The U.S. Environmental Protection Agency is proposing a modest increase in the amount of corn-based ethanol and biofuels blends that will be mixed into gasoline and diesel sold at fuel pumps in 2017.
The EPA wants to see 18.8 billion gallons blended into the nation’s fuel supply in 2017, up 4 percent from the 18.11 billion gallons set for this year. That total volume includes 14.8 billion for conventional biofuels, mainly ethanol, up from 14.5 billion for this year, the EPA said.
It’s still far below the 24 billion gallon target in the Renewable Fuel Standard (RFS) set in 2007 by Congress, which was aimed at cutting U.S. oil imports and increasing renewable fuel use. The new proposal did reignite the fight between the renewable fuels and oil industries, which has been active for several years.
The proposed increase did not go far enough for the farm lobby and biofuels companies such as Poet. While going in the right direction, “they once again fail to acknowledge the existing capabilities of the biofuels industry and fuel retailers in meeting the (RFS) goals,” said Poet Chief Executive Jeff Broin.
Oil industry advocates continued calling for an overhaul of the program. “EPA’s proposal makes abundantly clear that the only solution is for Congress to repeal or significantly reform the RFS,” said the American Petroleum Institute’s downstream group director Frank Macchiarola.
The EPA says that the volumes represent “ambitious, but achievable” growth for the renewable fuels industry. Last year, the agency took heat from the renewable fuels industry and corn growers for reducing the “blend wall,” the 10 percent saturation point for ethanol blended in gasoline.
The new targets just released by the EPA would push biofuels toward 10.4 percent of total U.S. fuel demand. This could boost the program’s cost to oil refiners such as Valero Energy Corp. and Tesoro Corp. In response to the EPA’s proposal, prices jumped for biofuels credits companies use to prove they have met the requirements.
The targets will be finalized by Nov. 30 after a public comment period. In recent years, the EPA has delayed releasing its biofuels ruling. This early announcement places the proposed rule on biofuels blends more than six months ahead before the official deadline to finalize the plan.
In November 2015, the EPA announced a retroactive target for 2014 and the first for 2015 and 2016, triggering lawsuits from both biofuels and oil industry groups.
“EPA has ensured that the debate will continue to look backwards at the fruitless fight between corn and oil,” said Harvard University professor and former Obama Administration advisor James Stock.