EPA Cuts Mandates for Corn Ethanol With Overdue Renewables Quota

(Bloomberg) — The U.S. Environmental Protection Agency on
Friday proposed cutting the quotas for the use of renewable
fuels, lowering the mandate for corn ethanol this year and next
from the 15 billion gallons required by law.

After delaying rules for using ethanol, biodiesel and
cellulosic fuels for more than a year, the EPA said corn ethanol
levels should be set at 13.4 billion gallons this year and 14
billion gallons for 2016. The quota for biodiesel would increase
to 1.7 billion gallons this year and 1.8 billion gallons next.

The agency also set requirements for 2014 at the level
produced by the industry.

“We believe these proposed volume requirements will
provide a strong incentive for continued investment and growth
in biofuels,” said Janet McCabe, the EPA official in charge of
the program.

The agency said it would issue the final standard by Nov.
30 after receiving public comment and holding a hearing June 25
in Kansas City, Kansas. It will return to the program’s
statutory timeline for issuing annual rules after these are
finalized, the agency said.

Ethanol and oil industry advocates have battled over
whether targets in the 2007 Energy Independence and Security Act
are obsolete because gasoline demand has grown more slowly than
forecast.

The legislation required refiners to use 20.5 billion
gallons of renewable fuels this year and 22.25 billion in 2016,
based on 2007 fuel consumption forecasts. EPA has the legal
authority to adjust those totals, and set the overall levels for
renewable fuels at 16.3 billion gallons and 17.4 billion gallons
respectively.

To contact the reporters on this story:
Mark Drajem in Washington at
mdrajem@bloomberg.net;
Mario Parker in Chicago at
mparker22@bloomberg.net

To contact the editors responsible for this story:
Jon Morgan at
jmorgan97@bloomberg.net
Steve Geimann

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