US lowers biofuels mandate for 2014, draws praise and ire

WASHINGTON (ICIS)–The US on Friday proposed to lower its annual mandate for biofuels consumption for the first time, saying that refiners should blend 15.2bn gal of ethanol and other renewable fuels into the nation’s gasoline supply in 2014 instead of the scheduled 18bn gal.

The Environmental Protection Agency (EPA) said that next year’s renewable fuels standard (RFS) requirement was being lowered because “advances in vehicle fuel economy and other economic factors have pushed gasoline consumption far lower than what was expected when Congress passed the RFS in 2007”.

The agency said that under demand circumstances, if it were to mandate higher levels of ethanol blending in gasolines, “continuing growth in the use of ethanol will require greater use of higher ethanol blends such as E-15 and E-85”.

Currently, most US gasolines contain 10% ethanol, known as E-10. As gasoline consumption has declined, the ability to continue to increase ethanol consumption has encountered what refiners call the “blend wall” – the point at which additional volumes of biofuel cannot be used without raising the blend ratio beyond 10%.

The reduced RFS biofuel mandate was welcomed by refiners and other energy sector officials.

“EPA’s recognition of the blend wall and the potential adverse effects on consumers is a welcome step,” said the American Fuel & Petrochemical Manufacturers (AFPM).

But AFPM said that “greater reductions in the biofuel mandate are necessary if consumers are to avoid all the detrimental impacts of the [RFS] statute”.

“Our nation’s gasoline supply is currently maxed out at E-10, indicating we have reached this ‘blend wall’ and cannot use more ethanol without threatening consumer engines and refuelling infrastructure,” AFPM added.

In contrast, the Renewable Fuels Association (RFA), the leading biofuels trade group, was sharply critical of the EPA proposal.

The RFA argued that the agency “does not have the statutory authority to lower the total requirement” of biofuels consumption unless the mandate would cause “severe economic harm” in the nation’s fuels market.

RFA president Bob Dinneen warned that the EPA’s reduction of the 2014 biofuels mandate “could lead to negative impacts for America’s farmers and consumers, and ultimately cut American jobs, harm the environment and discourage the future of biofuels”.

The American Petroleum Institute (API) also welcomed the EPA’s biofuels proposal, with API president Jack Gerard saying that the “EPA has acknowledged that the blend wall is a dangerous reality and must be addressed to avoid serious impacts on America’s fuel supply and harm to American consumers”.

The API and other energy sector officials along with a variety of gasoline-powered engine manufacturers have long warned that ethanol blends above E-10 would cause damage to automobiles, off-road vehicles and other power equipment not able to use E-15 blends or higher.

While he welcomed the agency’s proposed reduction in the biofuels mandate for next year, Gerard said that more needs to be done.

“Ultimately, Congress must protect consumers from this outdated and unworkable programme once and for all,” he said.

The EPA’s proposed biofuels mandate for next year is open to public comment for 60 days.

Paul Hodges studies key influences shaping the chemical industry in Chemicals and the Economy