WASHINGTON — The federal government relented on quotas for renewable fuels as U.S. production of next-generation sources and demand for gasoline have lagged projections.
In issuing long-overdue final quotas, the Environmental Protection Agency on Tuesday gave refiners an additional four months to reach the goal of using 16.55 billion gallons of renewable fuel for 2013. It also signaled it will cut the 18.15 billion-gallon mandate for 2014.
“EPA’s decision represents a positive sign for consumers and should help to prevent unnecessary increases in gasoline prices,” Jason Bordoff, director of Columbia University’s Center for Global Energy Policy, said in a statement.
Under the Renewable Fuel Standard, passed by Congress in 2007, refiners such as Exxon Mobil Corp. must use a certain amount of renewable fuels each year, with their contribution determined by their share of the fuel market.
Refiners complain that declining demand for gasoline means next year they would be forced to blend in more than 10 percent of ethanol, which they say isn’t safe for all engines and lacks support from consumers.
The EPA pledged to lower the quota next year based on the estimated 13.2 billion gallons of ethanol that could fit within the 10 percent so-called blendwall, plus additional biodiesel or cellulosic fuels that would qualify.