EPA Proposes Rule to Allow E15 Waiver and to Improve RIN Market Transparency

EPA Proposes Rule to Allow E15 Waiver and to Improve RIN Market Transparency
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Today, the U.S. Environmental Protection Agency (EPA) proposed regulatory changes to allow gasoline blended with up to 15 percent ethanol (E15) to take advantage of the 1-psi Reid Vapor Pressure (RVP) waiver for the summer months that has historically been applied only to E10. EPA is also proposing regulatory changes to modify elements of the renewable identification number (RIN) compliance system under the Renewable Fuel Standard (RFS) program to enhance transparency in the market and deter price manipulation.

“Consistent with President Trump’s direction, EPA is working to propose and finalize these changes by the summer driving season,” said Administrator Andrew Wheeler. “We will be holding a public hearing at the end of this month to gather important feedback.”

 

Under the proposed expansion, E15 would be allowed to be sold year-round without additional RVP control, rather than just eight months of the year.

 

Proposed reforms to RIN markets include:

 

  • Prohibiting certain parties from being able to purchase separated RINs;
  • Requiring public disclosure when RIN holdings exceed specified thresholds;
  • Limiting the length of time a non-obligated party can hold RINs; and
  • Increasing the compliance frequency of the program from once annually to quarterly.

 

EPA welcomes public comment on the proposal and intends to hold a public hearing on March 29. Additional details on the comment period and public hearing will be available shortly.

 

Background

On October 11, President Trump directed the EPA to initiate a rulemaking to expand waivers for E15 and increase the transparency in the RIN market.

 

For more information on the proposed rulemaking, please visit: https://www.epa.gov/renewable-fuel-standard-program/notice-proposed-rulemaking-modifications-fuel-regulations-provide  

 

Kansas Corn leaders made the following statement on EPA’s release today of the proposed rule to allow year-round sales of E15.
 
 
“It’s good news for growers to see EPA moving forward on this proposed rule for year-round E15,” said Kansas Corn Growers Association President Steve Rome. “We’ve been working with National Corn Growers and our ethanol friends to move this rule forward to remove the outdated limitations on E15 fuel before the summer driving season begins. The RVP rule has been an unnecessary barrier to offering more fuel choices for consumers.”
 
 
The proposed rule allowing year-round sales of E15 will benefit the Kansas Corn Commission’s efforts to expand the availability the fuel which is already approved for passenger vehicles model year 2001 and newer—nearly all the vehicles on the road today.
 
 
“Our corn growers, through their checkoff, are working to expand access to E15 at fuel retailers across the state, and we’ve already had a lot of success,” Kansas Corn Commission Chairman Dennis McNinch said. “We’ve worked with many fuel retailers to add E15 and this will allow those retailers to offer the fuel all year. It will also open opportunities for additional expansion to help us grow market access for ethanol, and to provide a lower priced, higher octane fuel choice for drivers.”
 
 
KCGA works closely with National Corn Growers Association (NCGA) on this issue. NCGA President Lynn Chrisp said the organization appreciates EPA’s efforts to move the rule forward.
 
 
“Today’s proposed rule is great progress to getting the rulemaking completed by the start of the summer driving season, June 1. NCGA appreciates EPA’s efforts to meet this deadline and we look forward to fully reviewing the content of the proposed rule. We will be providing comments to EPA and urging our membership to provide input during the comment process as well.
 
 
“Allowing year-round sales of higher blends of ethanol not only grows a domestic market for farmers, but E15 gives consumers more choice at the pump, a lower price option and greater environmental benefits from a cleaner fuel. This fix removes an outdated barrier to all of these benefits.” 
 
 
Kansas E15 retailers can be found at kscorn.com/eth
 
 
 
 

Renewable Fuels Association (RFA) President and CEO Geoff Cooper offered the following statement on EPA's Notice of Proposed Rulemaking to allow year-round sales of E15 in conventional gasoline markets and modify Renewable Identification Number (RIN) provisions under the RFS:

 

“Today’s proposed rule means EPA is one step closer to making good on President Trump’s promise to allow year-round sales of E15. With just 80 days left before the start of the summer driving season, finalizing and implementing the E15 regulatory fix remains a tall order. That is why we have urged EPA to separate the year-round E15 provisions from the RIN reform provisions, and move forward as quickly as possible to finalize a practical and defensible year-round E15 solution. With ethanol plants shutting down or idling and farmers experiencing the worst conditions in more than a decade, removing the summertime ban on E15 once and for all would send a desperately needed signal to the marketplace.

 

"We are carefully reviewing the details of the proposed rule and look forward to providing EPA with extensive technical and legal comments to support an expeditious and legally sound resolution of this decades-old red tape barrier. RFA and its member companies will also testify in support of year-round E15 at the upcoming public hearing."

