U.S. EPA issues waiver to allow temporary sales of summertime higher-ethanol fuel

© Reuters. FILE PHOTO: A sign advertising E15, a gasoline with 15 percent of ethanol, is seen at a gas station in Clive, Iowa, United States, May 17, 2015. REUTERS/Jim Young

By Stephanie Kelly

NEW YORK (Reuters) -The U.S. Environmental Protection Agency issued an emergency waiver for a higher-ethanol gasoline blend on Friday, allowing summertime sales of the fuel in an attempt to help lower gasoline prices at the pump.

The move represents a temporary win for the biofuels industry and corn farmers, as it will likely expand sales of corn-based ethanol, and a setback for oil refiners, which view ethanol as competition.

It also is an attempt to temper the pace of inflation which has surged to a 16 year high.

Rising consumer prices are seen as a major vulnerability for President Joe Biden's Democratic party leading into the November mid-term elections.

Biden first unveiled the plans to expand E15 sales earlier this month during a trip to an Iowa ethanol plant.

About 2,500 gas stations sell the higher-ethanol gasoline blend, called E15, as it is made up of 15% ethanol. There are more than 100,000 gas stations nationwide.

At current prices, E15 can save a family 10 cents per gallon of gas on average, said White House Press Secretary Jen Psaki in a statement on Friday.

E15 sales have been restricted during summer 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 10% blends sold year-round.

The EPA on Friday said that consumers can use E15 without concern that its use in the summer will impact air quality.

EPA's emergency fuel waiver will go into effect on May 1 and will last for 20 days.

Though Friday's waiver for summertime E15 is temporary, biofuel advocates have pushed for a permanent way for the fuel to be made available year-round. Governors from eight Midwest states, many of which are major corn producers, took action this week to try to allow year-round E15 in their states.

"We commend Administrator (Michael) Regan and his team at EPA for acting quickly and decisively to implement the emergency fuel waiver announced recently by President Biden," said Renewable Fuels Association President Geoff Cooper.