An oil refiner has dropped a lawsuit against the California Air Resources Board (CARB) challenging a regulation that would boost ethanol consumption in the state by 2010.

According to a story in the Sacramento Business Journal, Tesoro Corporation dropped the lawsuit after a judge denied the company’s request for a temporary injunction to delay a new gasoline standard set to take effect next year which would increase the percentage of ethanol required to be blended into gasoline sold in California from 5.7 percent to 10 percent. The company claims that the standard is in conflict with a state law that calls for a decrease in greenhouse gas emissions because some studies suggest the production of ethanol increases greenhouse gas emissions.

The paper reports that Judge Timothy Frawley said he was not persuaded that Tesoro would prevail on the merits of its case at trial or that the company would suffer “irreparable harm” from the new standard. He also said a 1999 environmental evaluation that assessed impacts of using ethanol in amounts up to 10 percent was sufficient to meet state health code.

Tesoro is an independent oil refining and marketing company which operates two refineries in California.