 

Growth Energy, the nation’s leading advocate for ethanol, welcomed the proposal as a critical step toward providing consumers with uninterrupted access to a cleaner, lower-cost option at the fuel pump, but also cautioned against any changes to the Renewable Identification Number (RIN) market that could undercut investment in delivering higher ethanol blends.

 

“This rule is a critical milestone for rural Americans who make renewable biofuels and for all American drivers, who may soon have a cleaner, more affordable, higher-octane fuel all year long,” said Growth Energy CEO Emily Skor. “We are still reviewing details of the proposal, and we look forward to working with the EPA to ensure that any changes – particularly in the RIN market – do not upend the marketplace, and continue to encourage investment in E15 and other higher ethanol blends. We appreciate the administration’s efforts to fulfill the president’s promise and will continue in our commitment to making the environmental and economic benefits of E15 available to consumers nationwide.”  

 

The EPA announcement follows a decade of efforts by Growth Energy to expand consumer access to E15, most recently through the E15 Now campaign, which promoted the administration’s commitment to year-round sales of E15. The proposed rule would provide relief to over 1,700 retail stations across 30 states that now sell E15, often for only eight months out of the year, and remove a key regulatory barrier for other retailers seeking to offer a lower-cost, higher-octane option to customers.

 

The proposed rule would lift a nearly thirty-year-old limitation on E15, which restricts sales between June 1 and September 15, and today’s announcement from EPA marks the first step in the rulemaking process. The EPA has committed to completing the rulemaking process by June 1, 2019, the start of the summer driving season. Before finalizing the rule, the agency will now accept comments from biofuel producers, farmers, and numerous other stakeholders.

 

Farmers Union Stands Ready to See Waiver Through, Work to Expand Use of E30

 

National Farmers Union (NFU) President Roger Johnson issued the following statement in response to the release of the proposed rule:

 

“The move to expanded use of higher level blends of ethanol is absolutely vital at this moment in time. More E15 use means we can begin to dig into our massive oversupply of corn, lifting prices ever so slightly for all commodities. Farmers Union applauds EPA for releasing this proposed rule, and we look forward to helping the agency get this in effect by summertime.

 

“Moving forward, we need to build on this achievement by expanding use of E30 gasoline. The result would be a necessary boon for farm families stuck with low prices in a struggling farm economy and rural communities that are in need of economic rejuvenation. It would also lead to cheaper gasoline prices, better performing engines, and significant climate gains for consumers. NFU urges federal policymakers to remove barriers to higher level blends of ethanol and work to encourage the continued growth of the American biofuels industry.”

 

Thune Applauds the EPA’s Decision to Permit Year-Round E15 Fuel Sales

 

U.S. Sen. John Thune (R-S.D.), a longtime member of the Senate Agriculture Committee, today applauded Environmental Protection Agency’s (EPA) proposal to permit the year-round sale of E15 fuel (15 percent ethanol-blended fuel) in the United States, a win for consumer choice and energy security that Thune has sought for nearly 11 years, including significant and ongoing engagement with the current administration. This proposed rulemaking is the first step in the regulatory process to allow the year-round sale of E15 and follows through on President Trump’s commitment on this issue.

 

“I’m glad the EPA is moving forward with the E15 rule and is on pace to secure a win for American farmers and consumers,” said Thune. “I’ve pushed for the year-round sale of E15 for over a decade, and I thank President Trump for his commitment to seeing this through. Extending E15 sales through the summer driving season will expand consumer choice for a lower-cost and cleaner fuel, reinforce our energy independence, and provide a shot in the arm for our farmers. I look forward to further reviewing the rule to make sure its provisions will have the intended effect to expand ethanol sales.”

 

Thune first called for a waiver process to permit higher blends of ethanol in 2007. Most recently, on January 24, 2019, Thune met with then-Acting Administrator Andrew Wheeler to stress the importance of completing the rule by the June 1st start of the summer travel season, when E15 sales become restricted, and how easing this regulatory burden will assist South Dakota agriculture.

 

In April 2018, Thune joined 17 of his Senate colleagues in writing to then Administrator Scott Pruitt to highlight the benefits of E15, and they encouraged him to address the Reid Vapor Pressure issue that was preventing year-round E15 sales. He also wrote Acting Administrator Andrew Wheeler in August 2018 to reiterate his support for biofuels. In October, Thune joined President Trump in the Oval Office for the administration’s announcement that it would initiate a rulemaking process for year-round E15 sales.

 

Additionally, Thune has actively sought transparency with, and ultimately a resolution to, the EPA’s unprecedented use of small refiner exemptions from the Renewable Fuel Standard (RFS), which have kept billions of gallons of ethanol from being blended and have distorted markets. Year-round E15 sales will lower RFS compliance costs for all parties and inject stability and certainty into the ethanol market.