EPA Decision Grants Year-Round E15 Sales In 8 Midwest States

The Environmental Protection Agency (EPA) has granted the petition of 8 state governors (Illinois, Iowa, Minnesota, Missouri, Nebraska, Ohio, South Dakota and Wisconsin) to remove the 1-psi RVP volatility waiver for E10 blends in their states. The EPA delayed implementation until April 28, 2025. The governors of North Dakota and Kansas initially joined the 8 petitioners, but later rescinded their petitions due to concerns of fuel supply issues. The decision to grant the petitioners request was never in doubt since the Clean Air Act (Section 211(h)(5)) requires removal of the 1-psi waiver upon demonstration that it increases evaporative emissions of volatile organic compounds (VOCs) in the petitioning states. By definition the 1-pound RVP waiver increases VOC emissions by one pound per square inch in areas where it is used. Removal of the 1-psi waiver allows the year-round sale of E15 in the 8 petitioning states, including during the summer driving season from June 1 through September 15.

In short, the EPA decision will require a lower-volatility conventional gasoline before oxygenate blending (CBOB) in the 8 petitioning states resulting in a lower-volatility E10 blend. The removal of the 1-psi waiver does not apply to the 42 non-petitioning states. In these states, the sale of E15 is still prohibited between June 1 and September 15 and E10 blends remain subject to the 1-psi RVP waiver.

It is uncertain at this point whether refiners providing fuel to the petitioning states will modify their summer gasoline production operations to accommodate the 9.0 psi low-RVP E10 standard. The ability to adapt to the 9.0 psi standard depends on refiner willingness to invest in infrastructure necessary to produce low-RVP E10 to the 8-state region. Site specific limitations such as space to add extra storage capacity and the variety of crude oil types processed will also determine whether a refinery can switch to low-RVP E10 production. To avoid supply disruptions, pipeline operators will need to adjust delivery operations and provide additional breakout stations to ensure sufficient supply of RVP compliant E10 reaches the petitioning states. Another option available to avoid supply disruptions would be for one or more of the petitioning states to opt into the federal RFG program through amendment of State Implementation Plans. In the most unlikely scenario, refiners could simply switch to E15 blends for distribution downstream to ensure supply. Such a move would raise UST compatibility concerns for retail marketers.