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EPA Updates Biofuel Requirements For Renewable Fuel Standard

The Environmental Protection Agency will release its recommendations for the amount of ethanol that is blended into gasoline in coming days.

This week the Environmental Protection Agency released requirements for the amount of ethanol that must be blended into the nation’s gasoline through 2016.

Indiana’s role as an ethanol-producing giant means the state is paying attention.

The amounts are bigger than the ones the EPA proposed last spring—2016’s 18-billion gallon requirement is about 4 percent higher than expected.

How much each refinery needs to contribute to the renewable fuel standards, or RFS, is dictated by their market share.

Even though the law doesn’t explicitly specify what sort of biofuel is required for the majority of the fuel, most ethanol is made from corn—and as Ken Parrent, director of biofuels for the Indiana Corn Marketing Council says, the greater the requirements, the happier the state’s corn producers are.

"It’s played a critical role in making corn a profitable commodity for Indiana farmers to grow," said Parrent.

According to Parrent, a little less than half of the state’s corn goes directly to the state’s 14 ethanol plants.

But Purdue economist Wally Tyner says the increased demand for corn, thanks to the RFS, will mean higher prices for everything from beef to gas prices.

He says the current low gas prices and higher ethanol prices will mean prices will go up at the pump, but only by a few cents:

"Requiring that it be blended means that price, that cost will be passed on to consumers," said Tyner.

RFS proponents say the amount is less than Congress originally envisioned back in 2007.

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