API said it welcomed a decision by the U.S. Court of Appeals rejecting a 2012 mandate for cellulosic biofuel, a product the trade group said wasn't commercially available.
"This absurd mandate acts as a stealth tax on gasoline with no environmental benefit that could have ultimately burdened consumers," API Director for Downstream and Industry Operations Bob Greco said in a statement.
The Environmental Protection Agency backed a mandate that would've required refiners to blend 36 billion gallons of biofuel into traditional fuel by 2022. More than half of that would've needed to come from cellulosic biofuels, made from non-edible feed stocks.
Unidentified sources from the biofuels industry told political news agency The Hill that the court's decision could keep investors on the sidelines. Some in the agricultural sector said the requirements would hurt them financially because of low corn yields brought on by drought.
When the EPA set the limits, however, the National Biodiesel Board said the use of biofuels would boost U.S. energy security that's vulnerable to extreme fluctuations on the global petroleum market.