EPA Proposes Allowing Year-Round High-Blend Ethanol

Gasoline with higher blends of ethanol could be sold year-round in Iowa and seven other Midwestern states beginning in 2024 under a rule recently proposed by the U.S. Environmental Protection Agency.

The proposed rule is a victory for the biofuels industry, which for years has pushed to allow sales of gasoline blended with 15% ethanol during the summer. Summer sales have been curtailed because of concerns that the higher ethanol mix would worsen smog during hot weather.

Iowa Govenror Kim Reynolds and other Midwest Governors were hoping that they could start selling ethanol this summer.

“While long overdue, I am thrilled that the EPA has approved our multistate bipartisan request that will pave the way for year-round E15 and bring certainty to the industry,” Reynolds, who last year signed a law requiring most Iowa gas stations to offer gasoline with higher blends of ethanol by 2026, said in a statement. “However, the arbitrary delay in implementation this summer is unacceptable and disappointing, but hardly surprising. Iowa won’t accept it without a fight.”

Under the proposal, the higher blend could be sold during the summer in Iowa, Illinois, Minnesota, Missouri, Nebraska, Ohio, South Dakota and Wisconsin. Most gasoline sold in the U.S. is now blended with 10% ethanol, which is allowed throughout the year.

The issue is especially important in Iowa because it is both the largest producer of ethanol and corn.

About half of all the corn grown in Iowa goes to ethanol production, and some 40% of the corn grown in the Midwest. Allowing for ethanol to be sold during the summer months will increase demand and the prices paid for corn.

“It is unconscionable for me to think that this summer, Midwestern drivers and fuel retailers will be the ones to pay the price for the illegal delay by the Biden EPA to finalize these rules,” says Iowa Renewable Fuels Association (IRFA) Executive Director Monte Shaw. “The governors’ authority is not in question. The air quality science is not in question. There is no question the EPA failed to meet the statutory deadline. Now they are using their own tardiness to justify putting off the E15 fix until 2024, leaving Midwest consumers to pay 15 cents per gallon or more than necessary.”

The American Fuel & Petrochemical Manufacturers industry group said the EPA was right to delay new rules until 2024 because summer gasoline production is already underway. Even with more lead time, the organization predicted that creating a special blend for the Midwestern states would increase costs and could lead to even tighter fuel supplies in the region because not all refiners, pipelines and terminals are ready to handle the different blend.

The EPA plans to hold a hearing on the proposed rule in late March or early April.