Doubts abound over US midcon E15 shift: NATSO

Spanish Market: Biofuels, Oil products
07/05/24

An effort by eight US midcontinent states to start selling 15pc ethanol (E15) gasoline blends year-round starting in 2025 remains unlikely, according to US fuel retailer trade association NATSO.

The US approved last month the request from Illinois, Iowa, Minnesota, Missouri, Nebraska, Ohio, South Dakota and Wisconsin for year-round E15 gasoline sales starting next year.

But even with that approval there are many barriers to making those sales a reality, said David Fialkov vice president of government affairs for NATSO, which represents truck stops and travel center operators. This includes a lack of investment from pipelines and refiners to prepare for the changes, as well as the higher costs of separating and selling different gasoline specifications at the retail level.

"I remain pessimistic that it will come to fruition," Fialkov said Tuesday at a conference held by fuel retail industry group SIGMA in Austin, Texas.

Political pressure to delay or abate the change in the midcontinent states will probably continue until refiners, pipeline companies and retailers begin to make the investments necessary, said Fialkov.

E15 has been available for sale across the US since 2019, but a federal court in 2021 found that the Clean Air Act offers a fuel volatility waiver to refiners to produce only 10pc ethanol gasoline. The Environmental Protection Agency (EPA) has worked around this ruling for the last two summers by issuing temporary emergency orders allowing the sale of E15 because of the war in Ukraine's squeeze on crude prices.

A group of midcontinent refiners has petitioned the EPA to delay implementation of the E15 rule until the summer of 2026. The EPA has not yet ruled on the request.

Fialkov said a legislative solution to the issue at the federal level would provide a clear and uniform pathway to E15, as opposed to the the EPA's rule which leaves some states still relying on the waiver and others opting to go with year-round E15.

By Zach Appel

Related news posts

Argus illuminates the markets by putting a lens on the areas that matter most to you. The market news and commentary we publish reveals vital insights that enable you to make stronger, well-informed decisions. Explore a selection of news stories related to this one.

07/02/25

Trump planning rollout of 'reciprocal' tariffs

Washington, 7 February (Argus) — President Donald Trump is considering announcing "mostly reciprocal tariffs" on an undisclosed number of countries early next week, in a possible shift from a campaign plan to impose universal tariffs of 10-20pc against all imports to the US. Trump did not provide specifics on the idea, but said he would probably have a meeting on 10 or 11 February before making an announcement. The potential rollout of the reciprocal tariffs appears likely to take place after China's planned 10 February date to start collecting a 10pc tariff on crude, coal and LNG from the US that Beijing imposed in response to a 10pc blanket tariff that Trump has placed on Chinese imports. "I think that's the only fair way to do it," Trump said of his plan to "probably" pursue reciprocal tariffs. "That way, nobody's hurt. They charge us, we charge them. It's the same thing. And I seem to be going in that line, as opposed to a flat fee tariff." Trump has said he views tariffs — which he says is his "favorite word" — as a virtually cost-free way to raise revenue that will cut the US trade deficit and boost domestic manufacturing, without raising prices for goods in the US. But earlier this week, Trump delayed his plan to place an across-the-board 25pc tariff on Canada and Mexico just hours before it was set to take effect, as stock markets began to plunge on the threat of the start of a damaging trade war between the US and its two largest trading partners. The vast majority of economists say across-the-board tariffs are an inefficient way of raising revenue, with costs that would fall the hardest on low-income and middle-income US consumers already reeling from years of inflation. US Senate minority leader Chuck Schumer (D-New York) on 2 February said kicking off a tariff war with Canada and Mexico "makes 100pc no sense" and would raise costs for US consumers. Trump discussed his reciprocal tariff idea today during a press conference with Japan's prime minister Shigeru Ishiba. Trump said he wants to "get rid of" the US' trade deficit with Japan he estimates is $100bn/yr, primarily by selling the country US oil, LNG and ethanol. Trump said he also spoke with Ishiba about efforts related to the "pipeline in Alaska", an apparent reference to the proposed 20mn t/yr Alaska LNG project, which is expected to cost more than $40bn and would require building a natural gas pipeline across Alaska. Ishiba said it was "wonderful" that Trump had lifted a temporary pause on LNG licensing on his first day in office, and said Japan was interested in purchasing US LNG, ethanol, ammonia and other resources as a way to cut down on the US trade deficit with Japan. "If we are able to buy those at a stable and reasonable price, I think it would be a wonderful situation," Ishiba said through a translator. Japan is keen to increase its overall investment in the US to $1 trillion, Ishiba said. By Chris Knight Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Crude Summit: P66 eyes US northeast renewables: Update

