The Environmental Protection Agency doesn’t expect next year’s increase of ethanol put into gasoline to have any environmental benefit, but it could end up costing as much as $600 million per year.
The EPA estimates the Renewable Fuel Standard, or the amount of biofuel required to be added to the nation’s gasoline supply, to have zero dollars in benefits, according to the agency’s Fall 2015 Statement of Regulatory Priorities. However, the new rule, set to be announced by Nov. 30, could cost between $118 million and $595 million, according to the document.
The EPA is set to announce that 17.4 billion gallons of biofuel must be added to the nation’s gasoline in 2016. That amount is expected to break the “blend wall,” or the amount of biofuel that car engines can handle without suffering any damage.
The Energy Information Administration, the independent analysis arm of the Department of Energy, believes reduced gasoline demand will push the percentage of biofuels in gasoline past 10 percent, which automakers say most models cannot handle.
The EPA requires a certain amount of biofuel to be added to the nation’s gasoline supply, rather than having it make up a certain percentage.
The agency also will retroactively set the limits for 2014 and 2015 in its announcement. Both of those years will be below the amount initially designated by Congress, to accurately reflect the amount of biofuels used.
The retroactive amount for 2014 would be 15.93 billion gallons of biofuel, which was the actual amount used. The standard for 2015 would be 16.3 billion gallons.
