US biofuel mandates to be reduced in 2014

The biofuel mandate in the US could be cut back in 2014 for the first time since the Renewable Fuel Standard was passed in 2007. The US government is currently planning on reducing the amount of ethanol that must be added to petrol in order to make it burn cleaner.

In 2007 congress passed the Renewable Fuel Standard that meant each year importers and refiners of fuel had to start blending a higher concentration of ethanol into petroleum fuel products. Unfortunately this offered up difficulties for oil companies as including more than ten per cent of ethanol in petrol can cause problems. This marker is known as the 'blend wall' and indicates the point at which seamless blending can be difficult to achieve.

The US Environmental Protection Agency (EPA) had previously set the oil industry the targets of blending 13.4 billion gallons of corn-based ethanol into petroleum fuels, and 18.15 billion gallons of biofuel blending in total. As oil companies have been struggling to meet the deadlines for this year's targets, they have praised the decision to reduce these targets; although the actual reduced figures will not be announced until September.

As well as the reduction in 2014's targets, the EPA has also announced that oil refineries will have an extra four months in which to meet the 16.55 billion gallon blending quota for 2013. This now means that the industry will not have to meet this amount until June 2014, adding extra relief to the struggling US oil sector.

Jason Bordoff, director of Columbia University's Center on Global Energy Policy, said: “The EPA’s announcement today that it will leave the renewable fuel volume mandates in place for 2013 but is willing to use its flexibility to issue waivers next year shows the Obama Administration clearly understands the current RFS statutory mandates are unworkable beyond 2013.”