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Indiana Farmers Playing Ethanol Guessing Game Until Fuel Standard Updated

Seth Anderson

Indiana farmers and ethanol producers are in limbo as they wait for the Environmental Protection Agency to decide how much of the biofuel should be blended into the nation’s gasoline.

Indiana is one of the largest ethanol producers in the U.S. And every year, thanks to a law known as the Renewable Fuel Standard, the EPA decides on how much of that ethanol gets mixed with gasoline.

In 2013, the EPA proposed to cut the biofuel requirement. But Purdue University energy economist Wally Tyner says the response to the cuts was so strong, the EPA decided to postpone finalizing the changes indefinitely.

“They got comments, and they got thousands, tens of thousands of comments, and by law they are supposed to consider all of the comments, and of course, that’s kind of hard to do,” Tyner says.

Ken Parrent, director of biofuels at the Indiana Corn Marketing Council, predicts it’s very unlikely the EPA would drastically change the RFS. But the uncertainty might hinder future growth.

“You know, you’re looking at a $200-300 million investment to build new ethanol plant, maybe more in some cases and with all the uncertainty about the future of RFS and where demand for ethanol might be, nobody is going to invest that kind of money,” Parrent says.

Until a decision is made, gasoline companies will just have to guess how much ethanol they blend into their fuel.

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