RFA Report: Farmers, Ethanol Producers Would Lose Billions if Summertime E15 Ban Returns

By Ken Colombini

The recent D.C. Circuit Court decision overturning EPA’s approval of year-round E15 sales could have a strongly negative impact on the rural economy and environment in the coming years unless action is taken to allow unimpeded sales of E15 all year long, the Renewable Fuels Association reported in a new analysis released today.

According to the white paper, if the court decision is allowed to stand and no other action is taken to facilitate continued year-round sales of E15  in conventional gasoline areas, the ruling could have considerable long-term impacts on the ethanol market. E15 sales volumes in 2022-2024 would remain essentially flat with 2021 levels, rather than growing rapidly as expected prior to the court decision.

“Some major fuel retailers and marketers who have expressed interest in offering E15 have indicated to RFA that they are much less likely to invest in E15 if they aren’t able to sell the fuel year-round,” wrote RFA Chief Economist Scott Richman. “In addition, if the court ruling stands, E15 sales volumes per station would likely return to pre-2019 levels, as retailers would again be forced to forgo E15 sales during the busy summer driving season and consumers may be confused about fuel offerings.”

As a result of the court decision, RFA particularly noted:

• Cumulative E15 sales between 2021 and 2024 would be nearly 12.6 billion gallons lower than would have been the case if E15 can be sold year-round.
• This leads to a net loss of ethanol sales of 630 million gallons valued at $1.3 billion between 2021 and 2024.
• In addition, the ethanol industry would reduce purchases of corn by approximately 221 million bushels between 2021 and 2024, leading to more than $1 billion in lost sales revenues for farmers.
• A return to the summertime prohibition on E15 sales also would cause greenhouse gas emissions from gasoline consumption to increase by 2.3 million metric tons of carbon dioxide equivalent between 2021 and 2024. That is an amount equal to the annual GHG emissions from nearly 500,000 cars.
• Potential economic losses over the longer term (2025-2030) would be substantially larger, as it was generally expected that E15 expansion would continue to accelerate and E15 could fully, or mostly, replace E10 as “standard gasoline” by the end of the decade.

“RFA fought tooth-and-nail for nearly a decade to secure the approval for year-round E15 sales in conventional gasoline markets,” RFA President and CEO Geoff Cooper said. “When EPA finally changed its regulations in 2019 to allow uninterrupted sales of E15, the marketplace immediately reacted and retailers across the country started taking steps to offer this lower-cost, lower-carbon fuel to consumers.