The biofuel market experienced a sea change on July 2, 2021, when the D.C. Circuit of Court Appeals ruled the Environmental Protection Agency (EPA) did not have statutory authority to permit year-round sales of E15 in the U.S, NATSO reports. The federal one-pound RVP (Reid vapor pressure) waiver, which still allows year-round sales of E10, no longer includes E15—but the conversation isn’t over yet.
Chris Bliley, Senior Vice President of Regulatory Affairs at Growth Energy, breaks down the implications of this change for convenience-store retailers and their shoppers and offers insight into Growth Energy’s efforts to ensure uninterrupted access to the fuel in the future.
Q: What does it mean that the RVP waiver was struck down, and how might this affect retailers?
A: The RVP limit only applies in conventional gasoline market areas during the summer driving season—June 1 through Sept. 15. The conventional gasoline market includes most of the country, probably 60 to 70% of the continental U.S. That includes Iowa, Minnesota and North Carolina, for example. So even with the regulatory change, retailers can sell E15 from Sept. 16 to June 1.
The areas that are not impacted by this, where you can sell E15 year-round, are called reformulated gas markets (RFG). In these RFG markets, E15 has been sold for close to ten years and in many of the major cities, including in the northeast corridor, Chicago and Dallas. In addition to RFG markets, E15 can also be sold year-round in areas that are low vapor pressure for all ethanol blends – New York, Maine and eastern Texas, for example.
Even for conventional markets, this ruling didn’t go into effect during the summer 2021 driving season, and our goal is to get a solution in place by June 1 of next year to not impact current sales.
Q: Is it still profitable for retailers to sell E15 or add it to their offerings?
A: Yes! A lot of retailers were already selling E15 before year-round access was granted in 2019, so current retailers are in good shape. Before the approval of the one-pound RVP waiver, retailers were offering E15 because the fuel helps them gain a competitive price advantage, improve margins and drive overall traffic into their stores.
There’s long-term value in offering this type of product, and it has a strong track record. Where E15 is offered, it generally sells for a lower cost. It’s better for air quality, it drives sales and consumer retention is good. A growing number of retailers are making the switch to replace 87/E10 with E15. We’ve surpassed 25 billion miles driven by Americans and, overall, everyone seems happy with their E15.
Q: Is there hope the law can be changed? What is Growth Energy doing in response, and how can Growth Energy help retailers navigate the current landscape?
A: Growth Energy’s top priority is ensuring uninterrupted access to lower-cost E15, which means we need a permanent fix in place before the 2022 summer driving season.
We are pursuing all options, and one avenue is legislative. Congress can put an end to the oil industry’s efforts to limit consumer access to higher blends of renewable fuels by permanently extending the 1.0 psi summertime RVP waiver to ethanol blends beyond E10. To that end, Growth Energy supports the Year-Round Fuel Choice Act (H.R. 4419) in the U.S. House of Representatives and the Consumer and Fuel Retailer Choice Act (S.2339) in the U.S. Senate.
Another avenue is legal. We’ve filed a petition for the Supreme Court to re-hear the decision, and we’re also doing everything we can to make sure retailers have the confidence to keep carrying E15. We’re working to garner bipartisan support in DC, and we’re exploring a regulatory avenue as well. We’re looking at what the EPA can do and discussing what actions can happen at the state level, too.
Bottom line, retailers need to understand that E15 has been and continues to be a success, and we’re going to do everything we can to ensure there’s a long-term solution for RVP.
To learn more about selling E15 and how Growth Energy is supporting retailers amid regulatory shifts, visit Growth Energy’s website. Interested parties can also write their legislator and ask they support a permanent RVP fix here
This post is sponsored by Growth Energy