Under the Renewable Fuel Standard passed in 2007, the U.S. Environmental Protection Agency (EPA) is required to set annual targets for amounts of ethanol to be blended with gasoline.

The agency recently released its final ethanol ruling for 2016, and it seems to be drawing criticism from all sides.

In recent years, the amounts of ethanol called for by the rule have been deemed unrealistic by many.

DON'T MISS: EPA Proposes To Cut Ethanol Requirement For Gasoline

But now that the EPA is proposing to reduce the amount of ethanol, the biofuel industry is also unhappy.

So while the oil industry believes the ethanol ruling is still too high, the biofuel industry is now complaining that it is too low, according to the Financial Times (subscription required).

Back in 2007, lawmakers envisioned blending up to 22.3 billion gallons of ethanol with gasoline by 2016.

Oil well (photo by John Hill)

Oil well (photo by John Hill)

But while the EPA's final ruling called for only 18.1 billion gallons, the oil industry still believes that is too much.

Oil refiners say they are unhappy because the new requirement would raise the amount of ethanol in the U.S. gasoline supply above 10 percent.

This would breach the "blend wall," beyond which ethanol can not be practically blended with gasoline, they say.

ALSO SEE: EPA Proposes Lower Increases For Ethanol In Gasoline

The oil industry also argues that the 2016 target is based on unrealistic sales expectations for cars that use gasoline with higher amounts of ethanol.

Much of the gasoline sold in the U.S. is E10 fuel--a blend of 10 percent ethanol and 90 percent gasoline.

Blends with more ethanol are also available--on a limited basis--up to E85, which contains 85 percent ethanol, for "flex-fuel" vehicles.

Gas pump

Gas pump

Several years ago, the EPA also approved E15 fuel for use in all cars made in 2001 or later, but the number of gas stations that have paid to install the required "blender pumps" is small--in part due to lack of consumer demand.

Yet because the final 2016 ethanol rule still calls for a decrease from the original proposed amounts, the biofuel industry is also unhappy.

The Renewable Fuels Association trade group accused the EPA of buying into oil-industry arguments, and underestimating the market for biofuels.

MORE: EPA Resets Ethanol Rules To Reflect Reality: Cellulosic Sources Don't Exist (Apr 2014)

It also believes the revised 2016 total--which reduces ethanol levels to about what were originally proposed for 2014--will create uncertainty for producers.

The smaller biofuel industry relies on the Renewable Fuel Standard to compete with oil, it claims.

U.S. ethanol output recently topped 1 million barrels a day for the first time--growth attributed to low corn prices and increased driving.

[EDITOR'S NOTE: Green Car Reports thanks our tipster, who prefers to remain an International Man of Mystery.]


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