NEW YORK (Reuters) - The U.S. Department of Agriculture (USDA) plans to inject $100 million in funding to get more ethanol at the gas pump, according to two industry sources, the latest push to get beyond a "blend wall" that has capped demand for the biofuel.
That would mark a big push for an overhaul of fuel-blending pumps and related infrastructure to generate higher demand for the biofuel. The USDA is expected to announce the funding on Friday, the sources said.
A USDA spokesman declined to comment on the plans.
Ethanol groups have asked the USDA to continue to offer this funding amid rising calls for policy reform from policymakers, oil companies, and environmentalists. The USDA launched a program in 2011 designed to get 10,000 flex-fuel options at gas pumps nationwide that would allow use of blends as high as E85, which is 85 percent ethanol.
The United States sets use requirements for biofuels, including ethanol, through the Renewable Fuel Standard (RFS) program, but has delayed setting targets for the current year and 2014 amid concern from oil companies that ethanol use has hit a saturation point without major infrastructure changes.
The plans come as oil companies and biofuels producers await a proposal from the Environmental Protection Agency (EPA) on biofuels use requirements for 2014, 2015, and 2016, widely expected to be announced on Friday.
(Reporting by Chris Prentice; Editing by Diane Craft)