The U.S. government will continue to require ethanol be blended with motor fuels, but at lower volumes than originally proposed—a decision that received unenthusiastic praise from groups on both sides of the debate.

The federal Renewable Fuels Standard requires ethanol and other renewable fuels to be blended with petroleum-based fuels, but at levels largely set by the Environmental Protection Agency. The agency announced Wednesday that it was setting blending levels for the coming year below those proposed in the original law, which observers interpret as the first step in a possible overhaul of the program, Reuters news agency reported. http://reut.rs/2tM3ld0

Oil and gas industry associations such as the American Petroleum Institute have long sought to eliminate the standard. Biofuels associations have sought to preserve and strengthen it. Wednesday's announcement left both sides only partly satisfied, with the realization that the real battle about the continuation of the program is in the future.

"Today's proposal reaffirms the importance of RFS reform, as it is essential that Americans have access to fuels they want and can safely use in their vehicles. Congress must fix this broken, outdated program," API Downstream Group Director Frank Macchiarola said. http://bit.ly/2tQ4aRw

Ethanol groups saw the EPA decision as a sign of President Donald Trump's support for biofuels, but also cautioned against further reductions in blending targets.

"While we are pleased with the EPA and administration's commitment to a 15-billion-gallon target for conventional biofuels, we would like to see final levels for cellulosic and advanced biofuels continue to give producers and stakeholders certainty in their investment in second generation technology," Growth Energy CEO Emily Skor said. http://bit.ly/2tulzgu

"We are concerned that by reducing the cellulosic RVO (renewable volume obligations, this proposal may weaken the signal to the marketplace and we want to better understand EPA's methodology," Renewable Fuels Association CEO Bob Dinneen said. "With many current ethanol producers investing in bolt-on technologies to produce cellulosic ethanol from existing facilities, we want to ensure that the final 2018 RVO continues to grow the market for cellulosic biofuels." http://bit.ly/2sts1TS

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