SAN FRANCISCO -

A federal appeals court has upheld California's first-in-the-nation mandate requiring fuel producers to reduce greenhouse gas emissions.

A three-judge panel of the 9th U.S. Circuit Court of Appeals on Wednesday rejected arguments from fuel makers that California's low carbon fuel standard discriminates against out-of-state producers.

The ruling reverses a U.S. District Court ruling in favor of the fuel makers, and removes an injunction halting implementation of the law.

The fuel standard is a key piece of California's landmark global warming law. It is meant to cut the state's dependence on petroleum by 20 percent and accounts for one-tenth of the state's goal to cut greenhouse gas emissions by 2020.