As has often been the case, the U.S. Environmental Protection Agency (EPA) issued waivers for E15 production. For the most part, these waivers have been the obvious exception to Renewable Fuel Standard (RFS) regulations; obvious in that everyone involved knew the RFS standards were impossible almost as soon as they were issued due to the lack of ethanol production. Despite years of trying to incentivize producers to grow more corn for ethanol-based fuels, farms just aren’t keeping up with RFS-pushed demand. However, there has been a recent push to change renewable fuels standards in a way that could start to turn the tide.
Usually, demand for higher-ethanol-content (over 10% ethanol) fuels decreases during the summer due to fuel volatility standards, known as Reid vapor pressure (RVP). However, in 2023, the EPA proposed a Set Rule establishing an annual Renewable Volume Obligation that incentivizes expanded E15 availability at retailers. Given the general posture of the Biden administration towards renewable fuels, this is not surprising.
This means more ethanol is set to be purchased by refiners all through the summer. This is in addition to the usual industry-wide ethanol production increase that occurs in the fall — during the seasonal RVP changeover — making it likely that the EPA is attempting to transition refiners to a higher, year-round increase in ethanol-blended gasoline production.
Since ethanol expands, what was ordered as 8,000 gallons could actually end up being 8,003 gallons.
In most cases, the refined fuels blender has an obligation to inject 10% ethanol into their product; this has been the case for years. With the new proposed ethanol standards, there is an opportunity for refined fuels suppliers to discover increased profit.
When you inject ethanol into a gasoline stream, it expands to create a larger volume. For suppliers and terminal operators, it’s important to know exactly what is being loaded from the rack. Since ethanol expands, what was ordered as 8,000 gallons could actually end up being 8,003 gallons.
The potential for increased profits
With the right software and accurate dispensing system, you can potentially increase your billable volume without increasing the actual inventory dispensed. Consider having that extra volume exchange repeated throughout the day, every day, at multiple racks.
DTN Guardian3 includes an option to monitor ethanol products so the fuel mixture is precisely tracked.
In addition, ethanol injections can be individually tweaked for specific blends, meeting the 10% or 15% ethanol criteria while reducing the financial risk of dispensing too much product.
DTN Guardian3® includes an option to monitor ethanol products, which helps precisely track the fuel mixture. With this state-of-the-art monitoring, terminal operators can file reports evidencing compliance without risking lost product, thereby protecting margins.
Request a demo with a DTN expert who can help ensure your terminal is operating at optimal efficiency and profitability.