EPA proposes to reduce corn-ethanol-in-fuel mandate by almost 10 percent

The Environmental Protection Agency wants to reduce the amount of corn-based ethanol that would be used in fuels in 2014, from about 14.4 billion gallons this year to about 13 billion, under a propose rule announced Friday. EPA will issue a final rule in the spring.

The rule would reduce the Renewable Fuels Standard for "virtually all biofuels," Todd Neeley reports for DTN/The Progressive Farmer. "Although EPA does not set a corn-based ethanol number, it has proposed an overall RFS biofuels volume of 15.21 billion gallons, including 17 million gallons for cellulosic biofuels, 1.28 billion gallons for biomass diesel and 2.2 billion gallons for advanced biofuels."

Neeley writes, "The EPA announcement is the culmination of a difficult week for the U.S. ethanol industry. It started with the release of an Associated Press investigative package of stories that the industry contends was biased against ethanol. The stories questioned whether ethanol is a 'green' enough fuel. . . . The emergence of corn-based ethanol is one of the reasons rural America has been one of the few positive economic stories in the U.S. during the recent economic downturn." (Read more)

The biofuels industry railed against the move, as summarized by Jim Lane of Biofuels Digest. The industry, and "some agriculture and energy experts," say EPA "is on shaky legal footing," partly because it is using a waiver provision that is supposed to be based on "inadequate domestic supply" of biofuels, Amana Peterka reports for Greenwire. "EPA has chosen to interpret inadequate domestic supply as entailing the distribution issues involved with the blend wall," the limit created by the widely accepted standard that a gasoline-ethanol blend should be no more than 10 percent ethanol to avoid damage to engines and other parts.

Livestock producers such as National Turkey Federation President Joel Brandenberger cheered the news: “The Renewable Fuels Standard has been affecting our members since the first RFS legislation was passed in 2005. It has disrupted the certainty in the feed supply, it has caused swings in availability of feeds, and obviously as a result of that the pricing of feed.” For a report from Brownfield Ag News, click here. For a fresh explainer from Brad Plumer of The Washington Post, go here. For more background on the issue, here.