WASHINGTON, D.C., U.S. — The U.S. Environmental Protection Agency (EPA) on Oct. 13 issued a much-anticipated decision allowing the use of fuel blends of up to 15% ethanol (E15) in vehicles with model years of 2007 and newer.

The decision was made after review of extensive testing by the U.S. Department of Energy (DOE) and other available data on the impact of E15 on engine durability and emissions, said Gina McCarthy, EPA assistant administrator for air and radiation. Prior to the EPA’s decision, only a blend of up to 10% ethanol was allowed in gasoline.

Model year 2007 and newer vehicles represent one-third of the country’s gasoline consumption, McCarthy said. That percentage is expected to increase rapidly to more than 100 million cars and 50% of fuel consumption by 2015.

EPA will make a decision on vehicles model years 2001-06 after receiving the results of ongoing tests from DOE. The testing is expected to be completed in November, McCarthy said.

No waiver will be granted this year for model year 2000 and older vehicles, any motorcycles, heavy-duty vehicles or non-road engines. EPA said there is no testing data to support a waiver.

The agency made it clear that its decision is not a mandate, but simply a waiver allowing the use of E15 where and when it is available. It will be up to fuel suppliers and retailers to make the fuel available.

McCarthy said even though E15 is only a 5% increase from the current blending level, it amounts to a 50% increase in the amount of renewable fuels in a gallon of E15 as compared to E10.

Industry leaders said the announcement was a positive first step, but want the EPA to move quickly onto approving the higher blend for older vehicles.

"The arguments being made right now against E15 are the same as those made about E10 back in the late 1980s, when I entered the ethanol industry," said Jeff Broin, POET chief executive officer. "Seventy billion gallons later, we have proven those arguments false, just as research on E15 is proving critics wrong today. Greater market access will help give investors the needed confidence to commit to bringing cellulosic ethanol to commercial scale. Many projects, POET’s Project LIBERTY among them, are ready for commercialization but hindered by unnecessary limits on ethanol content in fuel."

The National Corn Growers Association said EPA’s decision casts a shadow on all ethanol blend levels. Blends up to E15 and beyond have been tested and found suitable for a wide range of newer and older vehicles. Last month, the automotive engineering firm Ricardo found that moving from 10% ethanol in gasoline to 15% will mean little, if any, change in the performance of older cars and light trucks, those manufactured between 1994 and 2000.

The Renewable Fuels Association (RFA) said the EPA missed a chance to create new economic opportunity by limiting E15 to 2007 and newer vehicles.

"EPA’s scientifically unjustified bifurcation of the U.S. car market will do little to move the needle and expand ethanol use today," said RFA President and CEO Bob Dinneen. "Limiting E15 use to 2007 and newer vehicles only creates confusion for retailers and consumers alike. America’s ethanol producers are hitting an artificial blend wall today. The goals of Congress to reduce our addiction to oil captured in the Renewable Fuels Standard cannot be met with this decision."

The decision artificially constrains the market opportunities for next-generation biofuels, RFA said. It also said there is no scientific justification to outright deny model year 2000 and older vehicles.

Wholesale adoption of E15 is unlikely, according to gasoline marketers and retailers. In its weekly newsletter from Sept. 17, the Petroleum Marketers’ Association of America said, "Limiting the waiver to a specific class of vehicles based on date of manufacture means retailers would be forced by market conditions to carry both E-10 and E-15 product, thus increasing the risk of consumer misfueling. The good news is that the waiver will likely not require E-15 but only allow its use. Refiners are not expected to supply E-15 as a result of the waiver approval alone."

Dinneen said he was disappointed at the EPA’s implicit denial of other blends, including E12, which could be used in all vehicles and pumps immediately.

"I find it hard to believe that there is not a level between E10 and E15 at which EPA could approve for use in all vehicles," Dinneen said. "An interim step to anything above E10 for all vehicles would have a more immediate impact on the market than today’s announcement."

The American Coalition for Ethanol (ACE) agreed that the EPA’s decision will do little to increase demand for ethanol.

"Based on our discussions with fuel marketers and retailers, we are concerned about how they will weigh this restricted approval of E15 and the potential unnecessary confusion for motorists that may be created by the EPA labeling requirements," said Brian Jennings, ACE executive vice-president. "To be sure, some special interests are already lobbying EPA to design a label that will discourage even the few motorists who will be able to use E15 from doing so."

In addition to the waiver, EPA is proposing E15 pump labeling requirements, including that the fuel industry specify the ethanol content of gasoline sold to retailers. There would also be a quarterly survey or retail stations to ensure the gas pumps are properly labeled.

Agriculture Secretary Tom Vilsack said the announcement from EPA is an important step toward making America more energy independent and creating much-needed jobs in rural America.

"The announcement will help get existing ethanol capacity into the market. Increasing the use of ethanol in automobiles and light trucks not only provides biomass and biofuel producers with additional revenue enhancing opportunities, it will help us reach the Obama Administration's goal of increasing renewable fuels usage in the U.S. marketplace to 36 billion gallons by 2022."

Among the groups opposing the move were the American Meat Institute, the Grocery Manufacturers Association, the National Council of Chain Restaurants, the National Chicken Council, the American Frozen Food Institute, the American Bakers Association, the National Meat Association and the National Turkey Federation.

"EPA’s decision to increase the ethanol blend to E15 will further increase volatility in the grain markets," said Robb MacKie, president and chief executive officer of the American Bakers Association. "Other grains, including wheat, may increasingly be in shorter supply; potentially this may impact food prices in the future as the nation continues to lose wheat acreage. ABA strongly opposes this ill advised decision and calls on EPA to consult with relevant government agencies to carefully study how this would impact market volatility, to review the science behind the decision and analyze the economic impact on the already weakened economy."

Scott Faber, vice-president of federal affairs at the GMA, added, "We are disappointed in the administration’s decision to allow more ethanol in gasoline before truly sustainable advanced biofuels are commercially available. Not only will this decision adversely affect millions of consumers who don’t drive brand new cars, but also countless Americans who are struggling to feed their families in a slowly recovering economy. Recent spikes in corn prices due to supply concerns will only be exacerbated by this decision."