US Funding Bill Includes Plan to Allow Year-Round E15 Gasoline Sales

December 18, 2024

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Stephanie Kelly and Jarrett Renshaw (Reuters) A U.S. government funding bill released on Tuesday included a plan that would allow year-round sales of gasoline with a higher ethanol blend, a major win for the corn and ethanol lobbies.

The inclusion would mark a hard-fought victory for the ethanol industry, which has wanted year-round E15 sales as a way to boost demand for its products.

Reuters reported earlier on Tuesday that the plan was expected to make it into the bill.

The plan would also provide credits to some refiners that prove compliance with the U.S. Renewable Fuel Standard (RFS), which mandates that refiners blend billions of gallons of biofuels into the nation's fuel mix or buy credits from those that do, the sources said.

Those credits would be given to small refiners who had petitioned the U.S. Environmental Protection Agency, which administers the RFS, for an exemption from the mandates during compliance years 2016-2018 but either had been denied or had an outstanding petition as of Dec. 1, 2022, one of the sources said.

The language in the provision follows a bill sponsored by U.S. Senator Deb Fischer from Nebraska, the third biggest corn-producing state.

"My bill puts an end to years of patchwork regulations and uncertainty - year-round, nationwide E15 will now be a reality," Fischer said in a statement after the funding bill text was released.

The biofuels industry welcomed the provision.

"We are very pleased to see that the long-awaited fix allowing year-round E15 is included in this package," said Geoff Cooper, president of the Renewable Fuels Association. "We remain hopeful that the continuing resolution will move swiftly through Congress and to the President’s desk for signature."

The plan also includes language that the EPA and the Commodity Futures Trading Commission would review all applicable fuel blending credits, known as RINs, and submit to Congress a report to reduce manipulation of the renewable fuel market.

Currently, sales of E15 are effectively blocked from June to September. Adding ethanol to gasoline is known to increase smog pollution in hot weather, but research has shown little difference between E15 and the more-widely available E10 blends. READ MORE

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US funding bill to allow year-round E15 sales (Argus Media)
Short-term funding bill includes E15, Farm Bill provisions (Ethanol Producer Magazine)
Ag Sector Could Score Big in Stopgap Spending (AgWeb)

Excerpt from Argus Media: The 1,547-page bill, which is set for a vote in the coming days, is needed to avoid a government shutdown that would otherwise begin on Saturday. The bill would fund the government through 14 March and extend key expiring programs, such as agricultural support from the farm bill. It would also provide billions of dollars in disaster relief and pay the full cost of rebuilding the Francis Scott Key bridge in Maryland, which collapsed earlier this year after being hit by a containership.

The inclusion of the E15 language, based on a bill by US senator Deb Fischer (R-Nebraska), marks a major win for ethanol producers and farm state lawmakers who have spent years lobbying to permanently allow year-round E15 sales. The bill would also provide short-term relief to some small refiners under the Renewable Fuel Standard that retired renewable identification numbers (RINs) in 2016-18 in cases when their requests for "hardship" waivers remained pending for years. The bill would return some of those RINs to the small refiners and make them eligible for compliance in future years.

E15 was historically unavailable year-round because of language in the Clean Air Act that imposes more stringent fuel volatility requirements during summer months. In president-elect Donald Trump's first term, regulators began to allow year-round E15 sales by extending a waiver available for 10pc ethanol gasoline (E10), but a federal court in 2021 struck that down. Federal regulators have issued emergency waivers retaining year-round E15 sales over the last three summers.

Enacting the stopgap funding bill would also make it unnecessary for eight states to follow through with a costly gasoline blendstock reformulation — set to begin as early as next summer — they had requested as a way to retain year-round E15 sales in the midcontinent. Oil industry groups last month petitioned EPA to delay the fuel reformulation until after the 2025 summer driving season, citing concerns about inadequate fuel supply and the prospects that a legislative fix would make required infrastructure changes unnecessary.

