Summertime E15 decision must be made to allow year-round sales
Minnesota Corn Growers Association (MCGA) President Richard Syverson submitted comments to the U.S. Environmental Protection Agency (EPA) urging the agency to implement a plan that would allow for permanent year-round E15 sales in eight Midwestern states, including Minnesota, no later than April 2024. Syverson also urged the EPA to use its existing authority to prevent a disruption in E15 availability this summer. EPA has been collecting comments in response to a request from eight Midwestern states to remove the volatility waiver, limiting E15 sales in the summer. MCGA Treasurer Jim Kanten provided verbal testimony at a hearing last month.
Since 2019, consumers and retailers have benefitted from uninterrupted market access for lower-cost, lower-emission E15 fuel (known as Unleaded 88), offered as a choice on the same terms as regular fuel, a 10 percent ethanol blend. Following legal action from the oil industry in 2019, EPA’s prior regulatory effort to remove outdated and unnecessary market access barriers to E15 was upended, resulting in ongoing uncertainty for consumers and retailers.
As bipartisan efforts from Congress to address regulatory barriers have continued to hit roadblocks, governors took the matter into their own hands and utilized a provision in the Clean Air Act for a solution that would reduce emissions in their states and ensure consumers continue to have the choice of this cleaner, lower-cost fuel.
Minnesota is a national leader in ethanol production and use and Minnesota has a lot to lose if consumers cannot pump lower-cost, lower-emission Unleaded 88 (E15) fuel year-round. The state has the highest number of retail fuel locations that offer fuel blends that exceed 10 percent ethanol (87 octane). At the end of 2022, nearly 430 Minnesota fuel retail locations offered Unleaded 88, and in 2024, that total will increase to nearly 475 locations thanks to a state program to help station owners install the infrastructure to support offering Unleaded 88.
In 2022, sales of Unleaded 88 in Minnesota exceeded 105 million gallons, setting a statewide record. A disruption of Unleaded 88 sales during the summer months would present a significant obstacle for the positive momentum for higher ethanol blends in Minnesota. Minnesota has the highest ethanol blend rate in the nation.
For the most recent year where E15 sales were not allowed in the summer, 2018, sales of E15 dropped nearly 60 percent. Further, even when sales were allowed to resume in September, it takes months to rebuild momentum to reach sales levels prior to the summertime ban—time when consumers could be saving money and vehicles could reduce emissions with the cleaner burning fuel.
Governors submitted their initial request to remove the volatility waiver in eight Midwestern states and supporting data to EPA on April 28, 2022, nearly a year ago. Petitioning states provided sufficient lead time for EPA to respond and implement removal of the volatility waiver for the summer 2023 driving season. However, EPA significantly exceeded the 90-day limit for review, not issuing this proposal until March. EPA’s delayed response to the Midwest states has left consumer access to lower-emission and lower-cost fuel in question for summer 2023.
When submitting their petition, Midwest states also submitted data demonstrating emissions reductions from the use of Unleaded 88 fuel and EPA agreed with the information submitted. However, the EPA assessment does not adequately assess corresponding cost savings to consumers in these states from requiring lower volatility gasoline blendstocks, which enables full market access for Unleaded 88. With ethanol priced 20 cents less per gallon than regular unleaded, blending more ethanol in each gallon of finished fuel not only increases the fuel supply but also reduces the final cost of the fuel. The cost savings to consumers for a gallon of Unleaded 88 compared to a gallon of regular fuel far more than offsets any expected cost on the fuel refining side of the equation.
According to data from the Minnesota Department of Commerce, Unleaded 88 fuel blends were on average 17 cents less than regular fuel blends with 10 percent ethanol. The data demonstrates that consumers choose higher blends of ethanol due to the lower cost, clean air, and octane benefits. According to a new study commissioned by the Minnesota Biofuels Association, the statewide use of E15 in Minnesota would save consumers $84 million and reduce greenhouse gas emissions by 1.02 metric tons.
Minnesota Corn Growers Association strongly urges EPA to implement this rule with the proposed 2024 effective date, enabling these eight governors to cut emissions and fuel costs in their states, in accordance with the Clean Air Act. MCGA and National Corn Growers Association also urge EPA to again use existing emergency authority to prevent a disruption in E15 availability and a reduction in the fuel supply during the summer of 2023 before this rule becomes effective.
