EPA last week published its evaluation of information that satisfies the emissions and health effects data requirements for registration of E15 gasoline. This official document provides the legal basis for fuel or fuel additive manufacturers to register with the EPA and begin selling E15. EPA has already granted waivers for the use of E15 in vehicles made after 2000.
USDA Chief Economist Joe Glauber at USDA’s Outlook Conference last week said he does not expect E15 to have much impact right away because the cost for retailers to switch from E10 to E15 is substantial. A number of market analysts agree with Glauber that the likelihood of widespread adoption of E15 is questionable. Retailers will have to make significant investments in infrastructure to be able to sell both E10 and E15.
The difference between ethanol prices and wholesale gasoline prices has shifted by about $1.30 per gallon over the past few months, and the gasoline price is currently more than 80 cents per gallon above the ethanol price. This margin may be enough to provide the incentives to entities in the distribution and sales part of the supply chain to take a closer look at E15, according to one industry report.
There are reportedly no new ethanol plants under construction and current plants are running near capacity, according to the Renewable Fuels Association. Production is likely to be about 14.5 billion gallons this year. The United States exported 1.2 billion gallons of ethanol or over 8.5 percent of the 13.948 billion gallons of ethanol produced last year.
