NEW YORK (Reuters) – The U.S. EPA needs to look more closely at how small businesses would be affected by its proposed rule to lift the summer ban on higher ethanol blends of gasoline and make changes to the biofuel credit market, the Small Business Administration’s Office of Advocacy said on Monday.
The Environmental Protection Agency failed to follow the Regulatory Flexibility Act (RFA), which requires federal agencies to create a panel to gauge the impact of new rules on small businesses, the Office of Advocacy said. The EPA has argued the panel was unnecessary because small businesses would not be affected.
The EPA has fast tracked the rule to help make sure higher ethanol blends of gasoline would be available by June 1, but the plan could expose the agency to legal scrutiny from critics such as larger, integrated oil companies and retail gas operators.
A review would threaten the EPA’s ability to meet the self-imposed deadline. Monday was the final day to accept comments on the rule.
U.S. President Donald Trump has promised to lift a ban on gasoline blended with 15 percent ethanol, or E15, by the critical summer driving season. The roll-out of the proposal was delayed in part by the government shutdown earlier this year.
The EPA rule also calls for reforms to the compliance credit market that underpins the Renewable Fuel Standard, which requires U.S. refiners to blend biofuels like ethanol into the fuel pool or buy those credits from those who do.
The Office of Advocacy, which is independent of the SBA, says the EPA failed to consider the impacts on small businesses, such as retail operators, who are not obligated to comply with the standard.
“EPA must remedy its compliance with the RFA for this proposed rule,” the office wrote. If the EPA decides against a review, it should exempt small businesses, it said.
Reporting by Jarrett Renshaw; Editing by Sonya Hepinstall