By Stephanie Kelly and Jarrett Renshaw
NEW YORK (Reuters) -A U.S. government funding bill released on Tuesday included a plan that would allow sales of higher-ethanol blend gasoline year-round, a major win for the corn and ethanol lobbies.
The inclusion would mark a hard-fought victory for the ethanol industry, which wanted year-round E15 sales as a way to boost demand for its products.
Reuters reported earlier on Tuesday that the plan was expected to be included in the bill.
The plan would also provide credits to some refineries that demonstrate compliance with the U.S. Renewable Fuel Standard (RFS), which requires refineries to blend billions of gallons of biofuels into the nation’s fuel mix or purchase credits from those that do. the sources said.
These credits would be awarded to small refineries that petitioned the U.S. Environmental Protection Agency, which administers the RFS, for an exemption from the mandates during the 2016-2018 compliance years but were denied or had an outstanding application as of December 1 . 2022, one of the sources said.
The wording in the provision follows a bill sponsored by U.S. Senator Deb Fischer of Nebraska, the third-largest corn-producing state.
“My bill ends years of regulatory patchwork and uncertainty – year-round nationwide E15 will now be a reality,” Fischer said in a statement after the text of the funding bill was released.
The biofuels industry welcomed the provision.
“We are very pleased to see that the long-awaited solution that makes E15 possible all year round is included in this package,” said Geoff Cooper, president of the Renewable Fuels Association. “We remain hopeful that the continuing resolution will quickly pass through Congress and head to the President’s desk for signature.”
The plan also includes language that the EPA and the Commodity Futures Trading Commission would review all applicable fuel blending credits, known as RINs, and submit a report to Congress to reduce manipulation of the renewable fuels market.
Currently, sales of E15 are effectively blocked from June to September. Adding ethanol to gasoline is known to increase smog pollution in hot weather, but research has shown little difference between E15 and the more widely available E10 blends.
The provision would likely overturn a controversial decision by the U.S. government in February to approve a request by Midwestern governors to allow year-round sales of E15 only in their states, starting in 2025.
Some oil refiners had argued that allowing E15 in certain states, rather than nationwide, could lead to local fuel price spikes and supply problems.
