EPA lowers ethanol requirements, citing reduced demand

WASHINGTON (AP) — The Biden administration on Tuesday lowered annual production requirements for ethanol and other biofuels to account for reduced demand as a result of the coronavirus pandemic.

At the same time, the administration moved to reject requests by small oil refineries to be exempted from ethanol requirements, saying they had failed to show exemptions were justified under the Clean Air Act.

Taken together, the actions reflect the administration’s “commitment to reset and strengthen” the federal Renewable Fuel Standard, or RFS, “following years of mismanagement” by the Trump administration and disruptions to the gasoline market stemming from the COVID-19 pandemic, officials said.

The actions announced Tuesday will enable officials “to get the RFS program back in growth mode by setting ambitious levels for 2022 and by reinforcing the foundation of the program so that it’s rooted in science and the law,” said Michael Regan, administrator of the Environmental Protection Agency, which sets ethanol requirements under the RFS.

The lower production targets are a win for the oil industry, which argues that biofuel blending is costly and raises gasoline prices. Ethanol producers, including the nation’s corn farmers, say the corn-based renewable fuel is better for the environment and helps meet federal climate change goals.

Federal law requires refiners to blend billions of gallons of biofuels in the nation’s gasoline supply or buy credits from refineries that do the blending. Refineries can seek waivers if they can show that meeting the ethanol quotas would create a financial hardship for their companies.

The ethanol industry struggled last year as gasoline usage dipped because workers stayed home instead of commuting and vacation travel halted. As fuel sales began...