The U.S. Environmental Protection Agency will propose new targets for the final three years of the nation's renewable fuel program 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 U.S. 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.