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EPA set to finalize rule on state sales of higher-ethanol gasoline blend - Regan

By Stephanie Kelly

NEW YORK, Sept 13 (Reuters) - The U.S. Environmental Protection Agency intends to finalize a rule before next summer to allow the year-round sale of gasoline blended with a higher level of ethanol in several states, EPA Administrator Michael Regan said on Tuesday.

The EPA has engaged with several Midwestern governors after they asked the agency earlier this year to allow year-round sales of the blend, known as E15, Regan said during remarks at the Growth Energy Biofuels Summit. The move would be a win for the ethanol industry, which wants E15 to be sold year-round to expand sales for corn-based ethanol.

A summertime ban on E15 was imposed over concerns it contributes to smog in hot weather, though research has shown that the 15% blend may not increase smog relative to the more common E10 sold year-round. E10 contains 10% ethanol.

Under the Clean Air Act, governors can ask the EPA to put the specifications for volatility of E15 and E10 on equal footing. The Midwest governors told the EPA on Thursday that they are pursuing this route to enable year-round E15 sales.

Regan added that beyond E15, the agency is coordinating with the Department of Agriculture and Department of Energy on biofuel blending requirements past 2022.

Under the Renewable Fuel Standard, oil refiners must blend billions of gallons of biofuels into their fuel mix or buy credits from those that do. While Congress set out specific goals through 2022, the law expands the EPA's authority to change the way the RFS is administered. Starting next year, the agency will have leeway to set multi-year mandates and make other changes.

The agency understands the requirements are of great importance to the biofuels industry, Regan said on Tuesday. Regan added that agriculture and the biofuels industry will play a key role in helping President Joe Biden meet climate goals, as the electric vehicle market will not be available immediately.

Deputy Secretary of Agriculture Jewel Bronaugh, who also spoke at the summit, said that biofuels will play a crucial role in boosting U.S. energy independence going forward.

(Reporting by Stephanie Kelly, Editing by Louise Heavens and Bernadette Baum)

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