UpdateLimited US E-15 decision confuses market – ethanol group

20 December 2010 22:10  [Source: ICIS news]

Partial E-15 waiver may have confused market(adds paragraphs 1-6)

HOUSTON (ICIS)--Lawsuits filed against the US 15% ethanol fuel blend (E-15) underscore the need for consistency in E-15 legislation, a trade group for the US ethanol industry said on Monday.

EPA [Environmental Protection Agency] could have avoided this kind of market confusion by following all the science to its logical conclusion and allowing the use of E15 for all cars and light duty pickup trucks,” the Renewable Fuels Association (RFA) said.

“The only way to meet the nation's energy, economic and environmental goals as put forth in the Renewable Fuels Standard is to increase ethanol consumption,” the group added.

The E-15 partial waiver granted in October gave immediate approval for use by automobiles manufactured in 2007 and later, but a decision on cars made in 2001 through 2006 is still pending.

The RFA statement came in response to a lawsuit filed on Monday by a coalition of US engine manufacturers, who argued that further testing needed to be done.

However, the RFA did not address the specifics of that case.

The newly-formed Engine Products Group (EPG), which comprises several different trade groups for automobile, marine and power equipment manufacturers, requested judicial review over whether the EPA waiver for E-15 fuels violated the US Clean Air Act.

“[We] regret having to pursue litigation on this matter, but it is clear that EPA has not fulfilled its statutory obligations to ensure the safe introduction of E-15,” said Thom Dammrich, president of the National Marine Manufacturers Association (NMMA).

Ethanol industry advocates had warned that an E-15 blend approval was critical to the survival of the US biofuels industry.

The elevated fuel mandate is widely opposed, however, by US refiners and a broad coalition of other manufacturers and environmental groups, who argue that many automotive and off-road vehicle and equipment engines can not safely use the higher ethanol blend and that an E-15 mandate would not benefit the environment.

The previous ethanol blend limit was 10% (E-10).

The EPG said that E-15 could adversely affect engines in non-road products and later model year vehicles, cause emission failures and increase air pollution as a result of misfueling.

In addition, the group said the testing upon which EPA made its decision was “put in the administrative record too late to permit meaningful comment or scrutiny from concerned groups and stakeholders”.

“Our concern is that EPA prematurely granted the partial waiver before critical studies on the effects of E-15 use were completed. We want to be sure that any new fuel will not increase air pollution, harm engines or endanger consumer safety,” said Michael Stanton, chief executive with the Association of International Automobile Manufacturers (AIAM).

In early November, US energy sector officials - including the American Petroleum Institute (API) - joined with food, livestock and agriculture interests in filing a federal lawsuit seeking to overturn the authorisation for E-15 blends.

The groups said the agency’s ruling lacked statutory authority and scientific justification.

US refiners have warned that an E-15 authorisation could force shutdowns of some domestic gasoline refineries.

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By: Ben DuBose
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