E15 Marks Five Years on the Market

Source: By Todd Neeley, DTN/Progressive farmer • Posted: Wednesday, July 12, 2017

It was five years ago today E15 was introduced to the marketplace and the ethanol industry continues to struggle to expand the market to its potential.

In the current Congress there has been legislation offered that would grant E15 a needed Reid Vapor Pressure, or RVP, waiver to allow its sale nationwide year-round.

Last week the U.S. Environmental Protection Agency released its proposed renewable volume obligations in the Renewable Fuel Standard, and once again the bar was set low for cellulosic ethanol based on current production.

The blend requirement for cellulosic ethanol is proposed at 238 million gallons, a 73-million gallon decline from last year’s level.

The success of E15 and cellulosic ethanol are inextricably linked, as corn ethanol essentially has maxed out the E10 market – leaving little room for cellulosic ethanol. The budding industry has faced a number of fits and starts in the past decade, including a loss of investor interest when President Barack Obama’s EPA introduced a level of uncertainty in how it implemented the RFS.

According to a news release from the Renewable Fuels Association, Kansas became the first state to offer E15 on July 10, 2012. Since then E15 availability has expanded to nearly 900 stations in 29 states, with more expansion to come.

In June 2012, the EPA gave final approval for the sale and use of E15 in light duty vehicles made since 2001, representing nearly 90% of today’s automotive fleet. Meanwhile, manufacturers of more than 80% of new vehicles sold in 2017 list E15 as an approved fuel.

“Since the debut of E15 five years ago, consumers have enjoyed greater access to a fuel that typically costs less, reduces harmful tailpipe pollution, offers higher octane, and boasts a higher renewable content,” RFA President and Chief Executive Officer Bob Dinneen said in a news release.

“Thanks in part to the U.S. Department of Agriculture’s biofuels infrastructure partnership program and the industry-funded ‘Prime the Pump’ initiative, more and more stations are offering E15. We look forward to the continued growth of E15 throughout our nation and enhancing the ability of American drivers to choose a fuel that is better for their pocketbook, better for the environment, and better for engine performance.”

Since the first gallon of E15 was pumped five years ago, according to RFA, more than 1 billion miles have been driven on E15 without a verified case of misfueling, engine damage or performance issues.

The RFA said E15 expansion “will occur once consumers have year-round access to E15.

“Due to an outdated EPA regulation, retail gas stations are essentially prohibited from selling E15 in more than two-thirds of the nation’s gasoline market during the summer ozone control season, from June 1 to Sept. 15. Whether through legislative or regulatory action, RFA is working to ensure E15 is available year-round, throughout the nation.”

Geoff Cooper, senior vice president of the RFA, said the development of E15 is not at all unlike that of E10 when it was approved by EPA in 1978.

“Actually, E10 didn’t exactly expand overnight either,” he said. “People tend to forget that E10 was still a niche fuel two decades after it was approved.”

E10 was legally approved by EPA in December 1978. In 1981, only 831 million gallons of E10 were consumed, containing 83 million gallons of ethanol. That means E10 accounted for less than 1% of total gasoline consumption (99 billion gallons) in 1981.

Five years after E10’s introduction (1983), E10 consumption had risen to about 4.15 billion gallons (containing 415 million gallons of ethanol).

“Still, that means E10 was only 4.2% of the U.S. gasoline market (99.8 BG) in 1983,” Cooper said.

“E10 was less than 10% of the gasoline market until 1993 and remained under 20% of the market until 2003. So even 25 years after E10’s introduction, it was still just 20% of the gasoline market.”

By 2006, E10’s market share had grown to 40%. By 2009 it was more than 80%. And since 2010, E10 has held 95% or more of the gasoline market.

Five years after the commercial introduction of E15, it makes up between 0.2% and 0.4% of the gasoline market.

“But between 2003 and 2010, we saw just how quickly the market can expand if the right conditions are in place,” Cooper said. “The same thing can happen for E15 if the RVP barrier is removed and a strong RFS is enforced.”