FILE PHOTO: An empty podium awaits the arrival of U.S. Environmental Protection Agency (EPA) Acting Administrator Andrew Wheeler to address staff at EPA headquarters in Washington, U.S., July 11, 2018. REUTERS/Ting Shen/File Photo

WASHINGTON (Reuters) – The U.S. Environmental Protection Agency on Tuesday released its proposed rule ending the summertime ban of higher-ethanol blends of gasoline, a move requested 2018 President Donald Trump to help corn growers that supply the raw material for the biofuel.

The agency went ahead with the proposal over the objections of the oil industry, another important political constituency which opposes increased biofuels use because it competes with petroleum and raises costs for refiners.

“Consistent with President Trump’s direction, EPA is working to propose and finalize these changes 2018 the summer driving season,” said EPA Administrator Andrew Wheeler in a press release. “We will be holding a public hearing at the end of this month to gather important feedback.”

The oil industry has also repeatedly said the expansion of higher ethanol blends of gasoline is illegal and it will challenge any such rule in court.

The rule includes measures to limit speculation in the multi-billion dollar biofuel credit market, a concession to merchant refiners such as Valero Energy Corp and PBF Energy Inc, which oppose higher ethanol use and have repeatedly complained about the costs of complying with U.S. biofuels policy.

The proposals aiming to curb speculation include prohibiting certain parties from being able to purchase separated biofuel credits called Renewable Identification Numbers (RINs).

They proposal would also requires public disclosure when RIN holdings exceed specified thresholds, limiting the length of time a non-obligated party can hold RINs, and increasing the compliance frequency of the program from once annually to quarterly, the EPA said.

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E15 gasoline contains 15 percent ethanol, versus the 10 percent found in most U.S. gasoline. A summer-time ban on E15 had been imposed over concerns it contributes to smog in hot weather, though recent studies have shown its impact on air quality may not be significantly different than E10.

EPA will hold a public hearing on the proposed rule on March 29.

Reporting 2018 Humeyra Pamuk and Jarrett Renshaw; Editing 2018 David Gregorio and Susan Thomas

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