The Environmental Protection Agency decided Wednesday to revoke the 2% oxygen content requirement for reformulated gasoline nationwide. States no longer have to add ethanol or MTBE to gasoline to fight pollution under the new rules. But with the established ethanol market, the move should increase ethanol demand.
The Energy Policy Act authorized the action, which reduces production burdens while continuing to protect the environment with clean fuel blends as the use of ethanol increases. Currently, about 30% of gasoline is RFG. The revocation takes effect nationwide on May 6 and in California 60 days after the regulation's publication in the Federal Register.
The mandate was once seen as a huge boost to ethanol sales but is not necessarily seen the same way any more. Research now shows using low blends of 2-6% ethanol mixed with gasoline does little to address air quality problems, explains Dan Kammen, co-director of the Berkeley Institute of the Environment.
"California is about to become the leader of E85 in the country," Kammen says. California will discontinue its use of low levels of ethanol and go to higher levels of corn.
Corn-based ethanol does have a 10% reduction in greenhouse gases compared to regular gasoline. But as ethanol transfers from corn-ethanol to cellulosic ethanol the greenhouse reduction increases to 95%.