WASHINGTON (Reuters) - Twenty companies, including Archer-Daniels-Midland Co and Cargill Inc, have been cleared to produce the new ethanol grade called E15, a significant step toward putting the higher blend biofuel on sale, the government announced on Monday.

Most fuel sold at filling stations is a 9-to-1 blend of gasoline and corn-based ethanol. The ethanol industry proposed E15, a 15 percent blend, three years ago.

The Environmental Protection Agency said it approved the first applications to register ethanol to make E15, "a significant step toward its production, sale and use" in cars and light trucks built since 2000. E15 is barred from use in light equipment or in older vehicles.

"Perhaps as early as summer we could see E15 at fuel stations in the heartland of America" said Bob Dinneen of the trade group Renewable Fuels Association. Tom Buis of Growth Energy, another trade group, said E15 would help hold down fuel prices, which top $4 a gallon nationwide.

Before E15 goes on sale, EPA must approve steps to prevent misfueling of E15 and a monitoring program to make sure the fuel is marked and sold properly. Some states also must adjust their fuel regulations.

Only a relative handful of the more than 100,000 U.S. fuel stations have pumps designed to dispense mid-level or high-blend ethanol fuels. The government and industry groups offer help in paying for so-called blender pumps.

"These first approvals are a clear indication that fuel producers understand that America's motorists want a choice when they fill their gas tanks," said Agriculture Secretary Vilsack.

The EPA list of approved companies was available on the Internet at http://www.epa.gov/otaq/regs/fuels/additive/web-e15.htm

(Reporting By Charles Abbott; Editing by David Gregorio)