Decades ago, a few Midwest states led the drive for American energy independence and savings at the pump by advocating for greater access to E10. What began as a small ripple in the fuel supply grew into a giant wave of benefits nationwide, and nearly every gallon of gasoline sold in the U.S. now contains at least 10 percent bioethanol.
New policies and incentives emerging across the Midwest have swelled sales of 15 percent bioethanol blends, and the next wave of fuel could be the most rewarding.
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About E15
E15 is a 15 percent bioethanol gasoline blend that is EPA-approved for all 2001 and newer cars, light-duty trucks, and SUVs. Drivers can find E15 at over 3,400 gas stations in 31 states and growing. According to Growth Energy, the nation's largest biofuel trade association, earlier this year, Americans surpassed 100 billion total miles driven on E15.
In 2023, Americans saved an average of 22 cents per gallon with E15 compared to E10 gasoline, with savings reaching 40 to 60 cents per gallon in some states. Unfortunately, drivers can only access savings from E15 at the limited number of stations where it is offered today. Lawmakers across the Midwest are working to change that.
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Midwest states driving E15 policy
Iowa and Nebraska recently signed Access Standards into law to ensure consumers have the freedom to fill up with E15 at gas stations with compatible infrastructure and fueling equipment. Leaders in both states understood that the economic benefits of E15 measure far beyond the gas pump. Increasing in-state bioethanol production and sales of E15 lifts farm incomes, generates more state and local tax revenues, and supports local jobs and investments.
As Nebraska Governor Jim Pillen noted when signing his state's E15 Access Standard into law last year, increasing bioethanol production with E15 also expands the available supply of bioprocessing co-products, helping beef, dairy, and pork producers access more abundant and affordable feed.
In addition to E15 Access Standards, a growing number of Midwest states are considering temporary tax incentives to get more retailers and consumers to make the shift. Illinois passed a 10 percent sales tax exemption, which offers consumers an additional discount on E15. More than a half dozen other Midwest states are focused on expanding E15 offerings at more locations by offering tax incentives for each gallon of E15 retailers sell.
"E15 incentive programs more than pay for themselves," said Michael Walz, POET Vice President of Public Affairs. "The cost is capped in most states, so the fiscal price tag is small, but each incentive has the potential to generate millions more in consumer savings each year."
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South Dakota
South Dakota is aiming to expand the use of bioethanol and value-added agriculture with a new E15 tax refund for the state's fuel stations. Governor Kristi Noem signed into law a 5-cent-per-gallon tax refund on E15 sales from any South Dakota fuel station. The program is scheduled to run from 2025 to 2030.
"Renewable fuels are a very important part of America's all-of-the-above energy supply, and ethanol is vital to South Dakota's future," said Governor Noem. "It will make higher ethanol blends more readily available, bringing prices down at the pump. We're committed to an all-of-the-above approach to energy that doesn't pick winners and losers but lowers prices for all South Dakotans."
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South Dakota joined Iowa, Nebraska, Missouri, and Illinois in adopting tax incentives for E15. Similar E15 incentive legislation has also been introduced in Indiana, Kansas, Michigan, Minnesota, and Ohio.
Ohio
In February, the Ohio House of Representatives passed House Bill 324, sponsored by State Representative Riordan McClain, by a vote of 88-6.
"E15 is not a new product, but since it entered the market, its availability has been suppressed," said McClain. "It is our hope by offering this temporary tax credit, the availability of this Ohio-produced, cost-saving fuel will increase across the state."
The bill now awaits a hearing in the Ohio Senate.
Ensuring year-round E15 access
In 2022, a bipartisan group of Midwest governors sent a letter to the U.S Environmental Protection Agency (EPA) exercising their authority under the Clean Air Act to provide “relief, flexibility, and certainty in the fuel market" and give E10 and E15 regulatory parity in their states.
In February of this year, the EPA approved the final rule, giving Illinois, Iowa, Minnesota, Missouri, Nebraska, Ohio, South Dakota, and Wisconsin the ability to sell E15 year-round starting in 2025.
"Providing year-round sales of E15 is the permanent solution that was needed to provide long-term economic relief and certainty in the fuel market," said Minnesota Governor Tim Walz. "This action means lower emissions and lower-cost choices for drivers."
E15 policies are paying off
Minnesota and Iowa are the only two states that currently track retail sales of E15, and both reported record-breaking sales in 2023. The Iowa Department of Revenue's Retailers Motor Fuel Gallons Annual Report showed E15 sales increased 47 percent year-on-year to a record 178 million gallons.
"Iowans appreciate having cheaper, cleaner-burning E15 as an option at the pump, leading to record-breaking sales in 2023," said Iowa Governor Kim Reynolds. "Biofuels not only play a huge role in Iowa's agriculture economy, but provide Iowans with a cheaper alternative to regular fuel."
Nationwide sales of E15 reached an estimated record of 1.1 billion gallons in 2023, up approximately 8% year to year.
As we enter the summer driving season, E15 remains the best choice for the most vehicles, offering better engine performance, lower emissions, and significant savings. Consumers can also rest assured that every time they fill up with E15, they're helping to grow our economy and make America more energy-independent.
"We are grateful to Midwestern champions of E15 and excited to see their efforts already paying off," said Joshua Shields, POET Senior Vice President of Corporate Affairs. "The Heartland is leading the way to year-round, nationwide E15, and that's good news for every American."
