Fuel suppliers will be required to mix 16.93 billion gallons of corn-based ethanol and other renewable fuels into gasoline this year, as part of a long-awaited set of biofuel targets released by U.S. regulators Monday.
Oil refiners will have to use 18.11 billion gallons in 2016 based on targets set by the Environmental Protection Agency. The requirements are above ones proposed by the agency in May but are below statutory targets.
The levels are part of a program authorized by Congress 10 years ago that requires steadily escalating volumes of biofuels to be blended into the country’s gasoline and diesel fuels. The law, designed to shrink the nation’s dependence on foreign crude and curb greenhouse-gas emissions, has pitted oil companies including Chevron Corp. and Exxon Mobil Corp. that oppose using more biofuels against farmers in the corn-rich Midwest who’ve argued for higher amounts.
Ethanol is projected to consume 38 percent of this year’s corn crop.
Last year, the EPA decided to put off setting 2014 quotas, saying it would issue rules for 2014, 2015 and 2016 this year. In May, it proposed targets that fell short of levels mandated in the law — raising the ire of renewable fuel advocates and setting off a flurry of lobbying in Washington.
“The final requirements will boost renewable fuel production and provide for robust, achievable growth of the biofuels industry,” the EPA said a statement on its website. “The final rule considered the many public comments EPA received on the proposal.”
Ethanol now accounts for about 10 percent of gasoline consumption. While fuel suppliers have warned that adding more into the mix would damage car engines, the EPA has allowed blends of as much as 15 percent ethanol for cars made after 2001.
Under congressional targets, the U.S. was to use 20.5 billion gallons of renewable fuels this year, including 15 billion gallons of ethanol derived from corn. But those numbers are based on 2007 fuel consumption forecasts, and in the eight years since, gasoline demand has grown more slowly than anticipated.
It has surged this year, however, creating the potential for more biofuels to be added. Drivers burned 9.47 million barrels a day in August, up 3.8 percent from two years ago.
The EPA’s initial proposal outlined on May 29, as directed by a court settlement with the oil industry, would require refiners to use some 17.4 billion gallons of renewable fuels next year, with about 14 billion of those coming from traditional corn ethanol. For 2015, EPA proposed a requirement for 16.3 billion gallons of total renewable fuels, including 13.4 billion in traditional ethanol derived from corn.
Biofuels producers say they count on the statutory volumes to entice investors lured by guaranteed demand.