Policy Positions: The Need for Higher Ethanol Blends

Recognizing that biofuels can be a vital contributor to America’s energy and economic security by displacing imported crude oil and refined gasoline, the Energy Independence and Security Act (EISA) of 2007 expanded the Renewable Fuels Standard (RFS) to 36 billion gallons in 2022.

Today, virtually every gallon of gasoline sold in the U.S. contains ethanol, 98% as E10 (up to 10% ethanol for conventional autos) and 2% as E85 (85% ethanol/15% gasoline for use in flex fuel vehicles only). Current law and infrastructure preclude the use of greater than 10% ethanol blends in conventional autos.

The E10 Blend Wall is Rapidly Approaching

As you can see from the chart below, the RFS requirement will exceed the ability to blend E10 beginning in 2012. The E10 market reaches saturation at approximately 12.5 - 14 billion gallons of ethanol:

– 2010 RFS = 10.6 bg (conventional + undifferentiated advanced)

– 2011 RFS = 12.3 bg (conv. + und. advanced + cellulosic)

– 2012 RFS = 13.15 bg (conv. + und. advanced + cellulosic)

– 2013 RFS = 14.2 bg (conv. + und. advanced + cellulosic)

Mid‐Level Blends as an Option

The market for ethanol and other biofuels must expand to ensure that America’s renewable fuels industry continues to grow and evolve. Efforts to accelerate the availability of FFVs and E85 infrastructure are critical to the long-term viability of the industry and the ability of refiners to meet the 36 billion gallon RFS. In the nearterm, however, it is critical that the Federal government revisit the existing limit on ethanol blending – today capped at 10 percent of each gallon of gasoline – and allow gasoline blenders and refiners to take full advantage of the benefits of ethanol blending. Prompt approval of the use of higher level blends of ethanol is critical in the near term to stabilize today's industry.

The RFA supports the Clean Air Act waiver request filed with the U.S. Environmental Protection Agency (EPA) to allow up to 15 percent ethanol blends. To qualify for a fuel waiver, one must be able to show that the fuel additive will not “cause or contribute to a failure of any emission control device or system.” To date, no such failure has occurred in automotive testing for mid‐level blends (mostly E15 and E20).

The EPA has suggested it will be ready to rule on the waiver request by fall 2010.  While EPA's announcement of the delay (it was to rule by 12/1/09) spoke positively about E15, it also contains some troubling aspects.  Chiefly, EPA's apparent path is to limit E15 blends to 2007 and newer vehicles, while waiting to approve E15 for model year 2001 and newer vehicles later this fall.  Such a restriction could effectively eliminate 40% or more of the market and lead to potential confusion among consumers and gasoline retailers alike. And the restriction is unnecessary.  A new engineering analysis completed in September 2010 by Ricardo, Inc. affirms that E15 is safe for use in vehicles from model years 1994 to 2000.  Click here to view the report.

EPA needs to look at making this a truly full waiver, rather than bifurcating the vehicle market.  In addition, EPA has the authority to immediately approve an intermediate blend of 12%.  The approval of E12 would lead to some immediate breathing room in the market while the issues surrounding the E15 waiver are resolved.

An immediate move to E12 is both prudent and scientifically supportable. Such action should be viewed as substantially similar to the E10 blend sold across the country today. It is our hope that after a thorough and comprehensive review based on sound science, the EPA will allow for increased blends of ethanol for E12, and that such a review can be achieved expeditiously within existing regulations, and will provide a great degree of stability and opportunity in the marketplace. By allowing for an increase in the blend rate to E12, it will assure that our industry will continue to grow and prosper in this challenging economic climate.

The RFA is committed to working with its partners, including the Coordinating Research Council, U.S. Department of Energy, State of Minnesota, trade groups, and importantly the auto and small engine communities to ensure the data on materials compatibility, drive‐ability, durability and emissions supports this effort.