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EPA plans to scale back Renewable Fuels Standard
The biofuels industry is vibrant in Ohio with six ethanol plants producing 480 million gallons of fuel from corn, valuing $900 million. Ohio also is the fifth largest producer of soybeans in the country. EPA’s proposal to reduce the amount of ethanol that must be blended into the nation’s gasoline supply, or the Renewable Fuels Standard, strikes a blow to conventional ethanol production, as well as dampens the prospects for advanced biofuels.
The RFS target initially set for 2014 was 18.5 billion gallons, up from 16.55 billion gallons this year. EPA is proposing reducing that target to 15.2 billion gallons of renewable fuels, a move large oil companies strongly support.
Gas manufacturers say they are bumping up against what they call a blend wall, which refers to efforts to meet yearly RFS mandates. They say this increases their production costs and pushes prices up at the pump. Most refiners are using a 90-percent-petroleum to 10-percent-ethanol blend (E10) but will need to increase the amount of ethanol in the blend to meet the RFS’s increasing renewable fuels minimums.
American Farm Bureau Energy Specialist Andrew Walmsley says this happened sooner than expected, but that it was expected.
The agency’s proposal will be open for 60 days of public comment before EPA makes a final decision, which is expected this spring.