filed in federal district court in Fresno, California on December 24, says the fuel standard "is unconstitutional because (i) it conflicts with and is preempted by federal law, including the Energy Independence and Security Act of 2007; (ii) it interferes with the regulation of interstate commerce; and (iii) it discriminates against out-of-state corn ethanol producers and importers and improperly regulates their extraterritorial conduct."

The lawsuit, which was also brought by Rocky Mountain Farmers union, the Redwood County, Minnesota Corn and Soybean Growers, and Penny Newman Grain, Inc., was filed against the California Air Resources Board, which is part of the California Environmental Protection Agency.

Stanley Young with the Air Resources Board told Agriculture.com Tuesday, "We feel that their claims are without merit. This is a regulatory decision to provide cleaner, low carbon fuels to California consumers and we will vigorously defend it in court."

The goal of the new low carbon fuel standard is to encourage fuel blenders to use fuels that put out lower levels of greenhouse gases in production, transportation and when burned in vehicles. Before the Air Resources Board approved the fuel standard last April, its estimates of how green a fuel is included the concept of indirect land use. It assumed that as more corn is used to make ethanol in the U.S. that rainforests and tropical savannahs will be destroyed in other countries in order to grow more crops.

The lawsuit alleges that the fuel standard "penalizes all corn ethanol based on the purported indirect effects of assumed farming practices that occur predominately outside California and through the regulation, California seeks to curb or eliminate these farming practices throughout the United States and beyond by making the entire corn ethanol market responsible for them."

The fuel standard also assumes that ethanol made from sugar cane in Brazil is greener. The effect of the new fuel standard, the lawsuit says, "will be to required regulated entities producing gasoline for sale in California quickly to try to obtain ethanol produced in Brazil, not the United States."

At the federal level, the EPA is also using indirect land use to estimate how green ethanol is, but the federal 2007 energy law exempts older ethanol plants from meeting tougher greenhouse gas requirements under a new renewable fuel standard. California does not and the lawsuit alleges that the state’s fuel standard interferes with the federal law.

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