The US Environmental Protection Agency will propose new targets for the final three years of the nation’s renewable fuel programme in January, replacing ambitious decade-old goals set by Congress with volumes closer to the industry’s current output, two people familiar with the matter said.

The planned reset of the US Renewable Fuel Standard is likely to set up a fresh battle between two industries, with corn growers wanting the highest possible targets to spur investment, and oil companies eyeing the smallest to reduce costs.

The standard, which expires in 2022, was established in 2007 to boost the Corn Belt economy and help wean the country off of fossil fuels. Refiners are required to blend increasing amounts of biofuels like corn-based ethanol into US gasoline and diesel each year, or purchase blending credits from companies that do.

Oil companies say the policy costs them a fortune. Yet it has fallen short of original targets because production has proven more costly and inefficient than expected, even with subsidies.

The two sources, who requested anonymity because they are not authorised to speak publicly about the matter, said the EPA was planning to slash the 2022 target to bring it closer to current market realities, but added that the agency had not settled on a number.