EPA Sets Renewable Fuel Requirement of 10.21% for 2009
November 19, 2008
The U.S. Environmental Protection Agency (EPA) announced on November 17 that the 2009 renewable fuel standard (RFS) will require most refiners, importers, and non-oxygenate blenders of gasoline to displace 10.21% of their gasoline with renewable fuels such as ethanol. That requirement aims to ensure that at least 11.1 billion gallons of renewable fuels will be sold in 2009, in keeping with the targets established by the Energy Independence and Security Act of 2007, which President Bush signed into law in December 2007. While the RFS requirement is increasing by about 23%—from 9 billion gallons in 2008 to 11.1 billion gallons in 2009—the percentage requirement is increasing by nearly one third, from 7.76% in 2008 to 10.21% in 2009.
The larger relative increase in the percentage requirement reflects the fact that fuel consumption is expected to be lower in 2009, so a greater percentage of renewable fuel is needed to reach 11.1 billion gallons of renewable fuels. Based on data from DOE's Energy Information Administration, the EPA anticipates that 138.47 billion gallons of gasoline blends will be sold in 2009 in the 48 contiguous states plus Hawaii (Alaska doesn't participate in the program). That's down from the 144.5 billion gallons of blended gasoline that the EPA expected to be sold in those 49 states this year. See the EPA press release and the pre-publication version of the accompanying Federal Register notice (PDF 68 KB). Download Adobe Reader.
Today, most ethanol is sold either as E10 or E85, but DOE and others are examining mid-range blends.
The 2009 RFS is also pushing up against what is known as the "blend wall." Most gasoline sold in the United States contains at most 10% ethanol (a blend known as E10), but the new RFS requires a slightly greater percentage of gasoline to be displaced with renewable fuel. That extra percentage, 0.21%, equals about 300 million gallons of renewable fuel. One way to sell greater amounts of ethanol is to sell E85, a blend of 85% ethanol and 15% gasoline, but despite rapid growth in the number of E85 pumps, there are still only about 1,800 E85 pumps in the United States. Minnesota has about one-fifth of the stations, at 357, and the most recent report on sales from the Minnesota Department of Commerce suggests that at most 24 million gallons of E85 will be sold in the state this year, containing about 20.4 million gallons of ethanol. Extrapolating that result to the entire nation yields only 100 million gallons of ethanol. To address the blend wall issue, DOE and others are studying the use of mid-range blends, such as E15 and E20, for use in standard gasoline-burning vehicles. Allowing all gasoline blends to contain up to 20% ethanol would double the potential market for ethanol. See the National Ethanol Vehicle Coalition's press release on the number of E85 stations, the Minnesota E85 Station Report (PDF 41 KB), and a summary from the American Coalition for Ethanol on efforts to institute mid-range ethanol blends.