The proposal marks the first time the federal government is attempting to reign in the use corn-based ethanol.
The agency's proposal for 2014 would reduce the amount of bio-fuel blended in into the market from 16.55 billion gallons to 15.21 billion gallons -- roughly 16 percent lower than targets set by the US Congress in 2007.
At present, most of the gasoline offered for sale to US consumers is about 10 percent ethanol.
In proposing the change, the EPA said a higher blending rate is unsustainable given the available bio-fuel infrastructure that currently exists in the US.
Not surprisingly, the response to the proposed blend standard for next year is falling along industry lines.
For instance, in a statement, Jack Gerard, president and CEO of the American Petroleum Institute, said the reduction was “a move in the right direction.”
But the Advanced Bio-fuels Association was livid, saying if the proposed blend level isn't raised, " the agency will pull the rug out from underneath the growing advanced bio-fuels industry."
"Innovative companies have responded to the challenge of producing cleaner, low-carbon fuels by investing a collective $14 billion in the development of advanced and cellulosic bio-fuels; However, today’s proposal reveals that EPA might still deliver a devastating blow to this nascent sector and a victory for the oil industry by cutting the volume requirements for advanced bio-fuels," said ABFA President Michael McAdams.
"Such a move will chill future investments necessary to produce large-scale quantities of renewable fuels that cut greenhouse gas emissions by at least 50 percent compared to gasoline," McAdams added.
If the EPA were to stand by its decision, it "would be a step backwards from the Obama administration’s commitment to address climate change," he said.
Similarly the Biotechnology Industry Organization said if its stands, the proposal “could significantly chill investment in advanced bio-fuels projects.”
Bob Dinneen, President and CEO of the Renewable Fuels Association (RFA), had even more fiery response:
“By re-writing the statute and re-defining the conditions upon which a waiver from the RFS can be granted, EPA is proposing to place the nation’s renewable energy policy in the hands of the oil companies," Dinneen said. "That would be the death of innovation and evolution in our motor fuel markets, thus increasing consumer costs at the pump and the environmental cost of energy production. This proposal cannot stand.
“During the comment period, I expect reason and fact to replace the fear and misinformation peddled by Big Oil and seemingly adopted for this proposal. But an Administration committed to addressing climate change cannot turn its back on bio-fuels," Dinneen continued.
"An Administration managing an economic recovery cannot watch gasoline prices rise for lack of competition. An Administration intent upon seeing the next generation of bio-fuel technology commercialized cannot eviscerate the demand base that would allow those fuels to succeed," he said. "And an Administration that understands the importance of a healthy farm economy cannot rip away demand that farmers relied upon in growing the largest corn crop in history, particularly at a time when there is no Farm Bill safety net. This Administration, a consistent supporter of the RFS, will not affect its demise.”
“I look forward to engaging the EPA and others in the Administration in constructive dialogue as to the path forward,” Dinneen concluded.
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