EPA proposes allowing year-round high-blend ethanol sales — but not as soon as Iowans wanted

Gasoline with higher blends of ethanol could be sold year-round in Iowa and seven other Midwestern states beginning in 2024 under a rule the U.S. Environmental Protection Agency proposed Wednesday.

The proposed rule is a victory for the biofuels industry, which for years has pushed to allow sales of gasoline blended with 15% ethanol during the summer. Summer sales have been curtailed because of concerns that the higher ethanol mix would worsen smog during hot weather.

But the proposal received a mixed reception from ethanol makers and Midwestern elected officials. They welcomed the plan for year-round sales, but criticized the EPA for not letting them begin this summer, as requested by a bipartisan group of governors, including Iowa's Kim Reynolds.

More:Iowa would lose $10.3B a year in ethanol production without pipelines, report says

“While long overdue, I am thrilled that the EPA has approved our multi-state bipartisan ... request that will pave the way for year-round E15 and bring certainty to the industry," Reynolds, who last year signed a law requiring most Iowa gas stations to offer gasoline with higher blends of ethanol by 2026, said in a statement. “However, the arbitrary delay in implementation this summer is unacceptable and disappointing, but hardly surprising. Iowa won’t accept it without a fight."

Biden administration 'caving to refiner crocodile tears' with delay, critics say

Under the proposal, the higher blend could be sold during the summer in Iowa, Illinois, Minnesota, Missouri, Nebraska, Ohio, South Dakota and Wisconsin. Most gasoline sold in the U.S. is now blended with 10% ethanol, which is allowed throughout the year.

The issue is especially important in Iowa because it is both the largest producer of ethanol and corn, the primary ingredient in the biofuel. About half of all the corn grown in Iowa goes to ethanol production, and some 40% of the corn grown in the Midwest.

With even more ethanol going into gas tanks, demand for corn should increase and prices paid to farmers also should rise.

More:Iowa’s ethanol production sets new record, group says

The American Coalition for Ethanol said in a statement that the group appreciated the EPA's proposal but argued there was no reason to wait until 2024. It accused the agency of delaying the action because of pressure from the petroleum industry, which said implementing the proposal in time to allow sales this summer would have been costly.

“The administration appears to be caving to refiner crocodile tears by kicking the can to 2024 instead," the coalition said. "This delay means consumers in conventional gasoline areas of the country will be forced to pay more at the pump this year and retailers who want to offer lower cost E15 to their customers will be penalized.”

The group, joined by elected officials including U.S. Sen. Joni Ernst of Iowa, a Republican and member of the agriculture committee, urged the EPA to allow the change to take effect in 2023 for the eight Midwestern states and for the Biden administration to allow the expanded ethanol sales in other regions of the country.

Monte Shaw, executive director for the Iowa Renewable Fuels Association, also weighed in.

“It is unconscionable for me to think that this summer, Midwestern drivers and fuel retailers will be the ones to pay the price for the illegal delay by the Biden EPA to finalize these rules,” Shaw said in a statement. “The governors’ authority is not in question. The air quality science is not in question. There is no question the EPA failed to meet the statutory deadline. Now they are using their own tardiness to justify putting off the E15 fix until 2024, leaving Midwest consumers to pay 15 cents per gallon or more than necessary.”

Refiners say cost of implementing year-round E15 could be steep

The American Fuel & Petrochemical Manufacturers industry group said the EPA was right to delay new rules until 2024 because summer gasoline production is already underway. Even with more lead time, the organization predicted that creating a special blend for the Midwestern states would increase costs and could lead to tighter fuel supplies in the region because not all refiners, pipelines and terminals are ready to handle the different blend.

“Fuel manufacturers and regional pipeline and terminal operators have made clear to the Biden administration and the eight petitioning states that the push to outlaw the current blend of summertime gasoline and replace it with a boutique blend is going to impose major costs on the Midwest’s fuel supply chain and consumers — ranging from $500-$800 million per year, and potentially higher if unforeseen interruptions occur,” the organization said in a statement.

The EPA said it would hold a hearing on the proposed rule in late March or early April. The agency didn't immediately respond to a request to comment about questions regarding its proposed rule.

The Associated Press contributed to this article.

This article originally appeared on Des Moines Register: Year-round high-blend ethanol sales proposed by EPA, but not until 2024