As part of California Governor Gavin Newsom’s efforts to lower the state’s absurdly high gas prices, state officials are taking steps to adopt the use of E15 fuel, which contains a 15% blend of ethanol in gasoline. The majority of gasoline sold in California contains a 10% of ethanol, and they now stand alone in prohibiting its sale. The other 49 states have adopted the use of E15 fuel.
Newsom recently urged the California Air Resources Board (CARB) to expedite their studies and make E15 available as soon as possible. CARB is in the process of conducting a “multimedia evaluation,” something that can take anywhere from 2 to 5 years in California. However, CARB began its evaluation in 2018 and released its final risk assessment report in late 2022, but little progress has been made since. For whatever reason, CARB recently estimated that it could take another year to complete its evaluation.
The Renewable Fuels Association (RFA) has accused CARB of purposefully “slow walking” the approval process and has repeatedly asked for the agency to commit to a timeline for approval of E15. In a letter sent last year, RFA President and CEO Geoff Cooper summarized tailpipe and carbon emission benefits of lower-carbon ethanol. If all gasoline in California in 2022 had been E15 instead of E10, the state would have seen a -450-million-gallon reduction in petroleum consumption and additional GHG savings of 2.2 billion metric tons, based on CARB’s own data. “By failing to act on E15 approval, CARB is incomprehensibly leaving massive air quality and climate benefits on the table,” the letter says.
While Governor Newsom is urging CARB to stop dragging its feet, the agency is simultaneously considering an overhaul of its low-carbon fuel standards that could put up more roadblocks to E15. The standard, implemented in 2011, requires fuel producers to stay below certain carbon intensity thresholds — either by using lower-carbon resources themselves or by acquiring credits from industries that do so. The proposed amendments to the Low Carbon Fuel Standard center on “increasing the stringency of the program to more aggressively decarbonize fuels.”
Among the possible changes include incentivizing more production of clean fuels, such as low-carbon hydrogen, which is extremely limited and can’t even be used in current vehicles. The amendments would also strengthen guardrails on crop-based fuels to avoid deforestation, even though this is a non-issue for U.S.-produced ethanol.
Ultimately, the new standards are expected to raise fuel prices in the state even higher – gasoline in California already runs over a $1 more than the rest of the country. Even the California Chamber of Commerce is warning CARB regulators that the proposed changes will significantly raise fuel prices. It also reminded CARB members that LCFS was originally designed to encourage the production and use of low-carbon transportation fuels via market mechanisms that avoid picking technology winners and losers.
Interestingly, CARB does promote the use of E85. In fact, California is the biggest market for E85 and sales rose +15% to set a new record in 2023. E85 also sells for less than other typical fuel blends. There is high demand for E85 from retailers as well. Fuel retailers in the state have taken steps to sell more E85 to California drivers, including through the use of funds awarded through the ‘Higher Blends Infrastructure Incentive Program’ (HBIIP), a federal infrastructure grant program that helps fuel retailers offer higher biofuel blends, and that continues through most of this year. California had 52 fuel stations apply for HBIIP funding in round one, and 25 apply in round two.
The key issue with E85 is that many agencies recommended it only to be used by Flex Fuel Vehicles (FFV), and car makers have recently been focused on EVs, so there aren’t a ton of models that should “technically” be using the fuel – the Department of Energy maintains a list HERE, if you’re interested. On the flip side, approximately 96% of the vehicles on the road today, roughly 290 million, are legally approved to use E15. In fact, E15 is fully approved for use in cars, SUVs, pickups, vans, or other light-duty vehicles manufactured after the year 2000. By comparison, there are some 22 million flex-fuel vehicles (FFVs) on the road in the United States, roughly just 8% of all vehicles. (Sources: Renewable Fuels Association, Ethanol Producer, AgWired, DOE)
