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Kansas will not join states ensuring E15 access
Kansas will not join states ensuring E15 access
New York, 1 April (Argus) — Kansas will not move to join a group of farm states transitioning next year to a boutique summer gasoline blend, which would have ensured continued access to a higher-ethanol blend in the state. Seven Midwestern states have approval to eventually move a lower-volatility summertime fuel that would allow retailers to keep selling both typical 10pc ethanol gasoline (E10) and blends with up to 15pc ethanol (E15). Kansas governor Laura Kelly (D-Kansas), frustrated by an impasse about federal biofuel policy, said earlier this year that she would give "strong consideration" to submitting a request by 1 April to join those states starting in 2027. But much has since changed in fuel markets. The US-Israel war with Iran has sent pump prices sharply higher, and President Donald Trump's administration has tried to contain the fallout by issuing emergency waivers that streamline summertime fuel rules across the country. Those waivers allow year-round sales of E15 in areas where it would have otherwise been limited while also effectively delaying the Midwestern states' fuel change — first planned for 2025 and then for 2026 — to next year. "With the granting of the temporary E15 waiver, E15 will continue to be sold through 2026", Kelly's office said. "While the governor strongly considered the permanent opt-out, she recognizes that it would not take effect until 2027 and felt that it is a decision best left to the next administration." A new governor will take office next year in Kansas. The Clean Air Act exempts E10 from summertime smog rules that would otherwise prevent its sale but does not extend the same treatment to E15 despite similar air quality impacts. The Midwestern bloc as a workaround had won approval to opt out of the special treatment for E10, effectively putting E10 and E15 on equal footing by requiring less-volatile but costlier blendstocks for both. The farm-state governors saw the workaround as a way to ensure continued E15 access no matter how federal policy changes. But the transition also threatened higher pump prices during peak summer driving season, a political risk even before the war. Kansas deciding not to join the other opt-out states comes despite a lack of progress in Congress on permanently exempting E15 from summertime smog rules, leaving decisions around access each summer to regulators. A task force of US lawmakers has struggled for months to reach agreement on biofuel legislation that would allow E15 sales year-round, in part because some oil refiners have objected to earlier proposals that would restrict their ability to win exemptions from biofuel blend mandates. E15 is typically cheaper than E10, although the blend is not sold at the vast majority of US fuel stations. Advocates blame the lack of availability on regulatory uncertainty deterring retailers from investing in higher ethanol blends. By Cole Martin Send comments and request more information at feedback@argusmedia.com Copyright © 2026. Argus Media group . All rights reserved.
Indian ethanol producers call for government support
Indian ethanol producers call for government support
Mumbai, 1 April (Argus) — Ethanol producers in India are urging the government to support the sector as lower demand and tight margins persist, particularly as global crude oil uncertainty creates an opportunity to prioritise sustainable fuels. The ethanol industry is calling for the diversification of ethanol usage, increases in blending mandates, and higher prices. The war in the Mideast Gulf has been a "wake up call," director of Shree Renuka Sugars, Atul Chaturvedi told Argus on 26 March. The government should use domestically produced ethanol wherever possible to ensure steady demand, he said. Chaturvedi particularly stressed considering ethanol for industrial use, including using ethanol burners for domestic and industrial cooking applications. Unlike for gasoline blending requirements, India does allow ethanol imports for non-blending purposes. India's ethanol production capacity has exceeded its fuel-blending requirements, creating a structural surplus which could be directed toward industrial applications, he added. But prices for domestic ethanol are regulated by the government, rendering it less competitive, while imported ethanol is consistently cheaper than its domestic counterpart. This regulation reduces the allure of domestic ethanol to be purchased for industrial use. The average price of domestic ethanol stands at $1,102/t according to the oil ministry's latest data, significantly higher than Argus ' last cfr Mumbai ethanol assessment of $770/t on 31 March. Most ethanol India imports for industrial use is from the US, which is typically the world's lowest-cost producer. Domestic fuel ethanol industry also faces pricing