Shares of ethanol company BioFuel Energy Corp. (Nasdaq: BIOF) was up as much as 25 percent from Tuesday’s closing price in morning trading on Wednesday.

Shares of BIOF traded as high as $1.30 per share, up from Tuesday’s close of $1.05.

Ethanol companies caught a boost late last week after it was announced that the Thursday, the EPA approved the use of up to 15% ethanol in gasoline (E15) in vehicles produced from 2001 until 2006.  Previously, the maximum gasoline blend was 10 percent ethanol.

Although it may not have an immediate impact  the EPA nod is definitely a positive sign for the industry and companies like BioFuel Energy Corp., which engages in the production and sale of ethanol and its co-products primarily in the United States. The Denver-based company has two ethanol plants that produce 115 million gallons of ethanol per year that arelocated in Wood River, Nebraska and Fairmont, Minnesota. BioFuel Energy sells its products to its third party marketer and distributor.

For the three months ended September 30, 2010, BioFuel Energy Corp. reported net sales of $114.7 million, up 4 percent form net sales of $91.1 million reported for the same quarter a year earlier.

Shares of BioFuel Energy Corp. are down approximately 78 percent over the past three months.