EPA Document Suggests Big Hit to Ethanol Demand

The Biden administration is considering big cuts to the nation’s biofuel blending requirements, a move triggered by a broad decline in gasoline demand during the pandemic.

If adopted, the proposal would be a win for the oil industry, which argues biofuel blending is costly.

The cuts would anger ethanol producers and the nation’s corn farmers.
U.S. Rep. Randy Feenstra (R-Iowa) denounced the proposal and said on Twitter he would “fight this tooth-and-nail.”

The EPA would reduce blending mandates for 2020 and 2021 to about 17.1 billion gallons and 18.6 billion gallons, respectively, an EPA document showed. That would be lower than a level of 20.1 billion gallons that had been finalized for 2020 before the pandemic.

The agency also would set the level for 2022 at about 20.8 billion gallons.
The EPA is setting the 2020 and 2021 mandates retroactively.

Ethanol would take the biggest hit. Levels for conventional renewable fuel, which includes ethanol, would drop from 15 billion gallons to about 12.5 billion gallons in 2020, 13.5 billion gallons in 2021 and 14.1 billion gallons in 2022, according to the document.

The EPA did not comment, but the administration cautioned that the numbers are not final and subject to revisions.

Source: Reuters