EPA proposes ramping up quotas for ethanol

The U.S. Environmental Protection Agency on Thursday proposed increasing the amount of ethanol and other biofuels that must be blended into the nation's fuel supplies over the next three years, a move generally welcomed by renewable fuel and farm groups but condemned by environmentalists and oil industry groups.

"This proposal supports low-carbon renewable fuels and seeks public input on ways to strengthen the program," EPA Administrator Michael S. Regan said in a statement. "With this proposal, EPA seeks to provide consumers with more options while diversifying our nation's energy mix."

The proposal also includes new incentives to encourage the use of biogas from farms and landfills, and renewable biomass such as wood, to generate electricity to charge electric vehicles. It's the first time the EPA has set biofuel targets on its own instead of using numbers from Congress. The agency opened a public comment period and will hold a hearing in January.

The goal of the Renewable Fuel Standard is to reduce carbon emissions that contribute to climate change, expand the country's fuel supply, strengthen energy security and reduce fuel prices for consumers. Ethanol is a key part of the economy in many Midwest states, consuming about 40 percent of the nation's corn supply.

But environmentalists argue that it's a net ecological and climate detriment because growing all that corn fosters unsustainable farming practices. The oil industry says ethanol mandates constrain free market forces and limit consumer choice, and that higher blends can damage older vehicles.

Geoff Cooper, president and chief executive officer of the Renewable Fuels Association, told reporters on a conference call that the EPA's plan creates a "clear pathway for sustainable growth for our industry when it comes to the production and use of low-carbon fuels like ethanol." He said it also bolsters the industry's push for year-round sales of gasoline with a 15 percent ethanol blend, as well as sales of the 85 percent ethanol blend E85.

"As the administration is working to address climate change, we've long known that biofuels will play an important role in reducing greenhouse gases while having the added benefit of providing expanded opportunities for farmers," National Farmers Union President Rob Larew said in a statement.

But environmental groups said the plan offers false solutions.

"This is a toxic plan directly at odds with the Biden Administration's commitment to Environmental Justice," Sarah Lutz, climate campaigner at Friends of the Earth, said in a statement. "Charging electric vehicles with forests and factory farms should be a non-starter."

Geoff Moody, senior vice president of the American Fuel & Petrochemical Manufacturers, said the Renewable Fuel Standard was meant to be a liquid fuels program, not an electric vehicle program. He urged the EPA to go back as it develops the final rule and reject "yet another massive regulatory subsidy for electric vehicle manufacturers."

The EPA proposes to set the total target for all kinds of renewable fuels at 20.82 billion gallons for 2023, including 15 billion gallons from corn ethanol. The target would grow to 22.68 billion gallons for 2025, including 15.25 billion gallons of corn ethanol.

The plan also calls for growth in cellulosic biofuels which are made from fibrous plant materials biomass-based diesel and other advanced biofuels.

Republicans U.S. Sens. Chuck Grassley and Joni Ernst of Iowa, the country's top corn and ethanol producing state, said the EPA should have gone further to require even more use of advanced biofuels.

“While I am pleased with the proposed levels for conventional biofuel, the flatlined levels for advanced biofuel do not reflect the immense innovation and growth the industry has experienced.” Ernst said in a statement.

Grassley said in a statement it was a missed opportunity to use more advanced biofuel to lower diesel fuel costs to move freight.

“Biofuels producers stand ready to help ease fuel costs, thereby lowering consumer prices, all while reducing emissions” he said. “This is the worst possible time to abandon advanced biofuels.”

Cooper said there's probably no way to meet the proposed higher ethanol targets without more use of E15 and E85 instead of the conventional 10 percent ethanol mix. That makes it important to eliminate regulations that block summertime sales of E15, he said.

Earlier this week, Ernst and Grassley joined a bipartisan effort calling for year-round sales of the higher blend. E15 sales are usually prohibited between June 1 and Sept. 15 because of concerns that it adds to smog in high temperatures.