EPA to Raise Biofuel Limits?

EPA to Raise Biofuel Limits?

The Environmental Protection Agency (EPA) in the United States is carefully considering whether or not to allow higher blends of ethanol to be mixed in with standard petrol. This decision will not specifically mandate that ethanol must be blended with petroleum based fuels, however it would allow for the current limit of a 10% blend to be increased to a 15% blend – effectively giving a 50% demand boost to the currently suffering biofuel market within the US.

The current primary concern of the EPA lies not with the source of the fuel itself but with the actual effects the fuel blends may have on car engines and what the overall environmental impact might be. While it is well known that biofuel blends generally produce significantly less carbon dioxide than conventional petroleum based fuels this does not mean that they do not produce any harmful emissions at all and, if handled improperly, could potentially do more damage to vehicles and increase their emissions over what is currently seen in the market.

Regardless, this news comes as a welcome break to the US biofuel sector after a hard time a few years ago thanks to dropping crude oil prices as well as the deepening recession in 2008. Over the past two years multiple biofuel companies have actually gone bankrupt and have been unable to keep up with the market trends, particularly when their own fuel dropped to a mere $30 a barrel.

As for the time frame of the decision Lisa Jackson, an EPA administrator, has reportedly stated that they are aiming for a decision to be made by late summer at the latest. This would be good news for the US corn sector in particular as summer is the main harvest season and ethanol’s reliance upon corn for high-yield production may well help stimulate the corn industry as well.

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