Give retailers a cash incentive to sell E15, ethanol group asks Congress
Biofuels could play an important role in helping the nation reduce greenhouse gas emissions and mitigate the impact of global warming, said an ethanol trade group on Tuesday, with an eye on upcoming infrastructure legislation. Growth Energy suggested the government pay retailers to lower the price of E15 to entice motorists to buy the higher-blend renewable fuel.
Although E15, a richer blend of ethanol into gasoline than the traditional 10%, has been available year-round since May 2019, it is sold at only 2,500 of the 150,000 fueling stations in the country. Ethanol distillers say the fuel, usually made from corn, is a cleaner-burning alternative to gasoline.
“In fact, studies show there is no path to net-zero emissions by 2050 without biofuels,” said Growth Energy chief executive Emily Skor at a Senate Agriculture subcommittee hearing on renewable energy. Subcommittee chairwoman Sen. Tina Smith [DFL-MN] said, “Biodiesel and ethanol are low-carbon fuels and they get greener every year” due to gains in productivity.
E15 sales could climb by 2 billion gallons annually if Congress created a $100 million grant program that paid a 5¢-per-gallon incentive to retailers who lowered the pump price by 5¢, said Skor. Research by the National Association of Convenience Stores in 2015 “found that consumers will drive 5 miles out of their way to save 5¢ a gallon,” she said.
Skor also proposed a $100 million grant program to share the cost with retailers to upgrade their equipment to handle E15, a successor to previous programs to install blender pumps and storage tanks. Last year, the USDA had a $5 million cap per company. There should be no cap, said Skor, because it would be a barrier to large operators.
Also on Tuesday, the National Biodiesel Board began a round of meetings with lawmakers on its priorities, including a three-year extension, through 2025, of the $1-a-gallon biodiesel tax credit and passage of legislation providing $500 million over five years for a renewable fuel infrastructure grant program.
The biodiesel and ethanol trade groups urged the EPA to “optimize” the Renewable Fuel Standard, which guarantees biofuels a share of the fuel market for cars and light trucks. In their views, optimization would mean fewer RFS exemptions for small-volume gasoline refineries, higher targets for use of biodiesel and renewable diesel, and announcement of each year’s RFS targets on time.
“Any new legislation aimed at reducing carbon should build on the RFS, rather than replace it,” said the NBB.
Farm-state lawmakers have been troubled by recent reports the Biden administration might grant RFS relief to some refiners due to the pandemic.
To watch a video of the hearing or read written testimony, click here.