The Environmental Protection Agency’s comment period on the long-awaited E15 rule-making ended April 29. Now, the race is on for regulators to finalize the rule as EPA Administrator Andrew Wheeler has pledged that the new rule will be in place before the start of the summer driving season on June 1.
In October 2018, the Trump Administration directed EPA to lift summertime restrictions on the sale of E15. That began the rule-making process, and on March 12, 2019, EPA released its proposed rule before opening a 45-day public comment period.
Those in the biofuel industry widely supported the proposal to extend the 1 psi Reid vapor pressure (RVP) waiver to E15 during the summer months but opposed the agency’s proposals to reform the renewable identification number (RIN) credit market. Meanwhile, other corn users opposed the change because of the impact it could have on corn prices.
Trade industry group Growth Energy wrote in its comments that it supports EPA finalizing the rule with two pathways to RVP relief by both: (1) determining that E15 fuel is substantially similar (“sub-sim”) to E10 fuel, and (2) finalizing its clarification of how RVP relief applies to regulated parties under the existing E15 partial waiver.
Growth Energy said it supports conditions in the sub-sim interpretive rule that reflect existing E15 partial waiver guidelines to prevent misfueling and allow year-round E15 use in model year 2001 and later light-duty vehicles. “We believe that the RVP rule-making presumptively pre-empts any conflicting state regulations that continue to treat E10 and E15 differently with respect to RVP,” Growth Energy noted.
The American Coalition for Ethanol (ACE) supported EPA’s proposal to extend the 1 psi RVP waiver to E15 but urged the agency to use this rule-making as a timely opportunity to take steps to deregulate the fuel market for higher ethanol blend use by allowing all mid-level ethanol blends to receive the 1 psi waiver as well as to discard of its reforms to how RIN credits are handled under the Renewable Fuel Standard (RFS).
ACE chief executive officer Brian Jennings said in written comments: “ACE strongly supports EPA’s proposal to modify its interpretation of CAA sec. 211(h)(4) so gasoline blends 'containing 10% ethanol,' including E15, would receive the 1 psi RVP waiver. This interpretation of 211(h)(4) is legally defensible, is consistent with congressional intent and reflects the realities of today’s motor fuel market.”
The Renewable Fuels Assn. (RFA) said it strongly supports the proposed rule. According to RFA, EPA’s proposed regulatory fix would allow year-round sales of E15 in conventional gasoline markets for the first time, finally opening the marketplace more broadly to a fuel that provides consumers with higher-octane, lower-cost options and reduced tailpipe emissions.
“E15 already has a proven track record for saving drivers money and reducing emissions, but the fuel has been unfairly held back by an antiquated and anticompetitive EPA regulatory barrier,” RFA president and CEO Geoff Cooper said. “President [Donald] Trump was correct when he called the summertime prohibition on E15 ‘unnecessary’ and ‘ridiculous,’ and we are pleased that EPA’s proposed regulatory amendments would finally allow gasoline retailers across the country to offer E15 to their customers year-round. When finalized, this rule will enhance competition and provide greater consumer access to cleaner, more affordable fuel options.”
RFA notes that American consumers have driven more than 8 billion hassle-free miles on E15 without a single reported problem since it was first commercially introduced in 2012. In addition, E15 typically sells for 3-10 cents/gal. less than E10 gasoline, meaning drivers are saving money with each fill-up. Further, more than 93% of the vehicles on the road today are legally approved by EPA to use E15.
In its comments, RFA discouraged EPA from finalizing any of the four proposed RIN market reforms, explaining, “While RFA is supportive of enhancing transparency in the RIN marketplace, we do not believe any of the four primary RIN reform options in the proposed rule would accomplish that objective. In fact, RFA is concerned that some of the major changes proposed by EPA may be counterproductive, undermine the efficient operation of the RIN market mechanism and greatly expand administrative burdens for all parties affected by the RFS.”
The National Biodiesel Board (NBB) disagreed with EPA’s proposal to modify RIN market regulations without first showing data-based evidence of problems within the RIN market.
“The proposed RIN market reforms are unnecessary, as EPA has yet to see data-based evidence of RIN market manipulation. Reforming a system that, while certainly not perfect, is working as intended, with no evidence of manipulation, has the potential to disrupt and even undermine the system that obligated parties use to demonstrate compliance with the RFS,” NBB wrote.
Chicken industry concerns
“As corn users, our industry faces potential impact by changes in biofuels policy, such as modifying the volatility requirements for E15 fuel blends during the summer season,” National Chicken Council (NCC) president Mike Brown said in new comments filed Monday.
In previous comments submitted regarding the proposed 2019 required volume obligations, NCC expressed concern that such an action, as anticipated at the time, holds the significant potential for having adverse impacts on the chicken industry.
“NCC believes that EPA’s E15 waiver proposal has neglected to consider the impact on the broiler industry and for poultry and livestock feeders generally,” Brown continued in the latest comments. “Providing a waiver to year-round E15 use will result in a rapid expansion of corn use under the RFS similar to the early years of the program, adding the potential for price and supply volatility in the corn market.”
Section 211(o)(7)(A) of the Clean Air Act provides that EPA, in consultation with the secretary of agriculture and the secretary of energy, may waive the applicable volumes specified in the act in whole or in part based on a petition by one or more states, by any person subject to the requirements of the act or by the EPA administrator on his own motion. This provision of the statute is known as the “off-ramp.” On two major occasions, in 2008 and in 2012, such waiver petitions were denied by EPA under the agency’s interpretation of the statute.
NCC noted in its comments that a new interpretation of the restrictions on E15 use and its impact on the corn market necessitates a new standard to trigger the RFS volume waiver. As such, NCC suggests that a predictable, transparent off-ramp fair to all involved be based on the U.S. Department of Agriculture's stocks-to-use-ratio in the June "World Agricultural Supply & Demand Estimates" report.