Oil trade group pushes US for national ethanol policy after EPA okays Midwest expansion

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By Stephanie Kelly and Jarrett Renshaw

NEW YORK (Reuters) – The American Petroleum Institute trade group on Monday pressed for a nationwide policy on higher-ethanol blends of gasoline after the President Donald Trump’s administration said on Friday it would move ahead with expanded sales of the product in certain Midwestern states.

The U.S. Environmental Protection Agency said on Feb. 21 it would uphold an April 28 implementation date for a request from eight Midwest governors to allow year-round sales of gasoline containing 15% ethanol, a blend known as E15.

EPA’s action is meant to enable both E15 and the more widely available E10 fuel blends to be sold during the summer, where the existing policy often keeps E15 out of the market. The change was sought by Midwestern governors and first charted under former President Joe Biden.

While biofuel producers have long wanted expanded sales of the E15 blend, they would prefer a nationwide solution that goes beyond just the Midwest region. The API also prefers a nationwide policy, as some industry players worry a fragmented market could lead to localized supply disruptions.

API told Reuters the EPA’s decision to go ahead with the Midwest expansion reflects the need for Congressional action for a nationwide solution.

This “would prevent a patchwork of state-by-state policies while ensuring consumers have access to the fuels they depend on every day,” said Will Hupman, API’s vice president of downstream policy.

A bipartisan group of U.S. senators this month reintroduced a bill that would allow nationwide sales of E15.

Meanwhile, other oil groups such as the American Fuel and Petrochemical Manufacturers and the Fueling American Jobs Coalition spoke out against the EPA’s decision.

AFPM “calls on the affected Governors to protect consumers in their states from likely increased gasoline costs and supply disruptions by requesting more time for the market to prepare,” said Geoff Moody, senior vice president of government relations and policy at AFPM.

The EPA’s action will apply to Illinois, Iowa, Minnesota, Missouri, Nebraska, Ohio, South Dakota, and Wisconsin, though EPA administrator Lee Zeldin said the agency will consider granting one-year delays for states that seek additional compliance time, something already sought by Ohio.

The agency’s decision is an early indicator of the new Trump administration’s approach to biofuel policy.

During Trump’s first term, some debates pitting oil refiners against biofuel producers reached the president, prompting the EPA to weigh policy shifts on the treatment of refiners and federal quotas mandating use of the alternative fuels.

(Reporting by Stephanie Kelly and Jarrett Renshaw; Editing by David Gregorio)