EPA approves E15 gasoline for cars made since 2001

WASHINGTON (Reuters) - The Environmental Protection Agency has approved a boost in levels of corn-based ethanol in gasoline for vehicles built in the last decade, a move the automobile industry and food producers fear will raise costs.

The agency on Friday approved gasoline containing up to 15 percent ethanol, known as E15, for use in vehicles built from 2001 to 2006, up from 10 percent now.

The EPA already in October approved a similar increase in ethanol for cars and trucks built in 2007 and later.

"Recently completed testing and data analysis show that E15 does not harm emissions control equipment in newer cars and light trucks," said EPA Administrator Lisa Jackson.

"Wherever sound science and the law support steps to allow more home-grown fuels in America's vehicles, this administration takes those steps."

The EPA's decision now allows E15 gasoline in more than half the cars and trucks on U.S. roads.

However, service station owners are worried that putting higher ethanol blends in older cars could lead to lawsuits if the fuel damages their engines.

The industry will also have to pay for new blender pumps and storage tanks to sell E15, which could stall adoption of the fuel.

Livestock feeders and food makers also fear that E15 gasoline will push up corn prices because of increased demand from ethanol makers for the grain. Most U.S. ethanol is made from corn.

(Reporting by Tom Doggett; Editing by Marguerita Choy)