By Stephanie Kelly
NEW YORK (Reuters) -The Biden administration said on Thursday it approved a request from Midwestern governors allowing expanded sales of gasoline with higher blends of ethanol in their states, starting in 2025.
Reuters had exclusively reported the impending announcement earlier this week.
The U.S. government currently restricts sales of E15 gasoline, or gasoline with 15% ethanol, in summer months due to environmental concerns over smog, though the biofuel industry says those concerns are unfounded.
The news is bittersweet for the corn-based ethanol industry, which has been fighting for years for year-round sales of E15 but is frustrated by the 2025 start date, which was one year later than proposed.
The governors of Illinois, Iowa, Minnesota, Missouri, Nebraska, Ohio, South Dakota, and Wisconsin made the request for year-round E15 sales in 2022, saying the move could help them lower pump prices by boosting fuel volumes.
Some oil refiners, however, have argued that allowing E15 in select states as opposed to nationwide could prompt localized fuel price spikes and supply issues.
The delay enables the administration to put off potential price spikes stemming from the decision until after the 2024 U.S. presidential election in November. Two of the states the decision affects, Wisconsin and Minnesota, are battleground states in this year's contest.
Inflation and the economy are key vulnerabilities for President Joe Biden's re-election campaign.
The Environmental Protection Agency had sent a final rule on the proposal to the White House in December with an effective date of April 28, 2024. The new timeline would push the effective date to April 28, 2025.
"By extending the implementation date, this final action reduces the risk of gasoline supply issues this summer and the price impacts that could have come with 2024 implementation," an EPA official said on Thursday.
The EPA did not comment on whether it would issue a temporary waiver enabling E15 sales this summer.
"We cannot speculate about the 2024 summer driving season. We will continue to monitor the situation, consult closely with the Department of Energy, and be prepared to act should conditions warrant," the agency said.
(Reporting by Stephanie KellyEditing by Chris Reese)
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