US: November 18, 2008


WASHINGTON - The Environmental Protection Agency Monday increased the amount of renewable motor fuels, mostly ethanol, required to be sold in the United States next year.


The higher standard is required by a law that boosts the use of renewable fuels steadily each year to 36 billion gallons by 2022 to help make gasoline burn cleaner, stretch available US motor fuel supplies and reduce petroleum imports.

Renewable fuels will have to make up 10.21 percent, or 11.1 billion gallons, of the 138.5 billion gallons of gasoline expected to be consumed in the United States during 2009, the EPA said.

That's up from 7.76 percent, or 9 billion gallons, in renewable fuel this year.

More of the increase in future supplies is supposed to come from cellulosic ethanol that will be made from wood chips, switch grass and other agricultural and forest waste. Most US ethanol is now made from corn.

The 11.1 billion gallons in renewable fuels required next year will include about 500 million gallons of biodiesel and renewable diesel, the EPA said.

Alaska is the only state not subject to the US renewable fuel standard.

A separate report on Monday from the Federal Trade Commission concluded that the US ethanol market is competitive and not controlled by a few big producers.

As of September, there were 160 US firms that produced ethanol, 57 firms more than last year.

The largest ethanol producer's share of capacity continues to fall each year as new firms enter the market and existing firms add capacity, the FTC said.

The largest US producer accounts for about 11 percent of domestic ethanol capacity, down from 16 percent in 2007, 21 percent in 2006, 26 percent in 2005 and 41 percent in 2000, the agency said.

"The report concludes that the level of concentration in ethanol production would not justify a presumption that a single firm, or a small group of firms, could wield sufficient market power to set or coordinate price or output levels, the FTC said.

(Reporting by Tom Doggett; Editing by Marguerita Choy)


Story by Tom Doggett


REUTERS NEWS SERVICE