CAFE Standards Rewrite Opens Doors

Ethanol Industry Sees Opportunity for Expansion of High-Octane Fuels

Todd Neeley
By  Todd Neeley , DTN Staff Reporter
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Mid-level ethanol blends such as E30 could play a role as part of a rewrite of fuel economy standards announced by the U.S. Environmental Protection Agency. (DTN file photo by Chris Clayton)

OMAHA (DTN) -- With the future of the Renewable Fuel Standard in question, the U.S. Environmental Protection Agency may be opening another avenue to expand the role of ethanol in the nation's fuel supply.

The EPA on Monday announced it will begin a rewrite of fuel economy and greenhouse gas emission standards for light-duty vehicles, saying a review it completed on standards for vehicle model years 2022-2025 showed the standards "may be too stringent" to meet.

Biofuel interest groups applauded the decision, and said that when EPA rewrites the standards, the agency should consider the role of high-octane fuels, including mid-level ethanol blends, as a viable technology to achieve fuel economy and greenhouse gas (GHG) goals.

It's a battle cry biofuels interests have been sounding for years.

For farmers, bringing high-octane fuels from E25 to E40 could create more markets for corn and a wide variety of feedstocks, including those used for producing cellulosic ethanol. That would be welcome news to rural America where lower commodity prices have led to higher uncertainty in 2018.

As part of a 2012 Corporate Average Fuel Economy (CAFE) rulemaking establishing the model year 2017-2025 light-duty vehicle GHG standards, EPA made a commitment to conduct a midterm evaluation of the standards for model years 2022-2025 no later than April 1, 2018. This evaluation would determine whether the standards remain appropriate or should be made more, or less stringent, according to an EPA news release.

The Obama administration issued a final determination on Jan. 12, 2017, before President Donald Trump took office, according to the EPA release. That evaluation was based on a number of assumptions, including continued higher oil prices and advancements in electric vehicle technology.

During an official announcement at EPA headquarters on Tuesday, EPA Administrator Scott Pruitt criticized President Barack Obama's approach to setting the CAFE standards.

"The Obama administration's determination was wrong," he said. "Obama's EPA cut the mid-term evaluation process short with politically charged expediency, made assumptions about the standards that didn't comport with reality, and set the standards too high."

BIOFUEL GROUPS HOPEFUL

The Urban Air Initiative has been working for years to convince EPA of the merits of high-octane fuels.

"We commend EPA for giving this important issue of fuel economy and carbon reductions the thorough and complete evaluation it requires," said Dave VanderGriend, president of UAI. "This final determination opens the door for EPA to potentially remove the regulatory barriers limiting midlevel ethanol blends. We welcome a more comprehensive review to show high-octane fuels such as ethanol can increase efficiency in not just cars of the future but in the cars on the road today. But we will also continue to point out how the EPA's own rules are the primary obstacle to the development of high-octane technologies."

In its final determination on CAFE standards this week, EPA said it continues to receive interest in making ethanol a part of future standards.

"Ethanol producers and agricultural organizations commented in support of high-octane blends from clean sources as a way to enable GHG-reducing technologies such as higher compression ratio engines," the agency said, including the availability of E30 at the pump.

In addition, the EPA indicated in its announcement, which is set for publication in the Federal Register, that automakers support the move to high-octane fuels.

"The Alliance and Global Automakers commented that higher-octane gasoline enables opportunities for use of more energy-efficient technologies (e.g., higher compression ratio engines, improved turbocharging, optimized engine combustion)," the agency said, "and that manufacturers would support a transition to higher-octane gasoline, but do not advocate any sole pathway for producing increased octane."

Bob Dinneen, president and CEO of the Renewable Fuels Association, said it was time for EPA to consider not just vehicles, but the fuel they use as part of the standards.

"For too long, our light-duty vehicle fuel economy and GHG emission regulations have focused exclusively on the vehicle," he said. "We have repeatedly encouraged EPA, NHTSA (National Highway Traffic Safety Administration) and the California Air Resources Board to also consider the important impact of fuels on fuel economy and emissions. As we pointed out in previous submissions to the agencies, higher-octane fuel would unleash and enable a wide pallet of low-cost engine technologies that offer proven fuel efficiency and GHG emission improvements at a low cost for consumers."

Growth Energy CEO Emily Skor said her group for years has pressed EPA to include mid-level ethanol blends in the mix of technologies.

"We have provided a wealth of data to show that mid-level ethanol blends can be used by automakers to produce smaller, more efficient engines that will help meet future vehicle standards," she said. "We will continue to remain engaged with automakers and government stakeholders to ensure that biofuels are part of any long-term plan for engine efficiency and greenhouse gas reduction."

The American Coalition for Ethanol suggested a number of steps the EPA should follow in writing the next standards.

That includes approving an alternative certification fuel with E25 to E30 and a minimum 98 to 100 octane of a research octane number to allow automakers to begin testing future engines.

In addition, ACE recommends the agency establish a minimum octane performance standard for fuel in the range of 98 to 100, restore credits to automakers for manufacturing flexible-fuel vehicles, and consider a new incentive for automakers to develop future engines designed to achieve optimal efficiency on high-octane fuels.

"The previous administration refused to acknowledge the inescapable link between tailpipe emissions and fuel, overlooking the role fuels with a higher octane rating than today's gasoline could play in reducing GHG emissions and improving fuel economy," ACE said in a statement.

"Some might argue today's decision means EPA will eventually relax GHG standards, allowing more gasoline use and tailpipe pollution, but not if the new standards pave the way for E25 to E30 high-octane fuel in future engines."

Todd Neeley can be reached at todd.neeley@dtn.com

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(BAS/AG)

Todd Neeley