challenges Adding to a structural surplus, Indian ethanol producers are grappling with squeezed margins as costs have been rising, while ethanol sales prices remain capped. Sugar prices rose sharply in March after shipping disruptions at the strait of Hormuz pushed crude prices higher. Elevated crude prices typically push sugar mills to boost ethanol production and limit sugar output. But this price lift did not extend to sugarcane based ethanol in India, where prices are fixed through government tenders. Producers sell ethanol to oil marketing companies (OMCs) for gasoline blending at fixed prices even when production costs increase, creating a significant opportunity cost compared with selling sugar. The sugar industry has been asking the government to price ethanol from different feedstocks at parity for a long time, Chaturvedi said. The sugarcane-based ethanol prices should align with the fair and remunerative price at which maize ethanol is produced, he said. Grain-based distilleries benefit from lower raw material costs, making maize-based ethanol comparatively more advantageous under current conditions. The government price of C-heavy molasses-based ethanol, which is derived from sugarcane, is 57.97 rupee/litre ($895/t). Maize-based ethanol is priced at Rs71.86/litre ($1,110/t). Corn accounts for 31pc of ethanol feedstock, with sugar contributing 49pc and the rest coming from surplus rice and damaged foodgrain. Prices of ethanol from maize command a premium over sugarcane-derived grades, further destabilising the sector and reducing purchases from sugar mills that use molasses. India's accumulating unused ethanol stocks pose an economic challenge as the country's production capacity grows, Indian Federation of Green Energy (IFGE) Sugar Bioenergy Forum co-chairman Dilip Patil told to Argus . Without government involvement, ethanol plants become financially unviable. Infrastructural challenges and the lack of flex-fuel vehicle promotion are hindering the expansion of higher blending mandates such as E30, despite ongoing government discussions. Flex-fuel vehicles can run on a variety of ethanol-gasoline blends, typically ranging from E20 to E100. India's ethanol lobby has been urging the government to promote fuel flex vehicles even before the current conflict. Using ethanol for diesel blending could be another solution to manage the surplus, Chaturvedi added. This mirrors a recommendation from the All-India Distillers Association (AIDA) to the government last month for diesel blend to cut down fuel imports. International and domestic trials have already shown that low volumes of ethanol can be blended into diesel without major engine modifications, AIDA said. By Nikhil Sharma Send comments and request more information at feedback@argusmedia.com Copyright © 2026. Argus Media group . All rights reserved.
Indonesia targets 50pc biodiesel blend in 2026
Indonesia targets 50pc biodiesel blend in 2026
Singapore, 30 March (Argus) — Indonesia will increase its biodiesel-fossil gasoil blend to 50pc (B50) this year, president Prabowo Subianto said during a state visit to Japan today. The development follows months of backtracking on the country's plans for its biodiesel mandate. The president in January gave a directive that Indonesia would maintain a B40 target for 2026 because of high costs of funding the mandate due to wide palm oil-gasoil (Pogo) spreads above $350/t. At the same time, the government raised palm product export levies by 2.5pc from March to fund biodiesel production. Ministry of energy and mineral resources director general Eniya Listiani Dewi said in late 2025 that B50 could be implemented by the second half of 2026 , subject to B50 road test results and other logistical bottlenecks. The government has likely revived interest in increasing to a B50 blending target because of the war in the Middle East, which has significantly narrowed the Pogo spread and disrupted oil supplies to Indonesia. The front-month Pogo spread between Bursa Malaysia crude palm oil (CPO) futures and Ice gasoil futures hit a 41-month low of a $292/t discount at 16:30 Singapore time (08:30 GMT) today. The B50 announcement also drove third-month CPO futures to a 15-month high of 4,778 ringgit/t ($1,186/t) at the same timestamp. Indonesia is also eager to further reduce its gasoil import dependence in the current volatile market. Indonesian plantation fund management agency BPDP funds the price gap between biodiesel and fossil gasoil using revenue from export levies on palm oil and related products. It delivers the funds to biodiesel producers under the public service obligation sector after they supply biodiesel to fuel distribution companies at the cost of regular gasoil. Fuel distributors then supply blended biodiesel and gasoil to consumers. By Malcolm Goh Send comments and request more information at feedback@argusmedia.com Copyright © 2026. Argus Media group . All rights reserved.
