U.S. drafts rule to lower CO2 output from biofuels

By Timothy Gardner

NEW YORK (Reuters) - U.S. President Barack Obama's administration issued a draft rule on Tuesday aiming to cut greenhouse gasses emitted by biofuels but confirming his predecessor's target for production of corn-based ethanol.

The rule seeks to make production of U.S. corn-based ethanol more efficient and increase production of advanced biofuels. Corn ethanol has been criticized for contributing to higher food prices and indirectly causing greenhouse gas emissions by forcing forests and other lands to be burned abroad to create farmland.

Obama also called on the heads of the Environmental Protection Agency, the Department of Energy and the Department of Agriculture to chair a group to identify policies to develop advanced biofuels and increase use of "flex fuel" cars that can run on gasoline or fuel that is mostly ethanol.

Obama said in a release that the country must invest in clean energy for new jobs and to reduce dependence on foreign oil. "Through American ingenuity and determination, we can and will succeed," he said.

The new rule, issued by the EPA, confirms the schedule of the 2007 Renewable Fuels Standard, signed by former President George W. Bush, which calls for the blending of 36 billion gallons (136 billion liters) per year of biofuels into gasoline by 2022.

It calls for a maximum blending of 15 billion gallons of corn and grain-based ethanol annually into gasoline by 2015.

It also confirms the target of blending 16 billion gallons per year by 2022 of cellulosic ethanol made from substances such as switchgrass and agricultural waste. Cellulosic ethanol has shown promise as a fuel lower in carbon emissions and one that will not raise food prices, but is not yet made in commercial amounts.

"Corn-based ethanol is a bridge to the next generation of biofuels," EPA Administrator Lisa Jackson said in a teleconference about the draft rule.