A U.S. federal court on Friday struck down a 2012 target for refiner use of cellulosic biofuels, but upheld the government's goal for use of other advanced fuels.

The divided ruling by the D.C. Circuit Court allowed oil refiners to claim a partial victory after fighting against U.S. renewable fuel targets. But it also gave hope to biofuel producers, who have been defending the mandates.

The American Petroleum Institute filed a lawsuit against the Environmental Protection Agency's 2012 target, requiring refiners to mix 8.65 million gallons of cellulosic biofuels into the U.S. gasoline and diesel.

Cellulosic biofuels are made from sources such as grasses, wood chips and agricultural waste.

When Congress passed the Renewable Fuel Standard in 2005 with the goal of reducing U.S. reliance on oil, it expected such fuels would make up a significant portion of its mandated use of 36 billion gallons of biofuel by 2022.

But development of the innovative fuel source has lagged and refiners argue they should not be punished for failing to use a fuel that is not commercially available.

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