A US appeals court in Washington has rejected the Environmental Protection Agency’s (EPA) 2012 mandate that stipulated use of cellulosic biofuel by refiners.

The rule was overturned as the three-judge panel took cognizance of the unavailability of cellulosic biofuels for commercial purposes.

US biofuel producers generated just 20,000ga of advance biofuel in 2012 wherein the EPA sought refiners to employ 8.65m gallons.

"Apart from their role as captive consumers, the refiners are in no position to ensure, or even contribute to, growth in the cellulosic biofuel industry," the court said in a 14-page ruling.

Fuel refiners in the US were liable to pay $8m to cover for failing to meet the 8.5m gallons of cellulosic biofuel mandate.

American Petroleum Institute director Bob Greco remarked that the ruling will force the EPA to adopt a more pragmatic approach towards future mandates.

"The court has provided yet another confirmation that EPA’s renewable fuels program is unworkable and must be scrapped," added Greco.

The EPA is yet to issue its 2013 mandate, but the process may face hurdles given the court’s decision.