A year-end spending bill released Tuesday would authorize year-round sales of E-15, while also returning biofuel credits to some small refineries that were denied exemptions from the Renewable Fuel Standard in 2016, 2017 and 2018.
The 1,547-page measure would allow E15, a blend of 15% ethanol and 85% gasoline, to be sold during the summer months, which currently is not allowed without authorization from the Environmental Protection Agency through temporary waivers.
House Ag Committee Chairman Glenn Thompson, R-Pa., told Agri-Pulse he saw the provisions, as “a form of economic relief” for corn and soy farmers struggling with low commodity prices.
“It’s ultimately about retailers engaging with consumers, and it’s not a mandate,” Adrian Smith, R-Neb., told Agri-Pulse of the language.
The massive bill, which also includes nearly $31 billion in disaster aid and market relief for farmers, would keep the government funded until March 14.
Refineries that retired Renewable Fuel Standard credits and submitted petitions for small refinery exemptions in 2016 and 2017, but saw those petitions left outstanding as of Dec. 1, 2022, would have those credits returned. They'd also be deemed eligible for future compliance years, according to the bill text.
Similarly, small refineries that retired credits and submitted petitions for compliance year 2018 by Sept. 1 of 2019 and had outstanding or denied petitions as of Dec. 1, 2022, would see their credits returned and would be eligible for future compliance years.
The language comes from the Nationwide Consumer and Fuel Retailer Choice Act, a bill introduced earlier this year as a way to grant year-round E15 to ethanol groups that had long sought it while also appeasing some demands by oil refiners.
Some members of the House Freedom Caucus like Rep. Chip Roy, R-Texas, have been critical of the E-15 inclusion on social media. Chip Roy, R-Texas, wrote in a post to X Monday that “E15 should not be in this disastrous CR/Supplemental, among most of the things being discussed - including a PBM bill that Pharma is dancing in the streets over…”
"Call me crazy, but we should reduce the deficit and not pass stupid policies,” Roy added.
Smith acknowledged there were “bound to be some opponents, but he added the language was a result of stakeholder meetings and “bringing folks together.”
Securing year-round authorization for E15 has long been a legislative priority for ethanol groups. The EPA currently must grant temporary emergency fuel supply waivers the fuel be sold at pumps during the summer due to a higher risk of volatility in hot weather. E10, a mixture of 10% ethanol and 90% gasoline, was afforded specific volatility regulations when the Clean Air Act was written in 1978, allowing it to be sold year-round, unlike E15.
“Legislation to ensure year-round availability of E15 in the U.S. has been at the top of our to-do list for a very long time," Brian Jennings, the CEO of the American Coalition for Ethanol, said in a statement. "We are enormously grateful to our champions in Congress who persistently worked to include this provision in the year-end package."
The first Trump administration tried to eliminate the summer restrictions on E15, but its rule was struck down by the D.C. Circuit Court of Appeals in the summer of 2021. The EPA has since issued temporary waivers on a year-by-year basis nationwide. Earlier this year, it also approved a petition from eight Midwest governors seeking to opt out of the Reid Vapor Pressure waiver program, essentially granting them the ability to seek E15 year-round in their respective states.
Renewable Fuels Association estimates suggest 3,250 gas stations offered E15 at their pumps in 2023.
Dan Basse, an economist and the president of AgResource Co., told Agri-Pulse authorization of year-round E15 sales is a “step in the right direction” for increasing biofuel production. But without mandates for higher blends or additional incentives to convince more gas stations to sell the fuel, its impacts will likely be limited, he added.
“As an economist, I can’t really forecast it being more than 50 million bushels of additional corn grind, which is about 150 million gallons of additional ethanol production,” Basse said. "Sure, we’ll take it, but it’s not enough to change the demand profile of agriculture."
Similarly, Scott Irwin, an economist at the University of Illinois, said allowing year-round E15 sales may not have immediate impacts on E15 production. Gas stations will still need to decide whether they want to sell E15, though doing away with the year-to-year uncertainty of summer fuel waivers may help spur adoption in the long-term, he said.
"I don't see it making very much difference in the short run," Irwin said. "I think that it can pick up momentum over time."
Irwin said the small refinery language in the bill could "potentially mean a very large increase in the supply of RINS" through the Renewable Fuel Standard, "which would mean a decrease in the supply of the very D6 ethanol RINS you need to incentivize E15."
Rebekah Alvey and Lydia Johnson contributed to this report.
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