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Hard Habit to Break - How Will EPA's Plan for Year-Round E15 Sales in Eight States Play Out?

At first glance, the Environmental Protection Agency’s (EPA) proposal to facilitate increased sales of E15 — an 85/15 blend of gasoline blendstock and ethanol — by putting it on the same summertime regulatory footing as commonly available E10 in eight Midwest/Great Plains states might seem like a boon to corn farmers and ethanol producers. But as we discuss in today’s RBN blog, there are a number of economic, practical and even psychological barriers to broadened public access to — and use of — E15 that go well beyond the specific regulatory issue the EPA proposal addresses. As a result, as we see it, EPA’s plan is unlikely to boost E15 demand in any meaningful way, at least for now.

Responding to pleas by the governors of eight Corn Belt states — Illinois, Iowa, Minnesota, Nebraska, North Dakota, Ohio, South Dakota and Wisconsin (see Figure 1) — EPA, earlier this month, proposed a plan that removes a regulatory advantage that E10 has vs. E15 during the summer months. More specifically, EPA said that it would hold a public hearing early this spring on the agency’s proposal to eliminate (next year, in the eight states in question) a decades-old waiver in the Clean Air Act that allows E10 sold during the summer months to have a Reid Vapor Pressure (RVP) one pound per square inch (1 psi) higher than otherwise permitted for gasoline, essentially putting E10 and E15 on an equal footing. (More on that in a moment.) The move was praised by the governors and corn and ethanol advocates, but they criticized the EPA’s plan to delay implementation of the rule to 2024 to give refiners, blenders and service stations more time to make the switch — they wanted to eliminate the E10 RVP waiver effective June 1 this year.

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