
                         Roanoke Times
                 Copyright (c) 1995, Landmark Communications, Inc.

DATE: SATURDAY, April 29, 1995                   TAG: 9505010042
SECTION: NATL/INTL                    PAGE: A6   EDITION: METRO 
SOURCE: ASSOCIATED PRESS
DATELINE: WASHINGTON                                 LENGTH: Short

COURT: EPA CAN'T REQUIRE GAS ADDITIVE

In a blow to farmers, a federal appeals court ruled Friday that the government can't require corn-based ethanol as an additive in a cleaner-burning gasoline now sold in 17 states.

The cleaner, reformulated gasoline has been on the market since January under an Environmental Protection Agency directive to help reduce smog-causing pollution from motor vehicles.

The gasoline burns cleaner and emits 20 percent less pollution because of higher levels of oxygen. But there has been a bitter dispute over what kind of oxygen additive should be used - ethanol from corn or the petroleum-based methanol derivative MTBE.

At stake are hundreds of billions of dollars.

Agriculture groups estimate that a 30 percent market share of the oxygen additive - as the EPA had sought to impose - would require 650 million gallons of ethanol a year with revenue to farmers and related industries of as much as $1.5 billion annually.

The EPA had wanted to assure that ethanol, an environmentally friendly and renewable product, be allowed a substantial market share even though refiners generally favor the petroleum-based MTBE. The EPA rule issued last year would require ethanol to be at least 30 percent of the oxygenate.

But the U.S. Court of Appeals, which last September put a temporary hold on the EPA's ethanol mandate, ruled Friday that the agency had gone beyond its authority in setting a minimum market share for ethanol.

The three-judge panel concluded that while the EPA had ``the authority to set a standard'' for cleaner gasoline under the 1990 Clean Air Act, it could not ``mandate the manner of compliance or the precise formula'' for the fuel.

by CNB