Doubts abound over US midcon E15 shift: NATSO

An effort by eight US midcontinent states to start selling 15pc ethanol (E15) gasoline blends year-round starting in 2025 remains unlikely, according to US fuel retailer trade association NATSO.

The US approved last month the request from Illinois, Iowa, Minnesota, Missouri, Nebraska, Ohio, South Dakota and Wisconsin for year-round E15 gasoline sales starting next year.

But even with that approval there are many barriers to making those sales a reality, said David Fialkov vice president of government affairs for NATSO, which represents truck stops and travel center operators. This includes a lack of investment from pipelines and refiners to prepare for the changes, as well as the higher costs of separating and selling different gasoline specifications at the retail level.

"I remain pessimistic that it will come to fruition," Fialkov said Tuesday at a conference held by fuel retail industry group SIGMA in Austin, Texas.

Political pressure to delay or abate the change in the midcontinent states will probably continue until refiners, pipeline companies and retailers begin to make the investments necessary, said Fialkov.

E15 has been available for sale across the US since 2019, but a federal court in 2021 found that the Clean Air Act offers a fuel volatility waiver to refiners to produce only 10pc ethanol gasoline. The Environmental Protection Agency (EPA) has worked around this ruling for the last two summers by issuing temporary emergency orders allowing the sale of E15 because of the war in Ukraine's squeeze on crude prices.

A group of midcontinent refiners has petitioned the EPA to delay implementation of the E15 rule until the summer of 2026. The EPA has not yet ruled on the request.

Fialkov said a legislative solution to the issue at the federal level would provide a clear and uniform pathway to E15, as opposed to the the EPA's rule which leaves some states still relying on the waiver and others opting to go with year-round E15.

By Zach Appel