Ethanol groups say the E15 legislative change could pave the way for retailers to more widely offer the high-ethanol fuel blend, which is currently available at 3,400 retail stations and last summer was about 10-30¢/USG cheaper than 10pc ethanol gasoline (E10). Offering the fuel year-round would be "an early Christmas present to American drivers," ethanol industry group Growth Energy chief executive Emily Skor said. READ MORE

Excerpt from Ethanol Producer Magazine: The Renewable Fuels Association has applauded the E15 provisions of the bill. “We are very pleased to see that the long-awaited fix allowing year-round E15 is included in this package,” said Geoff Cooper, president and CEO of the RFA. “This language would finally remove an outdated, red-tape regulatory barrier, and we remain hopeful that the continuing resolution will move swiftly through Congress and to the president’s desk for signature. Allowing year-round sales of E15 will benefit farmers, fuel retailers, and—most importantly—consumers seeking lower-cost, cleaner fuel options at the pump.”

“RFA thanks House leadership, the Energy and Commerce Committee leadership, and dozens of House members on both sides of the aisle who staunchly advocated for the inclusion of this long-overdue provision allowing year-round E15 nationwide,” Cooper continued. “We also thank the many bipartisan ethanol supporters in the Senate who have worked tirelessly on this issue over the past several years, and we look forward to them quickly taking up and passing the CR.”

Growth Energy is also speaking out in support of the legislation’s E15 provisions. "E15 lowers emissions, saves drivers money, and increases American energy dominance,” said Emily Skor, CEO of Growth Energy. “Giving consumers the chance to choose this fuel year-round would be an early Christmas present to American drivers, the nation's rural communities that depend on a strong renewable fuels sector, and to the environment.”

“We are grateful for the tireless work of our numerous Congressional champions to get this bill included, and that Congressional leadership has endorsed this commonsense, bipartisan, bicameral energy solution, and encourage Senators and Representatives to vote in favor of this package so that year-round E15 becomes the law of the land,” Skor continued.

While the short-term spending bill may finally allow nationwide year-round sales of E15, use of E15 fuel is not new. The fuel blend has been available for use in many non-flex fuel vehicles for more than a decade. The EPA first granted a partial waiver allowing E15 to be used in model year (MY) 2007 and newer light-duty vehicles in 2010. The agency expanded that waiver to include MY 2001 and newer vehicles the following year. The fuel blend, however, could not be sold in most markets during the summer driving season, from June 1 through Sept. 15. A June 2019 rulemaking changed that, extending the 1-psi RVP waiver to E15 and allowing the fuel to be sold during the summer driving season. The EPA’s rule was challenged by oil groups and in June 2021 the D.C. Circuit Court of Appeals vacated the portion of the June 2019 related to E15, overturning the ability of most fuel retailers to sell E15 during the summer driving season. Despite the vacated rule, E15 continued to remain available during the summer 2022, 2023 and 2024 driving seasons via emergency waivers issued by the EPA.

In the absence of permanent national action on E15 availability, a coalition of Midwest governors in April 2022 petitioned the EPA to allow E15 to be sold year-round in their respective states. Following a lengthy rulemaking process, the agency in February 2024 finalized regulations that will allow E15 to be sold year-round in Illinois, Iowa, Minnesota, Missouri, Nebraska, Ohio, South Dakota and Wisconsin beginning in 2025.

California is currently the only state that does not allow E15 to be sold for use in non-flex fuel vehicles, but that could soon change. State agencies in 2018 kicked off the required review process to approve the use of the fuel blend. That process typically takes two to five years to complete but has faced delays. California Gov. Gavin Newsom on Oct. 25 issued a directive to the California Air Resources Board to accelerate efforts to approve E15 sales within the state to help lower gas prices without compromising environmental protections.

In addition to E15, the short-term spending package also includes a one-year extension of the current Farm Bill. READ MORE