The American Fuel & Petrochemical Manufacturers (AFPM) proposed on Friday (13th April, 2018), that the US government should consider moving from ethanol blending standards to the ones which takes basis of octane rating for gasoline. The comments from Chet Thompson, CEO of the AFPM came before the US House Energy and Commerce Subcommittee on the Environment.
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Currently the norms allow maximum 15% of ethanol blending (E15), but that is restricted to winter while normal norm is 10% blend. There was recent proposal by President Donald Trump to allow E15 throughout the year to improve the environmental impact.
From supplier point, the volumes of ethanol blending has come to collide with the limits by automobile fleets. The options available with many fleet is limited to 10% blending while exceeding that results in warranty voidance. Even in terms of ethanol supply, the refiners have struggled to meet Renewable Fuel Standards (RFS) and bank on purchasing credit known as renewable identification numbers (RINs). The increasing cost of RINs is adding extra cost pressure on refiners which are struggling financially.
The proposed standards would provide flexibility to refiners to utilize different octane improvers reducing load on ethanol supply. There are number of options from which the consumers can select the octane improvers of their choice. The alkylate of isobutane are good examples which came in high demand from world war II. The AFPM suggests that the variety of options available within octane improvers can be harnessed to offer win-win situation for both consumers and suppliers.
The historic trends suggest that even if the government considers the options, there are many parameters to consider. Some of these might be the environmental impact of potential additives, market availability, impact on automobile fleet among others. Thus, the implementation of policies and industry level changes in overall octane improvers market are expected to come several years later at least. As consumer, we all can hope is the group of optional additives provide at least equivalent environmental benefit, if not better than ethanol.