Gasoline prices are down, but the Environmental Protection Agency is about to push them up. President Trump is committed to affordable energy, but he is also under intense pressure from the corn-state ethanol lobby.

Ethanol in the U.S. is a $34 billion industry created by a hidden federal subsidy: the Renewable Fuel Standard, or RFS, a mandate that oil refineries blend a certain total amount of ethanol into the U.S. gasoline supply. The EPA has set the level far higher than the market can absorb. That pushes refineries near bankruptcy and compels them to plead for exemptions, which anger the ethanol lobby.

The EPA proposes to make refiners take the hit for the exempted backlog of recent years in addition to the excessive mandates for 2026-27. That means higher prices, damage to car engines, and fewer good blue-collar jobs.

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The RFS is a relic of the 1970s oil shocks. President Jimmy Carter warned of “catastrophe” and lavished subsidies on “gasohol.” Oil scarcity proved fleeting, but corn-state interests had discovered an entitlement, and in 2005 Congress discovered a new rationale: climate change. Congress set aggressive RFS targets, rising to 15 billion gallons of ethanol as U.S. gasoline consumption was projected to reach 150 billion gallons. The idea was to mandate as much as car engines could safely absorb: an ethanol content of about 10%. Thus E10 was born.

Contrary to forecasts, gasoline consumption never reached 150 billion gallons. This year’s projection is 139 billion, implying a maximum feasible ethanol volume of 13.9 billion gallons. Yet the EPA insists that refineries buy at least 15 billion gallons of ethanol. It also demands that refineries absorb the cost of excess amounts from prior years.

The EPA’s chief role under the RFS isn’t environmental protection but management of special-interest grievances. The agency’s latest proposal, to reassign retroactively years of exempted obligations, is legally dubious. The EPA openly admits its action will raise fuel costs—the only one of several statutory factors that it analyzed—implicitly conceding that the statutory criteria no longer guide anything.

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The ethanol mandate is a deeply flawed policy. It does more harm than good for the environment, with an area the size of Michigan devoted to corn ethanol instead of something beneficial like natural habitat or food production—raising the prices of fuel and food as a result. If Congress could put the national interest above powerful special interests, it would repeal the RFS. That is unlikely to happen anytime soon, but there is an alternative.

Under its post-2022 authority, the EPA can lawfully lower RFS volumes annually based on factors like infrastructure constraints and economic effects. The EPA should use this authority to set a glide path that steadily reduces mandated volumes to no higher than the “blend wall” of E10 at whatever level of gasoline consumption is forecast for the next couple of years.

Given the enormous infrastructure that already sustains ethanol production, it would be competitive at close to E10 even without the RFS subsidy. But producers should be responding to price signals, not to the decrees of an agency bent on enriching them at everyone else’s expense.