07/02/25

Crude Summit: P66 eyes US northeast renewables: Update

Adds info on SAF, other details. Houston, 7 February (Argus) — US refiner Philips 66 is weighing producing renewable fuels in the northeastern US if more states adopt low carbon fuel standards. The company is considering producing renewables at its 258,500 b/d Bayway refinery in Linden, New Jersey, if state mandates are approved and implemented, vice president of renewables Suresh Vaidyanathan said on the sidelines of the Argus Global Crude Summit Americas in Houston, Texas, on Friday. The renewables could be processed along with traditional fuels at the refinery. Bayway is the largest refinery on the US Atlantic coast. Phillips 66 could possibly produce renewable diesel or sustainable aviation fuel (SAF) at the refinery, depending on the specifics of the state laws, Vaidyanathan said. The company said it is "constantly evaluating all of our assets for lower carbon opportunities." New Jersey senators last year proposed legislation to establish what could be the first US east coast clean fuels mandate. In New York, bills to establish a clean fuel standard now count the majority of the state assembly and senate as co-sponsors. But similar proposals have stalled in prior years, in part because some progressive lawmakers worry about potentially boosting biofuels at the expense of electrification. New York state agencies are separately studying the potential impacts of a "clean transportation standard" but have given no indication of when they could release their findings. Phillips 66's Rodeo renewables plant in California reported throughputs of 42,000 b/d in the fourth quarter of 2024 after beginning full operations last year. Phillips 66 said today it is producing SAF at the Rodeo refinery. United Airlines announced in December that it agreed to buy SAF from Phillips 66's Rodeo facility as soon as the product came online. Phillips 66's renewable fuels business logged a $28mn profit in the fourth quarter of 2024 driven by higher margins at the Rodeo complex and stronger international results. By Eunice Bridges Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Crude Summit: Asset-backed oil trades on the rise

06/02/25

Crude Summit: Asset-backed oil trades on the rise

Houston, 6 February (Argus) — Asset-backed trading is becoming commonplace in the oil industry as companies up and down the supply chain bring capabilities in-house, delegates heard at the Argus Global Crude Summit Americas in Houston, Texas, today. "Traditionally, long term hedging was popular, and it still is, but in general we've seen a move towards the front end of the curve," said CME Group's managing director and global head of energy and environmental products Peter Keavey. "The risks are really in the prompt," said Keavy. "We're seeing a lot of hedging in the short term [and] that also is reflective of asset-based optimization." HC Group managing partner Paul Chapman has also noticed a continued shift in trading by banks, which either exited or scaled down operations in 2014 and 2015, to those directly in the industry. "I would argue that pretty much every single business around the world — producer, miner, refiner, retailer of fuels and major — is on some spectrum of developing some asset trading," said Chapman. "And it's driven by a need to capture more margin." Changing trade flows have naturally had a bearing on who becomes more involved in individual markets. "Over the past five years, European players have more and more exposure to US molecules, whether it be crude oil or natural gas," said Keavey, which has driven the growth of trade of WTI, RBOB, gasoline, and heating oil in international markets. Changing energy policy, and policies to reach other political objectives, have a tendency to shape energy flows, whether they are intended or not, the speakers said. The Russian-Ukraine conflict is a prime example, and there are clear signs that US president Donald Trump's second term in office will do the same. "As this world gets more shaped by trade wars and there's more and more government intervention, that itself starts to break down some of the fundamentals of how some of these markets work," said Chapman. Keavey expects Canadian crude to continue to flow even under a Canada-US trade war, but "the question is, what disruption happens to the pricing?" By Brett Holmes Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Mexico factory activity weakens in Jan

06/02/25

Mexico factory activity weakens in Jan

Mexico City, 6 February (Argus) — Mexico's manufacturing sector contracted further in January, according to the latest purchasing managers index (PMI) survey from the finance executive association IMEF. Both manufacturing and non-manufacturing PMIs decreased for a second month in January, falling deeper into contraction territory. "Mexico's economy began 2025 with no growth at all," said IMEF, "with the outlook made highly uncertain moving forward by US President Donald Trump's first actions in office." While Trump's proposed tariffs remain on hold, IMEF warned they could severely impact Mexico's economy by further stalling growth and triggering inflation. The manufacturing PMI dropped to 45.6 from 47.5 in December, marking its tenth consecutive month below the 50-point expansion threshold. Manufacturing, which accounts for about a fifth of Mexico's economy, is led by the auto sector, contributing about 18pc of manufacturing GDP. Within the manufacturing PMI, the new orders index dropped 3.5 points to 42.9 and deeper into contraction. Similarly, production fell 3.0 points to 42.8. Employment held at 47.4 in January, now in contraction for 12 consecutive months. The non-manufacturing PMI — covering services and commerce — declined again, slipping to 49.1 in January from 49.6 in December. New orders dropped 1.9 points to 47.9, production fell 1.4 points to 47.1 and employment held at 48.7. IMEF further raised concerns over Mexico's trade and services sectors — key drivers of Mexico's post-pandemic recovery, noting a recent loss of momentum. The group added this may have implications on the non-manufacturing PMI with its associated sub-components "on the verge of contraction". By James Young Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Ethanol prices up on uncertainty, low margins in Feb

