A motorist fills up at San Francisco last month.
Photo:
Noah Berger/Associated Press
WASHINGTON — The Environmental Protection Agency proposed reducing the amount of ethanol and other biofuels that must be blended into gasoline this year and retroactively lowered last year’s target—a win for refiners who warned that raising the requirement would lift prices at the pump.
The decision comes as the price of ethanol, the most-dominant biofuel, has risen to its highest level in a decade. While U.S. gas prices are driven by the price of crude oil, refiners say ethanol prices have contributed to higher prices at the pump, even though gasoline has dipped from recent highs.
The EPA said it would require refiners to add 18.52 billion gallons of ethanol and other biofuels to be blended into gasoline for 2021—down from a mandate of 20.09 billion gallon previously set for 2020. Although 2021 is almost over, no mandate for the current year has been set.
Agency officials also lowered the amount required for 2020 to 17.13 billion gallons, down from the 20.09 billion gallon-target it had set in late 2019, the last time the blend rate was set.
Had the EPA kept the 2020 mandate at the previous level, refiners would have had to purchase credits from the market to comply with the law. Refiners had lobbied for that relief after the pandemic depressed energy demand.
Write to Katy Stech Ferek at [email protected]
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