The United States Environmental Protection Agency (EPA) issued a waiver on April 29 to permit the sale of E15 petrol this summer, in accordance with a statement made by the White House a few weeks prior.Because petrol with a 15% ethanol concentration (E15) contributes to the buildup of pollution during the warmer summer months, it was formerly prohibited from being sold between June 1 and September 15.

What impact would this have on the US market for maize, the source of ethanol, and how would it affect the demand for ethanol in the US?

One of the renewable fuels that must be mixed into transportation fuels to lower greenhouse gas emissions is ethanol, as required by the US Renewable Fuel Standard (RFS). The price of ethanol mixed fuels is typically lower than that of petrol, reflecting its inferior fuel economy (particularly at higher blends). This is typically observed in the E10 formulation (10% ethanol, 90% petrol). About 40% of the maize produced in the United States is used to produce this biofuel domestically. It is mostly made from corn.

Policy initiatives to lessen the financial strain on consumers have been sparked by the recent steep rises in petrol prices; on April 29, the US EPA approved a waiver allowing the sale of E15 petrol over the summer. This aims to increase supply by using more ethanol, which will counteract the high costs.

There is a restricted supply of E15 available for purchase at the pump; in 2021, 2,300 out of 153,000 retail stations sold E15 nationally. The needs of certain equipment for compatibility have a role in the availability constraint. The rise in market acceptance has also been constrained by consumer knowledge and engine compatibility worries.

Of the 134.8 billion gallons of mixed petrol supplied in 2021, E15 made up just 0.8 billion, or 0.6%, of the total blended petrol used. It is anticipated that the lifting of the E15 restriction will result in an increase in demand of 15 million more gallons of ethanol, assuming that the obstacles to further E15 use stay in place. Even while this might seem noteworthy, it only accounts for 0.11% of the 13.8 billion gallons of ethanol needed to produce petrol each year.