06/02/25

Ethanol prices up on uncertainty, low margins in Feb

London, 6 February (Argus) — Spot ethanol prices in northwest Europe firmed to a six-month high at the start of February after several months of remaining largely steady. The minimum 64pc greenhouse gas (GHG) savings ethanol spot price reached €700/m³ on 4 February, its highest since 2 August 2024. Despite this, participants are reporting ample supply in the region, sufficient to meet current demand. The gains are largely attributed to a closed arbitrage with the US, higher production costs and ongoing uncertainty surrounding potential US tariffs. Some market participants believe the price rise in the ARA region is partially driven by higher ethanol prices in the US, which have been supported by rising corn prices . These participants said European prices may have tracked US price gains given the closed arbitrage with the country, with expectations that the arbitrage between the regions will reopen as a result of higher ethanol prices in ARA. Looking ahead, some market participants predict that ethanol imports will be reduced in the second quarter, which has caused the ethanol forward curve to shift into contango, with prices peaking at €711/m³ for the second quarter on 5 February. Trump tariffs turmoil Participants said prices are also being supported by uncertainty surrounding US president Donald Trump's plans to impose tariffs on imports from the EU. The European Commission said this week it will respond "firmly" should Trump "unfairly or arbitrarily" impose tariffs on EU goods. Trump made a similar complaint about the UK, but said he thinks "that one can be worked out". Retaliatory tariffs from the EU could affect ethanol flows, as the EU is a net importer of fuel ethanol. It imported almost 69,000t of undenatured ethanol — usually used for road fuel blending in most EU member states — from the US in January-November 2024, according to provisional EU customs data. The UK imported almost 600,000t of ethanol during the same period. The UK can leverage favourable arbitrage opportunities to import ethanol from the US and redirect it to the EU. Producers face higher costs Argus calculations show ethanol production margins for corn and wheat at €168.69/m³ and at €146.71/m³ on 5 February, down from €223.56/m³ and €205.33/m³ a year ago. Variable costs of yeasts, enzymes, chemicals and denaturants are not included in these calculations. Market participants said producers continue to adjust to a poor 2024-25 harvest season in Eastern Europe, caused by unfavourable weather conditions in Ukraine and France. Higher feedstock costs have contributed to higher ethanol prices, although the production margins are still tighter than last year. In Ukraine, Europe's largest wheat exporter excluding Russia, Argus forecasts wheat production will drop to 22.3mn t during 2024-25 , down from a five-year average of 24.7mn t. Corn supply from the country for 2024-25 is projected to fall to 22.9mn t, down from 31.5mn t in the previous season, according to Argus data. France — Europe's largest producer of ethanol — has cut its wheat production outlook for 2024-25 because of wet weather. Rainfall in other parts of Europe has affected corn toxin levels, potentially leading to poorer quality ethanol. This is likely to weigh on ethanol output in 2025 as it will strain feedstock supplies, push production costs up and squeeze margins for producers. More recently, European market participants said a late-winter cold snap may affect winter crops in Ukraine, and if so, strain feedstock supplies and push ethanol production costs up further. It comes as markets are still waiting for an update on level 2 in the nomenclature of territorial units for statistics GHG emission values, the so called Nuts 2 values. Biofuel producer Archer Daniels Midland expects ethanol profit margins to narrow this year, after posting wider margins in the fourth quarter. The company expects ethanol margins to drop to break-even in the first quarter on higher industry run rates, even as robust demand for exports from the US supports improved volumes, it said. ADM is one of the largest exporters of ethanol to Europe, according to those in the market. By Evelina Lungu Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Business intelligence reports

Get concise, trustworthy and unbiased analysis of the latest trends and developments in oil and energy markets. These reports are specially created for decision makers who don’t have time to track markets day-by-day, minute-by-minute.

Learn more