By 2022, EISA requires the use of 36 billion gallons of renewable fuels, and much of this would likely be ethanol from a variety of feedstocks. However, there is a key obstacle to the use of so much ethanol in gasoline. Before EPA's decision on the Growth Energy waiver petition, the amount of ethanol that could be blended in gasoline for all conventional gasoline vehicles and engines was limited to 10% by volume (E10) by guidance developed by the Environmental Protection Agency (EPA) under the Clean Air Act (CAA), as well as by vehicle and engine warranties, and certification procedures for fuel-dispensing equipment. On March 6, 2009, Growth Energy (on behalf of 52 U.S. ethanol producers) applied to EPA for a waiver from the CAA E10 limit. The application requested an increase in the maximum concentration to 15% (E15). The waiver would allow the use of significantly more ethanol in gasoline than was permitted under the 10% limit. In a November 2009 letter to Growth Energy, EPA noted that "it is clear that ethanol will need to be blended into gasoline at levels greater than the current limit of 10 percent" to meet the EISA mandates. In the letter, EPA noted that long-term testing on newer vehicles had not been completed, but that the agency expected that model year 2001 and newer vehicles "will likely be able to accommodate higher ethanol blends, such as E15." EPA estimates that MY2007 and later vehicles will represent 29% of the cars and light trucks on the road in 2011. As noted by EPA, granting Growth Energy's petition to increase gasoline ethanol content to 15% addresses only one component of the blend wall. Further, for EPA to allow the sale of E15, a fuel supplier still needs to register the fuel with EPA and submit health effects testing for EPA to review—a process that has not yet been started. Second, automakers currently warranty their vehicles to operate on ethanol/gasoline blends up to 10%. Third, most existing infrastructure (e.g., underground gasoline storage tanks, fuel pumps) is designed and certified to deliver blends up to E10. The EPA Administrator, upon application of any manufacturer of any fuel or fuel additive, may waive the prohibitions established under paragraph (1) or (3) of this subsection or the limitation specified in paragraph (2) of this subsection, if he determines that the applicant has established that such fuel or fuel additive or a specified concentration thereof, and the emission products of such fuel or fuel additive or specified concentration thereof, will not cause or contribute to a failure of any emission control device or system (over the useful life of the motor vehicle, motor vehicle engine, nonroad engine or nonroad vehicle in which such device or system is used) to achieve compliance by the vehicle or engine with the emission standards with respect to which it has been certified pursuant to Sections 206 and 213(a) of this title. However, based on communication between EPA's Office of Transportation and Air Quality (OTAQ) and the Minnesota Department of Agriculture, as well as a presentation made by a member of OTAQ staff to the American Petroleum Institute Technology Committee, a submission must
include both evaporative and exhaust emissions; be comprehensive, assessing the emissions effects both short-term and over the full useful life of the vehicle; include tests on a variety of vehicles (e.g., new and used, car, truck, and motorcycle), and the selection of vehicles should reflect their frequency on the road; and assess the durability of vehicles and vehicle parts using the fuel, including assessments of the compatibility of the new fuel (or blend level) with engine materials, and the effects on operability and performance. EPA received that data and expanded the waiver in January 2011. On October 13, 2010, EPA granted a partial waiver for newer (MY2007 and later) passenger cars and light trucks, initially deferring a decision on MY2001-MY2006 passenger vehicles before granting the partial waiver on January 26, 2011, and denied the waiver for older passenger vehicles as well as all other vehicles. In its October 13 decision, EPA determined that there were insufficient data to alleviate concerns over potential emissions increases from older passenger vehicles and non-road engines. EPA took comments through December 17, 2010, on updating its guidance to include ways for owners to demonstrate compatibility with E15. This may be especially difficult for small-engine manufacturers and users who are currently concerned about the effects on their engines from E10, let alone higher blends of ethanol. Because of concerns over potential misfueling, a group of automobile and equipment manufacturers has challenged the partial waiver in court. Many state laws and regulations limit the use of ethanol in gasoline to 10%. These state rules would also need to be updated to allow widespread use of E15. Further, gasoline retailers are concerned that they could lose insurance coverage if they distribute gasoline with higher than 10% ethanol concentration. A key issued raised with EPA's partial waiver decision is the likelihood of misfueling of E15 in vehicles and engines not approved for its use. EPA finalized the misfueling rules in June 2011.
On March 6, 2009, Growth Energy (on behalf of 52 U.S. ethanol producers) applied to the Environmental Protection Agency (EPA) for a waiver from the Clean Air Act (CAA) limitation on ethanol content in gasoline. Ethanol content in gasoline for all uses had been capped at 10% (E10); the application requested an increase in the maximum concentration to 15% (E15). A broad waiver would allow the use of more ethanol in gasoline than is currently permitted.
On October 13, 2010, EPA issued a partial waiver for the use of E15 in model year (MY) 2007 and later passenger cars and light trucks. At the same time EPA denied the waiver request for the use of E15 in MY2000 and older vehicles, and in motorcycles, heavy trucks, and non-road applications, citing a lack of sufficient data to alleviate concerns about potential emissions increases from these engines. EPA deferred a decision on MY2001-MY2006 cars and light trucks until January 2011, when the agency expanded the waiver for those vehicles after analyzing final testing data from the Department of Energy (DOE). Concerned about potential damage by E15 to equipment not designed for its use, a group of vehicle and engine manufacturers has challenged the partial waiver in court.
Of key concern before the waiver decision was made is the fact that a 10% limitation on ethanol content leads to an upper bound of roughly 15 billion gallons of ethanol in all U.S. gasoline. This "blend wall" will likely limit the fuel industry's ability to meet an Energy Independence and Security Act (EISA, P.L. 110-140) requirement to use increasing amounts of renewable fuels (including ethanol) in transportation. To meet the high volumes mandated by EISA, EPA recognized in a November 2009 letter to Growth Energy that "it is clear that ethanol will need to be blended into gasoline at levels greater than the current limit of 10 percent." The partial waiver for MY2001 and later vehicles—roughly two-thirds of the cars and light trucks on the road in 2011—will allow the use of more ethanol going forward, assuming other conditions are met.
To receive a waiver, the petitioner must establish to EPA that the increased ethanol content will not "cause or contribute to a failure of any emission control device or system" to meet emissions standards. In addition to the emissions concerns, other factors affecting consideration of the blend wall include vehicle and engine warranties and the effects on infrastructure. Currently, no automaker warrants its vehicles to use gasoline with higher than 10% ethanol. Small engine manufacturers similarly limit the allowable level of ethanol. In addition, most gasoline distribution systems (e.g., retail pumps and tanks) are designed to dispense up to E10. While some of these systems may be able to operate effectively on E15 or higher, their warranties/certifications would likely need to be modified. Further, many current state laws prohibit the use of blends higher than E10. Questions have been raised whether fuel suppliers would be willing to sell E15 alongside or in lieu of E10.
As EPA's waiver only applies to newer vehicles, a key question is how fuel pumps might be labeled to keep owners from using E15 in older vehicles and other equipment. Along with the waiver decision, EPA proposed new rules, including pump labeling, to prevent misfueling of E15 in vehicles not approved for its use. EPA finalized those rules in June 2011. EPA also sought comment (through December 17, 2010) on how to update guidance for underground storage tank (UST) owners, who must demonstrate compatibility of UST components with E15 before they may sell the fuel. Further, for EPA to allow the sale of E15, a fuel supplier would still need to register E15 with EPA and submit health effects testing for EPA to review—a process that had not been started as of late June 2011.