The EPA will allow eight states in the Midwest to offer E15 sales during the summertime driving season but said in a Thursday rulemaking that the implementation of that allowance will be delayed until 2025.
The fuel access will be offered to Illinois, Iowa, Nebraska, Minnesota, Missouri, Ohio, South Dakota and Wisconsin -- whose governors petitioned the EPA since April 2022 to remove the 1-psi summertime waiver on E10 for their states.
Those petitions come with the requirement that states prove current implementation of the ban actually increases vehicle emissions, which the agency said on Thursday was met as the petitioners offered "sufficient" evidence in their submitted documents.
The move garnered mixed applause from proponents for the ethanol industry, who were pleased to see multi-state summertime access after lobbying the government for years to get rid of a provision established under the Clean Air Act that bars sale of the fuel during the high ozone season from June 1 to Sept. 15.
Yet some of those same proponents also lamented the agency's decision to move implementation to next summer, after the eight governors originally sought access to the fuel blend for summer 2023.
The new implementation date also drew concern from groups representing refiners, who have argued since the initial rulemaking from EPA that the industry would need at least a two-year lead time to prepare their systems for summertime access in the region.
The EPA had initially intended on offering access by April 28, 2024, in its first rulemaking from March 2023, but said in its Thursday guidance that it decided to push the date using authority offered under the CAA should it find that implementation of petitions will result in "insufficient supply of gasoline" in those states.
"To minimize other impacts and enable production and distribution of low-RVP gasoline, refiners and fuel distributors will need time to make capital investments to optimize the fuel production and distribution system to replace the gasoline solely in the petitioning states with low-RVP gasoline," the agency said in the rulemaking.
The agency added that, without the time to make those investments, "a refinery that lacks the additional tankage will likely need to shift all its production to low-RVP CBOB."
And those concerns, along with the associated impacts on fuel supply in the surrounding states not included in the allowance, resulted in the EPA saying that "the circumstances that justified a finding of insufficient supply of gasoline and extension of the effective date for 2023 have not attenuated."
Geoff Cooper, president and CEO of the Renewable Fuels Association, warned the agency in a statement that delayed implementation will only foment uncertainty and confusion among consumers over the availability of E15 this summer.
And the group is "extremely disappointed" that the agency will place the consequences of its missed statutory deadlines on ethanol producers, farmers, fuel retailers, and consumers in those states, Cooper said.
Monte Shaw, executive director at the Iowa Renewable Fuels Association, also noted in a statement that "the last-minute delay in implementation means motorists face fewer options and higher prices at the pump this summer."
"This further delay is unnecessary and unjustified," Shaw said, "... [and] feels like a slap in the face to Midwest motorists."
And Brian Jennings, CEO of the American Coalition for Ethanol, said "it must be pointed out EPA's own foot-dragging is responsible for postponing year-round E15 in these 8 Midwest states until 2025."
Given the impact that the rulemaking will have on the ability for retailers to offer E15 at their terminals this summer, Cooper implored the Biden administration to issue yet another series of 20-day emergency waivers on sale of the fuel blend as it has over the past several summers under a CAA provision triggered by fuel supply concerns.
"With the 2024 summer driving season just a few months away, we are urging the administration to take additional action that will ensure consumers have uninterrupted access to lower-cost, lower-carbon E15 this summer," Cooper said.
And Emily Skor, CEO of Growth Energy, said in a statement that, "while this is great news, drivers will need a solution for this summer to minimize disruptions and make sure they have the same access to E15 that they've had for the past five summers."
"While we are grateful this issue will be settled in key states, our urgent priority is to ensure uninterrupted access to E15 nationwide this summer," Jennings said, adding that, "the administration has already hinted that emergency waivers could yet again be approved for the summer of 2024, and we will be pushing for that."
Meanwhile, Patrick Kelly, senior director of fuels & vehicle policy at the American Fuel & Petrochemical Manufacturers, said the group has "made clear to the administration that it's too late for 2024 implementation and even 2025 would be problematic."
"Refiners start making the switch to summer production very early in the year and to minimize costs, there must be a reasonable transition to producing summer gas according to a different specification," Kelly said.
This content was created by Oil Price Information Service, which is operated by Dow Jones & Co. OPIS is run independently from Dow Jones Newswires and The Wall Street Journal.
--Reporting by Patrick Newkumet, pnewkumet@opisnet.com; editing by Jordan Godwin, jgodwin@opisnet.com
(END) Dow Jones Newswires
02-22-24 1518ET
