House approves year-round E15

WASHINGTON — The U.S. House passed legislation allowing for year-round, nationwide sale of E15 fuel May 13 and the bill advances to the Senate.

The Nationwide Consumer and Fuel Retailer Choice Act was approved 218-203, with 122 Republicans, 95 Democrats and one independent voting in favor and 90 Republicans and 113 Democrats opposing the legislation.

Sales of E15, a blend of 15% ethanol and 85% gasoline, have been typically restricted in about half of the country during the summer because of smog concerns, although the temporary emergency waivers have been approved by the U.S. Environmental Protection Agency for five straight years, including for 2026.

The bill allows, but does not mandate, retailers to offer E15, while preserving E10 availability for consumers.

The legislation also provides targeted reforms to the Small Refinery Exemption process under the Renewable Fuel Standard.

Small refineries would receive an automatic 75% exemption from their RFS obligations beginning Jan. 1, 2028, stripping the EPA of its existing authority to grant hardship-based SREs after 2028.

Seventy-five percent of those exempted volumes would be reallocated to other refiners, according to the bill.

Twice Delayed

A year-round E15 provision was initially proposed in the House version of the appropriations package in January. However, the provision was omitted and the bill instead included the creation of the E15 Rural Domestic Energy Council.

On April 30, the House passed a new farm bill that did not include a proposed provision allowing year-round E15 sales. House leadership agreed to hold a separate vote, which culminated in the May 13 passage.

Budget Concerns

Opponents of the E15 bill highlighted Congressional Budget Office estimates that this bill would increase direct spending by $2.7 billion while raising revenues by $400 million, resulting in a net deficit increase of about $2.27 billion between 2026 and 2036.

There was also pushback from lawmakers representing oil-producing states.

Impact Studies

A pair of studies analyzing nationwide E15 adoption find varying outcomes for agriculture.

The National Corn Growers Association and Renewable Fuels Association released an economic impact study late last year that found using an E15 ethanol blend year-round would “provide a boon to the American economy, benefiting farmers, communities and consumers alike.”

NCGA and RFA analysis found year-round E15’s passage would mean an additional $25.8 billion to U.S. gross domestic product in direct, indirect and induced economic activity, more than 128,000 full-time equivalent jobs and $10.3 billion in income for workers and owners through the full implementation of E15.

Of the additional $25.8 billion in economic impact, $7.3 billion comes from ethanol production, while another $13.8 billion comes from the corn needed to produce the ethanol and the remaining amounts are derived from exports and construction.

This includes all the direct, indirect and induced impacts of the resulting demand for inputs, capacity and supporting industries.

The full implementation of E15 would be expected to boost corn use in ethanol by 2.38 billion bushels, according to the report.

The study “assumptions” offset the additional corn use for ethanol with lower exports and “other use,” while increasing production from the 15.5 billion bushel baseline to 16.9 billion, keeping ending stocks unchanged at about 2 billion bushels.

University of Missouri’s Food and Agricultural Policy Research Institute just released a study on E15 expansions and SRE reallocation provisions in the bill.

Some key results in the FAPRI study include:

• E15 causes greater corn use and lower soybean oil use, initiating reallocation of land between crops. Government costs associated with corn fall, and costs associated with soybeans rise.

• Proposed SRE reallocation reductions of 75% reduce the RFS requirements across all mandates. These effects fall more heavily on biomass-based diesel than on ethanol.

• Government outlays associated with agricultural policies tend to rise if SRE treatment reduces the RFS volumes while voluntary E15 expansion tends to reduce government outlays.

• Farm income impacts are mixed. E15 expansion raises corn demand, but reduces soybean oil demand, causing trade-offs in crop and livestock sectors. SRE rules that reduce the RFS volumes reduce crop demand, but also affect livestock producer feed costs.