U.S. Government Funding Bill May Include Year-Round E15 Sales

By Stephanie Kelly and Jarrett Renshaw

NEW YORK (Reuters) – An upcoming U.S. government funding bill is anticipated to include a plan for year-round sales of gasoline with a higher ethanol blend, a significant victory for the corn and ethanol lobbies, according to sources familiar with the matter.

This inclusion would represent a hard-fought gain for the ethanol industry, which has been advocating for year-round E15 sales to enhance demand for its products.

The proposal would also offer credits to certain refiners that demonstrate compliance with the U.S. Renewable Fuel Standard (RFS). This standard requires refiners to blend billions of gallons of biofuels into the national fuel mix or purchase credits from compliant entities.

These credits would be allocated to small refiners who had petitioned the U.S. Environmental Protection Agency (EPA) for exemptions from the mandates during compliance years 2016-2018, but whose petitions were either denied or remained outstanding as of December 1, 2022.

The provision's language aligns with a bill sponsored by U.S. Senator Deb Fischer from Nebraska, the third-largest corn-producing state.

Currently, E15 sales are effectively prohibited from June to September due to concerns about increased smog pollution from adding ethanol in hot weather. However, research indicates that there is little difference in environmental impact between E15 and the more commonly available E10 blends.

This provision could potentially override a controversial February decision by the U.S. government, which approved a request from Midwestern governors to permit year-round E15 sales only in their states starting in 2025.

Some oil refiners have argued that allowing E15 sales in select states, rather than nationwide, might lead to localized fuel price increases and supply complications.