A lawsuit filed by Tesoro Refining and Marketing Company against the California Air Resources Board (CARB) seeking to prevent use of up to 10% ethanol in each gallon of gasoline sold in California will be dismissed with prejudice following the California Superior Court for the County of Sacramento’s rejection of the company’s bid for an injunction against CARB. California passed a mandate that increased the ethanol blend from 5.7 percent to 10 percent. Oil refiners and blenders have until the end of 2009 to comply with the mandate, and CARB is overseeing its compliance.

The Court had determined that The Renewable Fuels Association (RFA) would represent the ethanol industry regarding the case. “The injunction decision by the Court that Tesoro’s lawsuit lacked merit and the settlement to dismiss the case with prejudice clears the way for refiners in California to increase ethanol blending to 10 percent per gallon,” said RFA President Bob Dinneen.

The mandate was put in place to provide flexilibily for refiners to include up to E10 in reformulated gasoline as California continues forward with its legislation to improve air quality standards and reduce toxic emissions from gasoline. The state has also passed a low carbon fuels standard and the ethanol industry has been very active in working with CARB as they develop the standard.

“Tesoro’s claims were without merit and designed to impede open competition from a renewable alternative. The dismissal of this case is critical to a constrained ethanol market that is looking for increased demand. By moving from 5.7 percent to 10 percent ethanol in California gasoline, hundreds of millions of gallons of new demand will be created helping refiners meet federal and state requirements for renewable fuel use and air quality standards,” said Dinneen.