A federal court in California has blocked California’s implementation of its low carbon fuel standard, saying that the standard violates the commerce clause of the U.S. Constitution, which reserves the regulation of interstate commerce for the federal government. The court found that the California standard discriminated against petroleum and ethanol produced in other states.

Growth Energy, a coalition of ethanol producers, filed the lawsuit against the California Air Resources Board in 2009. Read the rulings here and here .

The California standard created the perverse situation in which California began importing expensive ethanol from Brazil, which is deemed eligible under the standard, while rejecting less expensive ethanol from the Midwest, which is deemed ineligible. In the meantime, Midwestern ethanol is being shipped to Brazil to meet shortfalls in ethanol production there. Read more about this at Biofuels Digest .