A US federal restriction that bans the summertime sale of gasoline blends containing higher quantities of ethanol might be relaxed, according to sources with knowledge of the regulation.
President Donald Trump is expected to make the announcement on Tuesday, before heading to Iowa on that same day. There are speculations that the move is to help the reelection of Iowa farm belt Republican candidates, where production of ethanol is the largest in the country.
Known as E15 gasoline, refiners are required by the U.S. Renewable Fuel Standard to blend a certain amount of biofuel, and that amount increases every year. They can also opt to purchase credits from competitors who comply with the blending rules.
Implemented as a summertime rule to curb smog, EPA will be instructed to fast-track the lifting of the ban, in time for next summer. Studies have indicated that the ban has limited benefits for the environment.
Opposing the move is The American Petroleum Institute, the largest oil advocate group in the States. They argue that the ethanol-blend gasoline will cut into the oil industry’s revenue margins. In addition, refineries that buy competitor credits have complained that the prices are too volatile. Trump’s expected move is also facing backlash in Congress, from members on both parties.
The so-called ban lift will be combined with biofuel credits trading restrictions. Final details are still unclear, and may be delegated to the EPA to decide.