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NEW YORK, Jan 12 (Reuters) - The U.S. government on Thursday said that ethanol is better for the environment than previously expected in a report boosting the country's biggest biofuel a week ahead of a new administration that has some in the industry concerned.
The report, the first of its kind from the U.S. Department of Agriculture (USDA) to examine the actual impact of ethanol, said the biofuel reduces greenhouse gas (GHG) emissions by 43 percent relative to gasoline.
That marks a potential blow to critics who have questioned whether ethanol, the foundation of the country's biofuels program, is better for the environment than petroleum-based fuels.
The analysis puts the emissions benefits at the high end of those outlined by the U.S. Department of Energy and comes just a week ahead of the inauguration of President-elect Donald Trump. Trump voiced support for ethanol on the campaign trail, especially in Iowa, but at least two of the major players in the incoming administration are critics of the country's biofuels program and environmental regulations.
The Renewable Fuel Standard (RFS) was signed into law by George W. Bush in 2005 and sets annual requirements for used of biofuels including ethanol. It has become a battleground for entrenched oil and corn interests in Washington.
Uncertainty over the future of the program grew after Trump's nomination of Oklahoma Attorney General and regulation critic Scott Pruitt, Trump's nominee to head the Environmental Protection Agency, the agency that oversees the RFS program. Trump has also appointed billionaire and RFS critic Carl Icahn as a special advisor.
Greenhouse gas emissions from ethanol are less than some forecasts because less land use was dedicated to it than expected and corn yields have risen, the analysis showed. The analysis compared the biofuel with 2005 gasoline, before regular blending of the fuel with ethanol. Now, most gasoline is blended with about 10 percent ethanol.
USDA Agriculture Secretary Tom Vilsack said in a statement that the "report provides evidence that corn ethanol can be a GHG-friendly alternative to fossil fuels, while boosting farm economies."
The analysis forecasts the emissions cuts, versus gasoline, to rise to 50 percent by 2022 if trends in corn yields, fuel switching and efficiency continue.
"This should answer the critics who have repeated Big Oil's polemic that renewable biofuels somehow increase carbon emissions," said Renewable Fuels Association President and CEO Bob Dinneen. (Reporting by Chris Prentice; Editing by David Gregorio)