12/2/2013 | 1 MINUTE READ

EPA Trims Renewable Fuels Quota

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The U.S.

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The U.S. Environmental Protection Agency proposes a 16% reduction in its mandate that the U.S. use 18.2 billion gallons of renewable fuel next year, Bloomberg News reports.

The EPA's proposal would cut the energy industry's mandate for corn-based ethanol next year nearly 6% to 13 billion gallons and trim its allotment for other biofuels 20% to 2.2 billion gallons.

The agency agrees with refiners that meeting the original target would force them to blend more ethanol into gasoline than many vehicles can safety use. The primary reason: America's new-car fleet is rapidly become more fuel efficient, thus reducing gasoline demand and significantly altering the math behind the original goal.

The original plan assumed the usage target for 2014 could be met without exceeding a 10% concentration in gasoline. So-called E10 is widely sold now. The EPA ruled earlier this year that a 15% blend would be safe in vehicles built after the 2000 model year. But the petroleum industry and many carmakers warn that a higher ratio of ethanol would hurt engines in older cars.

The original quotas were set in 2007 under a provision of the Energy Policy Act passed two years earlier. But the Obama administration is allowed by the law to adjust the targets.

The EPA will issue its final rule on the quotas in the first quarter of 2014, after receiving comment from interested parties.