EPA is proposing the first cut in the Renewable Fuels Standard (RFS) requirements in the amount of ethanol that must be blended into the U.S. gasoline supply. This year’s renewable fuels hit 16.55 billion gallons and had been scheduled to reach 18.15 billion gallons in 2014. However, EPA is proposing the 2014 requirement at 15 billion to 15.52 billion gallons. This would be approximately what the mandate was in 2012.
This will be the first year-to-year reduction in the RFS mandate since Congress created the program in 2005 and expanded it in 2007. Conventional renewable fuel (corn based ethanol) would be reduced from the statutory level of 14.4 billion gallons to 13 billion gallons. EPA said it was taking this action because of “market conditions” that include a slowdown in the demand for gasoline and the ethanol supply could be greater than demand. There will be a 60 day comment period on the proposal.