June 30, 2015 10:45 AM, EDT

EPA Proposal Geared to Boost Ethanol Use, Official Says

Daniel Acker/Bloomberg News

The U.S. Environmental Protection Agency is aiming to put more ethanol in gasoline even as it reduced the consumption target established in a 2007 energy law, an EPA official said.

On May 29, EPA proposed requiring the use of 13.4 billion gallons of corn-based ethanol this year and 14 billion in 2016, down from 15 billion in both years established in 2007. EPA said it will finalize the targets by Nov. 30.

Not reducing the targets would be “irresponsible” and lead to “widespread non-compliance” by refiners, Chris Grundler, director of EPA’s office of transportation and air quality, said June 25 at a hearing in Kansas City, Kan.

Ethanol industry advocates and petroleum interests presented their positions at the hearing.

“Because the program has worked so well, we are extremely disappointed that EPA is again proposing to slash the blending requirements enacted by Congress for 2014 through 2016,” said Geoff Cooper, senior vice president of the Renewable Fuels Association, a Washington-based trade group.

The petroleum industry has said the program should be repealed or reformed. Bob Anderson, senior fuels policy adviser at Chevron Corp., called it “fundamentally unworkable” at the hearing.

EPA uses tradable certificates attached to each gallon of biofuel to track compliance.

Denatured ethanol for July delivery rose 1.3 cents, or 0.8%, to settle at $1.556 a gallon June 25 on the Chicago Board of Trade. Futures have fallen 4.4% this year.