Year-round E15 Given the Green Light

Posted on 05/31/2019 10:19 AM

The White House has decided to approve expanded use of ethanol fuel (year-round E15), a move that will eventually help corn farmers hurt by the trade conflict with China — and might pay political dividends for President Donald Trump in farm-belt states. The Environmental Protection Agency (EPA) issued a final rule allowing the use of gasoline blended with up to 15% ethanol year-round today.

The rule also finalized some regulatory changes to modify certain elements of the renewable identification number (RIN) compliance system regarding the Renewable Fuel Standard to improve transparency and lower price manipulation. Those include:

  • Requiring public disclosure when RIN holdings exceed specified thresholds
  • Collecting additional data to improve market transparency and enhance EPA oversight

The agency cut out the more aggressive aspects of its original proposal to track the ethanol credit market that was a component of the original E15 proposed rule. Inclusion of the measures were part of a "win-win" deal worked out by the Trump administration between refiners and the ethanol industry, meant to ensure RIN prices are kept in check. 

Oil companies and environmentalists have opposed the move to approve year-round E15, and the oil industry is preparing to go to court over it. Those likely court challenges and infrastructure constraints will likely limit the initial impact of the move. 

Biofuel and corn groups applauded the administration for following through on their pledge to finalize the rule before the unofficial start of the summer driving season on June 1. Lynn Chrisp, president of the National Corn Growers Association, says, "Farmers are facing some tough times which makes this announcement particularly welcome."

And Emily Skor, CEO of Growth Energy, said, "With year-round E15, retailers will have the regulatory certainty they need to offer American drivers a cleaner, more affordable fuel choice throughout the year. This action also means savings for American motorists at the pump and a sorely needed market for farmers who are facing a devastating economic downturn.”

Oil industry stakeholders like the American Petroleum Institute said today's waiver "does nothing to help fix the broken Renewable Fuel Standard and could ultimately harm consumers and their vehicles." Of note, API says EPA worked "outside its statutory authority and rushed through the rulemaking process in order to meet an arbitrary deadline," adding to ideas EPA's action will be challenged in court.  

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