U.S. Plans Year-Round Sales Of Higher Ethanol Fuel Next Year

The Biden administration plans to begin year-round sales of E15 fuels across eight states in the Midwest next year, Reuters has reported, citing the Environmental Protection Agency.

According to the EPA, the move will help reduce retail fuel prices, Reuters noted in its report, but there was not enough time to finalize all the necessary regulations by this summer, so the start had to be postponed until 2024.

"There would be a significant disruption to consumer pricing and the like if we moved too quickly in 2023," the Administrator of the EPA, Michael Regan said, as quoted by Reuters. "We feel very confident that E15 being sold year-round will be eligible and ready to go in 2024."

Currently, the EPA has an effective ban on E15 fuel sales for the summer season because it contributes to smog but last year the ban was lifted to lower prices at the pump.

Also, Reuters noted that research had emerged suggesting E15 fuels did not contribute to smog formation any more than E10 fuels that contain 10% ethanol instead of 15%.

Yet for some, this is a political win for the corn lobby: the eight states that will see year-round E15 fuel sales include the biggest corn producers in the country: Nebraska, Iowa, and Illinois.

The increase in ethanol blending mandates that the EPA approved last year boosted the price of corn considerably, as well as the price of other crops.

Oil refiners, on the other hand, are pushing against the E15 mandates, which hurt their profit margins. Under the Renewable Fuel Standard (RFS), oil refiners are required to blend growing amounts of renewable fuels into gasoline and diesel.

Refiners that don’t have the infrastructure to blend biofuels must purchase tradeable blending credits known as Renewable Identification Numbers, or RINs. These do not come cheap but small refiners can get exemptions if they show proof the expense for RINs is hurting their bottom lines.

By Charles Kennedy for Oilprice.com

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