The White House is set to greenlight a request from a coalition of Midwest governors to permit year-round sales of gasoline with higher ethanol blends, particularly E15. However, this approval is accompanied by a delay in implementation until 2025, indicating a strategic move with political considerations.
This decision comes as a mixed bag for the biofuel industry, eager to expand ethanol sales but potentially frustrated by the postponed start date. The one-year delay is seen as a tactic to sidestep any potential localized price spikes and supply disruptions that the oil sector has warned could occur until after the upcoming U.S. election.
The plan, originating from governors representing Illinois, Iowa, Minnesota, Missouri, Nebraska, Ohio, South Dakota, and Wisconsin, will allow for the year-round sale of E15 gasoline starting next year. In the interim, the Environmental Protection Agency (EPA) may issue a temporary waiver to facilitate such sales if necessary.
States like Wisconsin and Minnesota, crucial battlegrounds in the upcoming presidential election, stand to be impacted by this decision, as issues like inflation and the economy are focal points for President Joe Biden’s re-election campaign.
Currently, E15 gasoline sales are restricted during summer months due to environmental concerns related to smog. The EPA is expected to announce its decision by late March, with the final rule slated for release. The initial effective date proposed for April 2024 has been deferred to 2025.
The ethanol industry has long advocated for lifting restrictions on E15 sales nationwide, arguing against overstated environmental impacts.
However, this request has faced opposition, notably from oil refiners such as HF Sinclair Corp and Phillips 66, cautioning against a fragmented approach that could complicate fuel logistics and raise supply risks. Ethanol groups favor a comprehensive legislative solution for expanded E15 sales rather than a regional patchwork.
