Another Last Minute Expansion By EPA On Biofuel Volumes, Exceeds Cap For Ethanol

The U.S. Environmental Protection Agency (EPA) announced today it is mandating 15 billion gallons of ethanol to be added to the domestic fuel supply in 2017, which is 200 million gallons more than the agency's proposed volume put forth in May. (NCC's comments from July on the proposed volumes can be found here). Over the last four years, EPA has raised the final volume above the initial proposed volumes by a cumulative 1.53 billion gallons.

Moreover, in setting the 2017 volume at 15 billion gallons, EPA has breached the 10 percent blend wall and effectively surpassed the statutory cap on ethanol set in the 2007 Energy Independence and Security Act.

Indeed, Congress in the statute set a cap on conventional ethanol at 15 billion gallons to prevent ethanol production from artificially diverting too great a volume of corn from feed, food and seed use to energy. At the time Congress set this cap, ethanol exports were not envisioned. However, according to the Energy Information Administration, U.S. exports have averaged nearly 840 million gallons in the past two years and are trending even higher for the first three quarters of 2016.