October 14, 2010
BY Erin Krueger
The U.S. EPA has approved a fuel waiver allowing the use of E15 in model year 2007 and newer cars and light-duty trucks. A second ruling determining the use of E15 in model year 2001 through 2006 cars and light-duty trucks is expected to be released in late 2010 or early 2011, after additional testing data is received from the U.S. DOE.
During a press conference to announce the partial waiver approval, EPA Agency Assistant Administrator for Air and Radiation Gina McCarthy also spoke about proposed labeling requirements for E15 sold at retail. "To eliminate the opportunities for mis-fueling, EPA is also proposing a program to properly label fuel pumps that dispense E15," she said. "This would include a requirement that the fuel industry specify the ethanol content of gasoline they sell to retailers. There would also be a quarterly survey of retail stations to help ensure their gas pumps are properly labeled. Based on today’s decision, that label would visibly and clearly state that the pump contains E15, and that the fuel is for use only in model year 2007 and newer cars and light duty trucks."
McCarthy also stressed that the EPA is not requiring the use of E15. "This decision is not a mandate to make E15 available all at once," she said. "EPA does not have that authority. Rather, this decision is about allowing the use of gasoline blended with E15 ethanol by the appropriate vehicles to use where and when E15 becomes available." She also noted that the decision does not change the renewable fuels standard (RFS2) requirements, but is simply another step towards increasing the use of renewable fuels.
According to McCarthy, there will be more than 65 million 2007 and newer model-year cars and light trucks on the road in 2011, representing one-third of gasoline consumption. That number will increase to 100 million vehicles and 50 percent of fuel consumption by 2014. The waiver approval does not apply to motorcycles, heavy-duty vehicles, or nonroad engines.
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The EPA’s decision has led to a wide range of responses from variety of industries; some positive, many negative. While the EPA’s decision may not be ideal, it is one step in the direction of overcoming the ethanol blend wall.
Genencor, a Division of Danisco, has spoken out in support of the EPA’s decision. "We applaud the action taken today by the EPA and hope that they will quickly move to approve E15 for all vehicles," said Glenn Nedwin, Genencor’s executive vice president-technical enzymes. "The adoption of sound, tested policies for cleaner fuel is critical to reducing our dependence on foreign oil, supporting our agricultural sector and cutting greenhouse gas emissions."
Nedwin also noted the decision will help spur development and investment in ethanol infrastructure and second-generation facilities. "The next decision…I think should really open up the flood gates," he said. "Once the decision comes [out for 2001 through 2006 model year vehicles] then it is getting much more attractive for investors because we now see there is growth potential in the industry. With an open market now, we will definitely see more investment coming. I just think this is a great day for fueling the freedom of this country." Nedwin also noted that the decision will lead to greater energy security, economic development and prosperity.
The Renewable Fuels Association has also spoken out about the EPA’s action, questioning the decision to limit the E15 use to newer vehicles. "EPA’s scientifically unjustified bifurcation of the U.S. car market will do little to move the needle and expand ethanol use today," said RFA President and CEO Bob Dinneen. "Limiting E15 use to 2007 and newer vehicles only creates confusion for retailers and consumers alike. America’s ethanol producers are hitting an artificial blend wall today. The goals of Congress to reduce our addiction to oil captured in the renewable fuels standard cannot be met with this decision."
Dinneen has also expressed disappoint of EPA’s failure to approve an intermediate blend, such as E12, for use in all vehicles. "I find it hard to believe that there is not a level between E10 and E15 at which EPA could approve for use in all vehicles," he said. "An interim step to anything above E10 for all vehicles would have a more immediate impact on the market than today’s announcement."
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The National Association of Convenience Stores is urging retailers use exercise extreme caution when considering whether or not to supply E15 to customers due to liability issues. "EPA’s decision to allow the use of E15 in certain vehicles does nothing to remove retailers’ obligations to ensure that all of their equipment is lawfully certified to store and sell this product," said NACS Vice President of Government Relations John Eichberger. "Further, limiting E15 use to only vehicles manufactured since 2007 could expose retailers to significant liability risk if a consumer were to fuel an unapproved engine with E15."
According to the NACS, federal law requires retailers to only use dispensers that are listed by a nationally recognized testing laboratory, such as Underwriters Laboratories. Many retailers only have equipment UL approved for E10, not E15. The use of unlisted equipment could expose retailers to claims of gross negligence, said the NACS. The association has also noted that the EPA’s proposed labeling requirements may not provide necessary protections for retailers to limit potential liability for accidental and intentional misfueling. There are also concerns about E15’s compliance with various air regulations. For example, federal law does not currently extend the one-pound waiver to fuels containing more than 10 percent ethanol, which could mean retailers who choose to sell E15 could face possible liability for violating air quality control regulations.
"EPA has placed retailers in a very precarious position," Eichberger said. "By issuing this decision before all testing has been completed, EPA is bifurcating the engine market, creating a scenario in which misfueling could be rampant and retailers will be forced to pay the bill. Further, by restricting the engines that are authorized to use E15, EPA is implying that E15 may cause performance, emissions or safety issues in other engines, thereby increasing the potential liability to retailers of E15. Finally, by issuing this decision before other laws and regulations could be amended to allow for the lawful sale of E15, EPA has authorized a fuel that could trigger widespread violations and liability for retailers who decide to act on this decision."
A coalition of farm and food industry associations has also spoken out against the waiver approval, but for very different reasons. "The EPA’s decision will have an impact on American farmers, food manufacturers and, most importantly, American consumers, who will face price increases at the grocery store and when they go out to eat in a restaurant. EPA took this step without sufficient regard for the inevitable effect on the price of food and feed," said the coalition in a press release. "After decades of federal subsidies and fuel mandates, the corn-based ethanol industry should stand on its own two feet and stop depending on the United States taxpayer for unneeded and unwarranted support. Enough is enough."
Even UNICA, the Brazilian Sugarcane Industry Association, has weighed in on the issue, calling for the elimination of ethanol import tariffs in the U.S. "Many U.S. ethanol groups have argued recently that after 30 years of tax credits and trade protection they are ready to compete without subsidies provided the government grants them greater access to America's fuel pumps," said Joel Velasco, UNICA’s chief representative in North America. "With the EPA's decision to increase ethanol limits by 50 percent for newer vehicles, that day has arrived… Americans will benefit from having more options-like sugarcane ethanol-available at the pump, and that's why the U.S. Congress should follow-up the EPA decision by allowing the ethanol tax credit and import tariff to expire on Dec. 31."