Trump EPA Keeps Biden-Era Gasoline Change Meant to Boost Ethanol

The Trump administration has decided to maintain a fuel policy change initiated under the Biden administration, aimed at increasing sales of corn-based ethanol. Despite concerns from the oil industry regarding potential fuel cost increases and supply disruptions, the Environmental Protection Agency (EPA) is proceeding with the plan. This decision has significant implications for the ethanol industry, consumer behavior, and the overall energy market.

The policy adjustment, set to take effect on April 28, eliminates the special treatment for conventional E10 gasoline, which exempted it from volatility limits in up to eight Midwestern states. This change effectively puts E10 on the same regulatory footing as higher-ethanol E15 gasoline, allowing both varieties to use the same raw gasoline blendstock and simplifying compliance for fuel producers.



The oil industry has warned that this policy change could lead to market disruptions and increased fuel costs. However, EPA Administrator Lee Zeldin has stated that the agency is considering emergency fuel waivers to prevent supply disruptions and protect consumers from price volatility. Additionally, lawmakers are exploring legislation that would permit year-round sales of E15, which could further boost ethanol demand and production.

The maintenance of the April 28 implementation date for ending special treatment of conventional E10 gasoline is expected to have both short-term and long-term impacts on the ethanol industry's growth and profitability. In the short term, increased demand for E15 and the simplification of compliance for fuel producers should benefit ethanol producers. However, potential supply disruptions and price volatility could negatively impact their profitability. In the long term, the increased demand for E15 and the simplification of compliance should lead to an increase in ethanol production, driving growth and profitability for ethanol producers.

The regulatory changes are also likely to influence the compliance costs and strategic decisions of fuel producers. By placing E10 under the same regulations as E15, the EPA aims to simplify compliance and reduce costs for producers. This change will encourage investment in higher ethanol blends and promote innovation in the biofuel industry. The expected outcomes for the industry include increased ethanol demand, support for domestic agriculture, and enhanced sustainability.

In conclusion, the Trump administration's decision to maintain the Biden-era gasoline change meant to boost ethanol is expected to have a positive long-term impact on the ethanol industry's growth and profitability. While there may be short-term challenges related to supply disruptions and price volatility, the regulatory changes will simplify compliance for fuel producers, increase ethanol demand, and promote innovation in the biofuel industry. The ethanol industry, consumer behavior, and the overall energy market will likely benefit from these changes in the long term.