WASHINGTON—The Environmental Protection Agency
proposed Friday to ease annual requirements for ethanol in
gasoline, a contentious regulatory step required by a 2007 law that
the Obama administration has struggled to enforce in recent
years.
Refineries are required by that law to blend an increasingly
large amount of biofuels into the U.S. gasoline supply each year.
With delays in issuing quotas for 2014 and 2015, the EPA, which
administers the mandate, proposed an unprecedented set of three
years' worth of ethanol quotas, all of which were far lower than
what the law requires.
The agency says that two primary obstacles—the
constraints on the gasoline market being able to absorb more
biofuels, and the lower-than-anticipated development of biofuels
made from non-corn products like plant waste—restrict its
ability to set quotas at the levels Congress envisioned. The agency
is citing its waiver authority under the law to do this, a move it
made in its 2013 proposal. Most of the mandate is currently met by
corn ethanol, which is a more established industry than biofuels
made from other products.
The agency is nearly two years late in setting the quotas for
2014 and has set the levels to be blended that year at 15.93
billion total gallons, close to what was produced last year and
slightly higher than what it had set in an earlier proposal in
November 2013. Biofuels represent about 10% of total gasoline
consumption in the U.S.
For 2015, the EPA proposes to increase that number to 16.3
billion gallons, about four billion less than what the law
requires. The EPA is proposing a level of 17.4 billion gallons for
2016, compared with the statute level of 22.25 billion gallons.
Write to Amy Harder at amy.harder@wsj.com
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