EPA may approve use of higher ethanol blend gasoline by 2010

The US environment watchdog, the Environmental Protection Agency (EPA) yesterday said that it would probably allow an increase in the amount ethanol that could be blended with gasoline, as requested by the ethanol industry.

The maximum ethanol blend is currently 10 per cent, barring use in cars especially built to use higher blends. The agency said it would likely approve the increase to 15 per cent if tests established that the blend would not cause damage to car engines. However, this would be allowed only in cars of 2001 model year and later, the agency added.

The US ethanol industry had asked for the increase to get past what it calls the 'blend wall' which has limited the industry's growth to about 12 billion gallons of annual production. This year the industry is expected to produce and sell 10.5 billion gallons of ethanol.

With the addition of percentage points to the allowable blend the demand for ethanol would rise by 7 billion gallons, according to industry experts.

The industry needs more demand they say and if demand does not grow the industry cannot remain profitable for long.

The agency however says in a letter that it needs to make sure that it has all the necessary science behind it to make the right decision.