The EPA cut its requirement for the use of cellulosic biofuel last year by more than 80 percent after the industry failed to meet production goals, Reuters reports.
EPA had required 6 million gallons in a plan it finalized last August, but that was reduced to 810,000 this week in a new rule.
The oil industry challenged the plan for the biofuel made from cellulosic ethanol after one of two companies in the industry reduced its production estimates.
The EPA has agreed to reconsider the mandate that would have required oil refiners to buy credits if cellulosic biofuels were not available.