The U.S. May be Hitting its Ethanol Limit. So EPA Wants to Relax its Biofuels Goals.

Photo Credit: Chuck Olson / FlickrWhen it comes to ethanol, the United States may have reached its limit — at least for now.

Back in 2007, Congress passed a law that would require the nation to use more and more ethanol and other biofuels each year. But for reasons of chemistry and economics, those targets are becoming increasingly difficult to fulfill.

That helps explain why, on Friday, the Environmental Protection Agency took the unusual step of proposing to cut its biofuels targets for next year. The agency will require gasoline refiners to use just 15.2 billion gallons of biofuels in 2014 — down from 16.55 billion gallons this year. The new target is 14 percent lower than the original goal envisioned by Congress.

The EPA’s move is a victory for gasoline refineries, which have long argued that the original targets were unworkable. And it’s a fairly big setback for the biofuels industry, at least for the time being.

Here’s the back story: In 2007, Congress updated its Renewable Fuel Standard, which set rough targets for the amount of ethanol and other biofuels that had to be blended into the nation’s gasoline supply each year. By 2013, that target rose to 16.55 billion gallons — and it was supposed to keep rising until it hit 36 billion gallons in 2022.

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