E15 Policy Change Coming?

Trump administration preparing to announce plan to allow year-round sales: Bloomberg

WASHINGTON -- The Trump administration is set to announce within the coming weeks a new policy that would lift summertime sales restrictions on E15, the 15% ethanol gasoline blend.

President Trump will announce the policy change, potentially in Iowa, “in the coming weeks,” sources told Bloomberg. The new policy could help shore up support among farmers to vote for Republicans ahead of the midterm elections as they grapple with the aftereffects of the president’s tariff war with China.

A recent study by Iowa State University's Center for Agricultural and Rural Development found that trade losses to Iowa from trade disruptions related to the tariffs will average $333 million. The ethanol industry will lose $105 million because of the tariffs. 

“This is good,” Craig Irwin, an analyst for Roth Capital, told Bloomberg of the potential policy change on E15. “It shows that Trump is for ethanol. Ethanol is a part of agriculture and agriculture is a huge supporter of Trump.”

Shares of biofuel producers such as Pacific Ethanol Inc. and Green Plains Inc. jumped on the news.

President Trump has repeatedly expressed his support for allowing year-round sales of E15, although there have been no formal moves made from a regulatory or legislative standpoint to enable it. And any proposed policy would have to undergo months of public comment and face potential legal action from opponents of wider ethanol use. 

Transparency Steps

Meanwhile, the U.S. Environmental Protection Agency (EPA) recently updated its web site for the Renewable Fuel Standard (RFS) to provide more information on the small refinery exemptions it has received, approved and denied. The agency has been criticized for granting too many of these exemptions, which waive the refiner’s blending obligations under the RFS. A recent analysis by the Food & Agricultural Policy Research Institute of the University of Missouri found that blending exemptions granted by former EPA Administrator Scott Pruitt to several refiners could lead to nearly $20 billion in lost sales of ethanol.

The RFS website also now features price and volume information on Renewable Identification Numbers (RINs), the credits that obligated parties such as refiners use to demonstrate their compliance to blending targets. 

“Increasing transparency will improve implementation of the RFS and provide stakeholders and the regulated community the certainty and clarity they need to make important business and compliance decisions,” Wheeler said in a statement.

Bob Dinneen, president and CEO of the Renewable Fuels Association, Washington, D.C., described the transparency efforts as “a step in the right direction” for preventing small refiners from accessing information before other participants of the RIN market.

“That’s important because it appears the RIN market was gamed earlier this year by a small group of refiners who were privy to sensitive information regarding compliance exemptions before the rest of the market knew what was going on,” Dinneen said in a statement. “Hopefully, this will put a stop to that. However, more information and transparency are still needed. Market participants and the public deserve to know exactly who is receiving small-refinery exemptions and what criteria is being used by EPA in making the decision to grant or deny a waiver request.”

Photograph: Shutterstock

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