US mandates record-high biofuel use: Update 2
US mandates record-high biofuel use: Update 2
Updates with details from final regulatory text New York, 27 March (Argus) — The US will require record-high biofuel use over the next two years, boosting soybean farmers and alternative diesel producers at the expense of oil refiners that warned of higher pump prices. Oil refiners will have to bring billions more gallons of biodiesel and renewable diesel to market in 2026 and 2027, according to new blend requirements released by President Donald Trump's administration Friday. The mandates for biomass-based diesel this year alone are more than 60pc above targets in the category last year, the biggest annual step change in program history. The requirements come as Trump and Republicans in Congress see more support for biofuels as one way to help farmers hurt by trade wars and rising input costs. They also come at the same time as war in the Middle East has pushed up the cost of oil products, raising interest in alternatives like biofuels. Requiring "the highest volumes of renewable fuels in history" will create rural jobs and "massively increase our nation's energy supply", Trump said at a White House event. The Environmental Protection Agency (EPA) requires oil refiners and importers to annually blend different types of biofuels or buy Renewable Identification Number (RIN) credits from those that do. Traders expecting high quotas had already boosted the price of RINs — and key renewable diesel inputs like soybean oil — to multiyear highs this week. Friday's final rule includes a record-high mandate of 26.81bn RINs from total renewable fuel blending in 2026 and 27.02bn RINs in 2027, though fewer RINs per gallon next year for some fuels mean those future requirements are even more ambitious than they first appear. EPA sets total blend requirements and requires that a portion come from lower-carbon "advanced" biofuel types including biomass-based diesel. A gallon of corn ethanol generates one RIN, while more energy-dense fuels like renewable diesel earn more. Other updates show the Trump administration siding clearly with farmers over refiners. Larger oil companies, for instance, will have to blend more biofuels to offset the demand hit from recently generous program exemptions for some small refining rivals. Spread over the next two years, the added mandate of more than 2bn RINs equals around 70pc of biofuel volumes expected to be exempted from 2023-2025 blend quotas, higher than other options EPA considered. The administration did punt an earlier plan to penalize imports, which would have been one of the most substantial and legally contested reforms in program history. While the final rule includes few more details, EPA expects to implement some version of that provision — which could mean foreign biofuels and feedstocks receive half the RINs as domestic product — starting in 2028. Farm groups have pushed regulators to do more to restrict inputs that compete with US crops, including recycled cooking oil that major renewable diesel plants bring in from countries like China. Refiners had lobbied the administration this month to shift course, warning that higher mandates would spill into retail fuel prices already rising because of war in the Middle East. With affordability concerns top of mind for voters ahead of this year's midterm elections, the possibility of higher food and fuel prices presents political risk for Republicans. "It's baffling, with fuel prices already rising due to the conflict in Iran, that EPA is finalizing a rule that will make things far worse for consumers", said Chet Thompson, president of the American Fuel & Petrochemical Manufacturers, a group usually on board with Trump's energy policy. The mandates are certain to draw legal challenges, potentially from refiners or environmental groups. But as courts debate the details, the quotas are likely to support continued growth in not just US biofuel production but feedstock processing as well. Crop trading giants like Bunge and Cargill have invested heavily in new soybean and canola crush facilities, hoping to supply more vegetable oils to biofuel plants. Biomass-based diesel wins more than other fuels While the mandates will also support production margins for other biofuels, domestic demand for corn ethanol — the most widely used biofuel in the US — depends more on Congress. Lawmakers have struggled for months to reach a compromise on legislation that would permanently exempt a higher-ethanol gasoline blend from smog rules that currently limit summertime sales. Trump said Friday he was trusting legislative leaders to soon reach a deal. Gasoline stations can continue supplying fuel with up to 15pc ethanol this summer, more than the typical 10pc blend, because of temporary emergency regulations that the Trump administration started issuing this week. But so-called "E15" is still not sold at most US retail outlets. Renewable diesel production capacity in the US, already at record highs and growing, has boomed in part because the biofuel has fewer blend limits. By Cole Martin Final renewable volume obligations bn RINs 2025 2026 2027 Cellulosic biofuel 1.21 1.36 1.43 Biomass-based diesel 5.36* 9.07 9.20 Advanced biofuel 7.33 11.10 11.32 Total renewable fuel 22.33 26.81 27.02 *2025 biomass-based diesel mandate set in gallons, converted here to RINs Send comments and request more information at feedback@argusmedia.com Copyright © 2026. Argus Media group . All rights reserved.
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