The Long and Winding Road to E15: Is It Finally Nearing Its Breakthrough?

For nearly half a century, ethanol has been woven into the fabric of the U.S. gasoline supply. The story began in the 1970s with the introduction of E10 – gasoline blended with 10 percent ethanol – after a Clean Air Act (CAA) 211(f) waiver^[1] took effect. By the early 2000s, refiners had embraced E10 wholeheartedly, redesigning their gasoline blendstocks to take advantage of ethanol’s high octane and low sulfur and benzene content. The economics were compelling, and E10 quickly became ubiquitous.

But as the market saturated, the ethanol industry faced a ceiling. The long-promised expansion of E85 – gasoline blended with 85 percent ethanol and intended for use in Flex-Fuel Vehicles (FFVs) – never materialized at scale despite two decades of incentives, including generous Corporate Average Fuel Economy (CAFE) credits and federal fleet mandates. With FFV growth stalling and E10 market saturation achieved, the industry turned to a new idea: raise the ethanol content of the fuel already used by the entire light-duty fleet.

That idea became E15.

The Regulatory Gauntlet

Introducing E15 required navigating the CAA’s “substantially similar” provisions, which protect vehicle emission systems from fuels that differ too much from those used in certification. In 2008, Growth Energy, an American trade group representing ethanol producers, approached the U.S. Environmental Protection Agency (EPA) to explore a waiver of the substantially similar requirements, and in 2009 it formally petitioned the agency for an E15 waiver alongside dozens of ethanol producers. Despite OEM warranty concerns, EPA partially approved the request in 2010 and 2011, authorizing E15 for model year 2001 and newer vehicles.^[2]

Yet the approval came with a critical limitation: E15 did not receive the 1-psi Reid Vapor Pressure (RVP)^[3] waiver that Congress had granted to E10 in 1990. Without that RVP waiver, E15 could not be blended into the same summer gasoline blendstock used for E10. It required a special, lower-RVP blendstock that the distribution system was ill-equipped to handle. Even in regions where the RVP waiver didn’t apply, such as reformulated gasoline (RFG) areas,^[4] E15 adoption remained sluggish, revealing deeper structural barriers than just RVP.

In 2019, EPA attempted to reinterpret the CAA to extend the RVP waiver to E15,^[5] but the courts overturned the rule. Since then, the agency has relied on temporary emergency waivers tied to global fuel supply disruptions. These waivers are short-lived and unpredictable, prompting a two-front campaign for a permanent fix:

1. A petition from eight Midwestern governors for EPA to remove the E10 waiver in their states which was finalized for 2025 but not yet effectuated due to ongoing emergency fuel waivers, and
2. Repeated legislative attempts to explicitly extend the waiver to E15 nationwide.

Despite bi-partisan support and a coalition of ethanol and some refining interests, Congress has yet to act.

The Infrastructure Reality Check

The physical infrastructure of America’s fueling stations – much of it installed decades ago – was certified only for blends up to E10. While many components are likely compatible with E15, retailers often lack the documentation required by insurers. Given the financial risk associated with underground leaks, most station owners have been unwilling to take the gamble to sell E15 through their existing stations.

Upgrading equipment to ensure E15 compatibility is expensive. EPA estimates that modest modifications can cost more than $100,000. Full underground replacements can exceed $1 million and require stations to close for extended periods. With razor-thin fuel margins, such investments are rarely recoverable. As a result, E15 growth has been tied closely to subsidies and new station construction, which account for only about 2 percent of retail outlets each year.^[6] From 2013 to 2024, E15 availability grew from 70 stations to 3,751,^[7] still a small fraction of the nation’s more than 200,000 stations.

The Economics of Blending

E10’s success over the last two decades has rested on strong economics. Ethanol’s high octane and blending value – estimated by EPA at more than $0.75 per gallon of ethanol^[8] – reduces refining costs. Meanwhile, its compatibility with existing infrastructure and its small impact on fuel economy make it easy to sell as petroleum gasoline. Credits under EPA’s Renewable Fuel Standard program^[9] and state programs like California’s Low Carbon Fuel Standard^[10] have provided additional support.

E15, however, has not enjoyed the same advantages. Infrastructure costs alone can add more than a dollar per gallon of incremental ethanol sold. When blended into BOBs^[11] designed for E10, E15 also sacrifices the additional octane value of the extra ethanol – a key driver for ethanol use. And in regions where E10 receives the 1-psi RVP waiver, refiners must lower BOB RVP by about 1 psi to accommodate E15, an added cost of 2.4 cents per gallon of gasoline which is equivalent to roughly 50 cents per gallon of additional ethanol blended.^[12] While E15 blends do receive a higher RIN value than E10, it’s typically not enough to cover these additional costs.

Signs of a Turning Tide

Despite these seemingly formidable hurdles, the landscape is shifting. Large independent retailers, some with the ability to self-insure, have begun offering E15 more broadly, conducting detailed audits of their infrastructure and absorbing the risk. Some are even converting entire stations to E15, allowing capital costs to be spread across all gasoline sales rather than just one or two pumps.

State policy is also accelerating change. Iowa now requires most stations to offer E15, South Dakota has enacted a temporary tax incentive for the higher ethanol blend, and late last year California authorized E15 use in the state for the first time.^[13]

Perhaps the most consequential development is occurring upstream. At least one refiner has begun producing a BOB specifically designed for E15, capturing the full blending value of the additional ethanol. While limited to local distribution, this mirrors the early 2000s shift to E10-specific BOBs – a change that eventually swept the industry through competitive pressure.

Meanwhile, bipartisan support continues to build for legislation that would permanently extend the 1-psi RVP waiver to E15, eliminating a seasonal restriction in much of the country.

A Market on the Brink with a Bumpy Road Ahead

After nearly two decades of effort, E15 appears closer than ever to widespread adoption. But the transition will not be smooth. Refiners capable of producing and marketing E15-specific BOBs can gain a significant competitive advantage, potentially forcing others to follow. Pipelines may eventually shift to E15 BOBs in regions where adoption becomes widespread, just as they did with E10. Unlike with E10, however, the ability for this to happen for E15 will be dependent on a market transition at retail.

Retailers, facing intense price competition, may feel compelled to offer E15 if competitors can sell E15 at a discount and with a higher profit margin. This dynamic could create a powerful feedback loop: more E15-capable retailers encourage more E15-specific BOB production, which in turn lowers costs and accelerates adoption.

California may be the first state where this loop takes hold. With the highest gasoline prices in the country, lack of RVP penalties for E15, proximity of large retail markets to refineries, and strong LCFS incentives, the situation is uniquely favorable for E15. Iowa, with its E15 availability mandate, is another state to watch, though its ability to drive upstream changes remains uncertain.

The road to E15 has been long, winding, and often frustrating for proponents of the higher ethanol blend. Yet for the first time, the pieces required for a true market breakthrough – regulatory clarity, infrastructure readiness, economic viability, and political momentum – are beginning to align. The final stretch may still be bumpy, but the destination may finally be coming into view.

The author of this article, Paul Machiele, is the President of Fuel Policy Advisors, LLC. advising clients on world, federal, state, and local fuel policy issues. He previously worked for the U.S. Environmental Protection Agency for 39 years, leading the development of new regulatory programs with a focus on fuel programs. Paul is also a Senior Associate with Stillwater Associates.