By Stephanie Kelly and Jarrett Renshaw
NEW YORK, March 1 (Reuters) – The U.S. Environmental Protection Agency on Wednesday proposed a rule that would allow expanded sales of gasoline with a higher ethanol blend in certain U.S. Midwest states, a win for the ethanol and farm industries, which have sought the expansion for years.
The rulemaking would not take effect until summer of 2024, the EPA said.
The decision comes after a request from governors in major corn-producing Midwestern states including Iowa, Nebraska and Illinois that the EPA effectively lift a ban on so-called E15, which contains 15% ethanol. The governors had requested that the EPA lift restrictions starting for the summer of 2023.
Reuters previously reported the proposed rulemaking on Tuesday.
The EPA enforces a summertime ban on E15 over concerns it contributes to smog in hot weather. Research has since shown the E15 blend may not increase smog relative to the more common E10, which is sold year-round and contains 10% ethanol.
Proponents of EPA’s proposal say that expanding E15 supply would ease pump prices and help farmers. However, critics of the idea – including those in the refining industry – have voiced concerns that a piecemeal approach to growing E15 sales could introduce distribution challenges.
The oil refining industry has traditionally balked at efforts to expand the ethanol market because it competes against gasoline at the pump and can be costly to blend.
(Reporting by Stephanie Kelly and Jarrett Renshaw; Editing by Chizu Nomiyama)
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