The Environmental Protection Agency is expected to raise the maximum amount of ethanol that can be blended with gasoline for vehicles manufactured since 2007.
According to people with knowledge of the announcement, the EPA may say as soon as Wednesday that the newer vehicles are able to handle 15 percent ethanol, up from the current maximum of 10 percent for the corn-based fuel.
The sources spoke on condition of anonymity because they were not authorized to discuss the decision.
The ethanol industry has maintained that there is sufficient evidence to show that a 15 percent ethanol blend in motor fuel will not harm engine performance.
But the auto industry, environmentalists and a broad coalition of other groups have argued against an increase and called for more testing.
Opponents argue that the increase in production of corn and its diversion into ethanol is making animal feed more expensive, raising prices at the grocery store and tearing up the land.
Manufacturers of smaller engines - used in everything from lawn mowers to boats - also oppose increasing the use of the fuel, saying those engines are not designed for the higher concentrations.
The EPA has said a congressional mandate for increased ethanol use can't be achieved without allowing higher blends. Congress has required refiners to blend 36 billion gallons of biofuels, mostly ethanol, into auto fuel by 2022.
The ethanol industry says increased consumption of the renewable fuel creates new jobs and replaces imported oil. The industry group Growth Energy petitioned the EPA to raise the blend earlier this year.
The agency is expected to make a second decision on the ethanol concentration allowed in cars manufactured between 2001 and 2007 after more testing is completed at the end of November.
If the higher blends are not allowed for the older cars by the time the 15 percent blend is on the market, it could cause confusion at the pump since different cars could use different blends of gasoline.
The decision was initially expected in December but was delayed twice as the agency and the Energy Department completed testing.