EPA Proposes Cut in Ethanol Use in 2014

The U.S. Environmental Protection Agency on Nov 15 lowered the annual requirement for ethanol in gasoline, acknowledging that Congressionally mandated levels specified in 2007 law are difficult to meet. The move also pleased food industry groups who believe the diversion of corn to ethanol has been driving up food prices.

For 2014, the agency is proposing 12.7-13.2 billion gallons of corn ethanol be blended into U.S. gasoline supplies. Altogether, 15.2 billion gallons of renewable fuel are suggested by the agency. That is about 16 percent less than what Congress specified in the 2007 renewable fuels law, the Wall Street Journal reported. The law gives EPA the ability to lower the requirement, but this is the first time the agency has done so.

The EPA's proposal is not only lower than what was expected for 2014, but lower than what was mandated in the past two years.

The change to the Renewable Fuel Standard (RFS) "is appreciated as it acknowledges a problem exists with the current policy," according to the American Meat Institute (AMI), "but more needs to be done to fix the RFS, which continues to have a detrimental impact on food prices.

“EPA’s decision to reduce the ethanol mandate is long overdue,” said Mark Dopp, AMI's vice president of regulatory affairs and general counsel. “While this is a positive step, the fact remains the RFS is a flawed policy that requires Congressional action. Even with a record corn crop expected this year, the damaging ripple effect of this defective policy has moved through the meat and poultry complex for the past several years. The time for Congressional action is now.”

Indeed, there are members of Congress calling for such action.

“While the EPA’s slight reduction of the RFS for 2014 acknowledges that the mandate is unworkable, it is not enough to provide the much-needed relief businesses, farmers, and consumers need," said Rep. Bob Goodlatte (R-VA). “Today’s announcement makes it even clearer that it will now be up to Congress to fix this broken mandate. There is a growing appetite in Congress to reform the ethanol mandate, and I urge Chairman Upton and the House Energy and Commerce Committee to consider the RFS Reform Act (H.R. 1462) as a legislative fix to the growing problems with the RFS.”

The EPA's proposal will be open to 60 days of public comment before being made final in the spring of next year.

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