Ethanol Coalition Thanks Corn Growers for Investment to Expand E85 Availability in California

(American Coalition for Ethanol (ACE)/GrainNet) The American Coalition for Ethanol (ACE) welcomes the recent announcement that several state corn grower associations are investing $1.25 million dollars to help San Diego-based fuel marketer Pearson Fuels expand availability of E85 in California.

ACE will be sharing the news with prospective E85 retailers as it exhibits alongside Pearson Fuels at the Pacific Fuels + Convenience Summit this week in San Diego.

Last fall after California Gov. Gavin Newsom issued an executive order requiring all new cars and passenger trucks sold in California be zero-emission vehicles by 2035, the Nebraska Corn Board saw a need to invest in reminding California consumers and state government officials that ethanol is a low-carbon fuel that is available right now.

Jeff Wilkerson, Director of Market Development at the Nebraska Corn Board, contacted ACE Senior Vice President Ron Lamberty, who has been working to develop ethanol markets in the state for over 20 years, to discuss possible strategies.

“Pearson Fuels came to mind immediately because of their phenomenal success building E85 volume in California,” Lamberty said.

“By helping them create even more E85 demand, the ethanol partners can see how Pearson builds that demand and try to replicate it in other markets.”

Lamberty introduced Wilkerson to Greg Jones, Director of Business Development at Pearson Fuels.

"After a couple Zoom meetings, with Greg sharing the volume Pearson’s E85 retail locations were pumping, and explaining Pearson wasn’t covering anywhere near the percentage of equipment costs ethanol supporters were paying elsewhere,” Lamberty explained, “the phenomenal ethanol volume return per infrastructure dollar spent helped Pearson Fuels open even more locations in California.

"Jeff shared what he learned with other state corn groups, and now, thanks to their funding support, Pearson can do a lot more, hopefully a lot sooner.”

Pearson pays a lower portion of the equipment cost, in part because they offer retailers turn-key entry into the E85 market, taking care of the regulatory challenges of adding E85 in California.

Even more importantly to some retailers, Pearson handles all the RINs [Renewable Identification Numbers] and CARB [California Air Resources Board] credits to supply very competitively priced E85, which has driven huge increases in volume over the past several years.

“If the low prices and greater visibility get the attention of California regulators and elected officials, it could make it easier to make the case for E85 as a low- to net-zero carbon fuel right now and into the future.” READ MORE

Excerpt from Pearson Fuels/PR Newswire: The Nebraska Corn Board (NCB), along with the corn checkoff programs from Kansas and Missouri, will provide California fuel retailers $1.25 million over the next year to increase availability of E85 (an 85% ethanol blend). Fuel will be supplied by Pearson Fuels, the largest E85 distributor in California with nearly 250 retail stations located throughout the state.

Growers from the three corn checkoff organizations met with representatives from Pearson Fuels in San Diego in July to discuss potential opportunities to grow E85 demand. California is by far the largest E85 market in the country, accounting for over 40 million gallons in 2020 and is on track to reach 50 million gallons in 2021.

Prior to the group's meeting in San Diego, growers toured retail sites in Los Angeles, including two locations previously funded by NCB. "These stations are moving a tremendous volume of E85," said John Greer, NCB District 2 Director. "One station alone would use about 50,000 bushels of corn in the form of ethanol in just a year. The investment is already proving worthwhile for our corn growers."

Greg Jones, director of business development with Pearson Fuels, says California remains underdeveloped for E85. The state has 39.5 million people but trails both Iowa and Minnesota in total E85 stations.

Jay Schutte, Missouri Corn Merchandising Council Chairman, took part in discussions in San Diego and was impressed with the potential expanded partnership. "Our infrastructure grant dollars, teamed with Pearson Fuels' marketing and local expertise, will allow us to increase ethanol sales faster in California compared to anywhere else in the country."

While California's Low Carbon Fuel Standard incentivizes so-called "zero-emission vehicles" powered by electricity or hydrogen, ethanol has reduced more greenhouse gas emissions than any other fuel, according to data from the California Air Resources Board. "Our ethanol will continue to be a low-carbon, high-octane fuel that offers Californians immediate benefits," said Kent Moore, Kansas Corn Commission President. "Flex fuel vehicles using cleaner burning and more affordable E85 can be widely deployed there to meet the state's goals quicker than any other technology."

California's battery electric vehicle tally at the end of 2020 was close to 370,000 – only 1.3% of all light-duty vehicles on the road. For comparison, more than 1.1 million drivers own flex fuel vehicles. The state still has more than 25 million other cars on the road using non-flex fuel, internal combustion engines. "The ceiling is high for E85," Greer said, "but FFVs and E85 need to be more widely available."

Pearson Fuels' E85 will continue to become a cleaner fuel for California drivers. "Our goal is a completely renewable E85 gallon by replacing gasoline with renewable naphtha," said Jones. "This is a fuel all Californians could use, especially those who can't afford substantially higher-priced electric vehicles." READ MORE