Ethanol Blend Wall Increased in the U.S.

Companies in the ethanol sector got a boost yesterday. In a long-awaited ruling, the Environmental Protection Agency (EPA) increased ethanol blending requirements from 10 percent to 15 percent of gasoline.

The E15 blend increase only pertains to vehicles that were made after 2007, however. Because of uncertainties around how ethanol impacts the integrity of engines and components, the EPA decided not to raise the cap for older vehicles.

That means gas stations may need to install additional tanks to accommodate the new blend of gasoline and ethanol.

Automobile manufacturers have lobbied hard against the increased blend wall, saying that there hasn’t been enough testing on the impact that E15 will have on engines. Although the news was good for ethanol producers, the industry wasn’t entirely happy with the decision either. Ethanol companies say they want the E15 requirement to apply to older vehicles as well.

“The EPA must move quickly to take the next step,” said Poet CEO Jeff Broin in a statement.

The EPA hasn’t said when it might rule on cars made before 2007. But companies like Poet say that the market for next-generation cellulosic ethanol will be suppressed without a full-blown increase in blending targets.

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