Key Takeaways
EPA will abide by the current April 28 implementation date, granting year-round authority to certain Midwestern states to allow 15% ethanol (E15) to be sold.
Ohio, Illinois, Iowa, Minnesota, Missouri, Nebraska, South Dakota and Wisconsin asked for this authority, and were joined in their support by the American Petroleum Institute and Farm Groups.
EPA will grant waivers to states requesting more time for implementation, and some in Congress are seeking a nationwide E15 standard via legislation.
Not all are happy with the move to E15, with fuel producers concerned about increased costs for consumers, and many small engine owners are convinced that ethanol in gasoline contributes to increased maintenance problems.
Refiners have asked for more flexibility in implementing the RFS program to allow for market disruptions and to ensure small refiners can receive waivers from purchasing expensive RINs denied under the Biden administration.
U.S. Environmental Protection Agency (EPA) will uphold the current April 28, 2025, implementation date to provide parity for E15 (15% ethanol) and E10 (10% ethanol) in Midwestern states, expanding consumer access to E15 year-round in these states. The action was requested by the governors of Illinois, Iowa, Minnesota, Missouri, Nebraska, Ohio, South Dakota, and Wisconsin and will provide regulatory certainty for fuel suppliers. Last February, the Biden administration announced that the fuel would be available year-round starting this year after first proposing it in 2023. EPA also intends to consider granting requests for a one-year delay for those states seeking additional time for compliance, such as requested by Ohio.
A bipartisan group of senators recently reintroduced a bill that would allow for nationwide sales of E15. Until congressional action should occur, EPA said it will consider issuing emergency fuel waivers under the Clean Air Act to allow for the year-round sale of E15 to prevent supply disruptions and protect consumers from price volatility.
Most gasoline sold in the United States contains E10, mainly produced from corn. About 40 percent of corn produced in the United States is used to make ethanol. Under free market conditions, some ethanol is added to gasoline for its value as an oxygenate, creating a cleaner burning fuel and raising the octane rating of motor gasoline, which is helpful in today’s higher compression, more efficient engines.
The American Petroleum Institute (API) has indicated that it favors a nationwide policy on higher-ethanol blends of gasoline as some companies worry that a fragmented market could lead to localized supply disruptions. This “would prevent a patchwork of state-by-state policies while ensuring consumers have access to the fuels they depend on every day,” said Will Hupman, API’s vice president of downstream policy.
Not all oil groups, however, are in favor of EPA’s changes. The American Fuel and Petrochemical Manufacturers (AFPM) and the Fueling American Jobs Coalition are against the EPA’s decision. AFPM “calls on the affected Governors to protect consumers in their states from likely increased gasoline costs and supply disruptions by requesting more time for the market to prepare,” said Geoff Moody, senior vice president of government relations and policy at AFPM. Fuel producers are concerned about increased costs for consumers and many small engine owners are convinced that ethanol in gasoline contributes to increased maintenance problems.
In a letter to EPA administrator Lee Zeldin dated February 19, 2025, API, the Advanced Biofuels Association, the American Farm Bureau Federation, and the American Soybean Association wrote the following regarding the Renewable Fuel Standard:
Since the enactment of the Renewable Fuel Standard (RFS), our nation has benefited from increased energy security, an enhanced agricultural industry, and lower carbon fuel options. As the EPA begins work on policies that promote American energy and renewable fuels, we encourage the EPA to consider robust future renewable fuel volumes for 2026 and beyond. We believe strong, steady volumes for conventional biofuel targets, biomass-based diesel, and advanced fuels would more accurately reflect the availability and ongoing investments in feedstocks and production capacity. Additionally, it would reflect the increased demand in new markets, such as marine, rail and aviation. Our industries will work to continue providing liquid fuels with the significant renewable fuel volumes that our country needs to fuel American growth.
Additionally, we urge EPA to release multi-year standards for the RFS. Setting multi-year standards helps provide more certainty for obligated parties, renewable fuel producers, and other market participants. This certainty is critical for business planning and compliance, as well as longer term stability to promote capital investment.
Background
The RFS program was established in 2005 and was vastly expanded under the Energy Independence and Security Act of 2007. The program mandates that increasing volumes of biofuels be blended into the nation’s transportation fuel supply. It started at 4 billion gallons in 2005, rising to 7.5 billion gallons by 2012, and was increased to 36 billion gallons by 2022. After 2022, the law required EPA to set levels for conventional renewable fuel (usually corn-based ethanol), advanced ethanol alternatives made from non-edible material, and biodiesel. These quotas are then translated into blending requirements for individual refiners. Companies that do not meet their blending mandates must buy Renewable Identification Numbers (RINs) to cover the difference, unless they are a small refinery that qualifies for a hardship waiver. When determining renewable volume obligations for years after 2022, EPA must consider a variety of factors specified in the statute, including costs, air quality, climate change, implementation of the program to date, energy security, infrastructure issues, commodity prices, water quality, and supply.
Issues have come up regarding the RFS program, including quotas being set without sufficient time for preparation by refiners and biofuel producers — which led to the above letter requesting multi-year standards — and waivers from small refiners not being approved, requiring massive RIN purchases from these refiners and increasing the price of gasoline and diesel for consumers. The EPA can award exemptions to small refiners if they prove that the obligations cause them undue harm. Under the Biden administration, waivers from many small refiners were denied. The small refiners believed Biden’s decision was arbitrary, capricious, and contrary to law, prompting them to sue the agency.
Conclusion
EPA Administrator Lee Zeldin has approved the Biden EPA requirement of E15 sales year-round in the Midwest, beginning April 28, 2025. Governors of eight states requested the action, while others want a delay to better prepare for the change. Congress is considering allowing E15 sales year-round for the entire nation, which will alleviate supply disruptions and price volatility. Some industry organizations favor the change, and others do not, feeling there needs to be more time to make the necessary adjustments, which can cause higher prices for consumers. Many small engine owners fear damage to their equipment from mandated ethanol in gasoline sold to the public.
