This article covers the most recent trends in ethanol blended fuel sales in Iowa. Data used comes from annual retail fuel sales data and rack level sales data collected and maintained by the Iowa Department of Revenue (IDR). Sales trends for the following fuel blends will be explored: E0, E10, Registered E15, Flex Fuel E15, E20, and E85. For an explanation on these fuel types see the endnotes.
Annual Retail Sales
The annual retail fuel sales data indicate that from 2015 to 2020, sales of E0[1] (ethanol-free gasoline) in Iowa averaged about 0.21 billion gallons. Sales in 2020 dropped below the 5-year average to 0.20 billion, a decrease of 5.7% relative to 2019 values (see Figure 1).
These data also indicate that from 2015 to 2019, sales of E10[2] in Iowa averaged 1.32 billion gallons with 2017 to 2019 sales declining at an average annual rate of 1.6%. Sales in 2020 of E10 reached 1.06 billion gallons, a decrease of 17.1% relative to 2019 values (1.284 billion gallons) (see Figure 1). The significant sales decreases experienced by both fuel types reflect the large impact of the COVID-19 pandemic on the ethanol industry. With quarantine and travel restrictions, demand for ethanol fell with the reduction in gasoline consumption, particularly during early spring of 2020.
Figure 1. Annual E10 and Ethanol-Free Gasoline (E0) Retail Sales in Iowa
E15 Sales Growth
E15 in Iowa is sold and tracked in two different ways: “Registered E15[3]” which comes to the gas station pre-blended as E15 and is registered with the state as such. “Flex-fuel E15[4]” is sold through a blender pump (see Figure 2) which pulls a percentage from the E10 storage tank and a percentage from the E85 storage tank. Both fuels can be sold year-round.
Source: flexfuelforward.com
Figure 2. Blender Pump
IDR data show that since 2015, sales of Registered E15 in Iowa have grown substantially (see Figure 3). Registered E15 sales in 2020 were about 35 times higher relative to 2015 (1.715 million gallons). In contrast to the decreased retail sales of E10 in 2020, Registered E15 sales increased significantly reaching 59.720 million gallons, a 25.9% increase relative to 2019 values (47.439 million gallons).
However, Flex Fuel E15 sales did not experience the same growth. In fact, IDR data show a significant decrease of Flex Fuel Sales, reaching 867,853 gallons, a 42.9% drop relative to 2019 values (1.520 million gallons).
Figure 3. Annual Retail Sales of E15 in Iowa
The expansion in Registered E15 sales in 2020 is, in large part, due to the 2019 U.S. Environmental Protection Agency’s (EPA) decision to lift summer restrictions limiting E15 to flex-fuel vehicles. This eliminated a significant barrier to E15 market access and allowed for year-round use of E15.
Note that on July 2, 2021, a U.S. federal appeal court reversed EPA’s 2019 rule that lifted the restrictions allowing the sale of E15 year-round. However, following this reversal – as reported by Growth Energy – the bipartisan Consumer and Fuel Retailer Choice Act was introduced in the Senate. The bill seeks to increase access to gasoline with higher ethanol blends. Approval of this bill would extend the waiver that would allow year-round sales of E15 in Iowa once again. On the same day, in the House of Representatives, a bipartisan bill was introduced Year-Round Fuel Choice Act. Approval of this bill would ensure year-round sales of E15 in all fuel markets.
Other Blends
E20[5] was another ethanol-gasoline blend that increased sales in 2020. According to IDR data, about 1.119 million gallons of this fuel were sold in Iowa in 2020, an increase of 62,646 gallons since 2019 (see Figure 4).
Conversely, IDR data indicate a significant decrease in 2020 E85[6] sales. Sales of E85 in Iowa reached 14.849 million gallons, a 22% from the 19.029 million gallons slod in 2019 (see Figure 4).
Figure 4. Annual Retail Sales of E15, E20, and E85 in Iowa
Share of Total Fuel Sales by Ethanol Blend
In 2020 Iowa sold a total of 1.340 billion gallons of fuel, of which 1.141 billion gallons corresponded to the sales of ethanol-gasoline blends, and the remainder corresponded to the sales of ethanol-free gasoline (E0). Overall, the share of all ethanol blended fuels sold in Iowa to total fuel sales in 2020 was 85.1%, with the rest coming from E0 sales.
Sales of E10 remain the largest contributor to biofuel sales in Iowa. Due to the significant reduction of E10 sales in 2020, its contribution to total fuel sales dropped from 82.1% in 2019 to 79.4%. As Figure 5 shows, the share of Registered E15 to total fuel sales increased from 0.1% in 2015 to 4.5% in 2020 – up from 3.0% in 2019. The share of E20 sales has remained unchanged since 2017 at around 0.1%. The share of E85 sales relative to total fuel sales in 2020 was 1.1% – down from 1.2% in 2019.
Figure 5. Share of Total Fuel Sales in Iowa by Ethanol Blend
Total Ethanol Volume
The total volume of ethanol used in ethanol-gasoline blends sold in Iowa during 2020 was estimated at 127.493 million gallons. About 106.450 million gallons of pure ethanol were used in the sales of E10 –down from 128.433 million gallons in 2019. In addition, 11.731 million gallons of pure ethanol were used in the sales of E85 – down 15.6% year-over-year. Furthermore, 9.0 million gallons of pure ethanol was used in the sale of E15 – up from 7.1 million gallons in 2019 and up from 0.3 million gallons in 2015 (see Figure 6).
Figure 6. Pure Ethanol Usage by Type of Ethanol Blend in Iowa
Monthly Sales of Ethanol Blends in Iowa
The IDR used to publish rack level monthly sales of “ethanol blended gasoline,” and E85 separately. The “Ethanol blended gasoline,” mainly included sales of E10 and also may have included higher blends such as E15. As of August 2020, the IDR publishes rack level monthly sales of E10 to E14 blends, and E15 or higher blends – including E85. These changes make it difficult to compare monthly historical rack sales data published prior to August 2020 with historical rack sales data published after August 2020. For example, although the ethanol blended gasoline series mainly included E10 sales, it also included Registered E15 sales, which have been increasing since 2015. The new series – E10 to E14 sales – however, is mainly composed of E10 sales. Comparing both series could indicate larger sales during the time the old series was published – particularly during the last three years, as Regulated E15 sales were included in the series. As Figure 7 shows, sales of E10 to E14 from August 2020 to May 2021 were down 7% from sales of Ethanol blended gasoline during August 2019 to May 2020.
When comparing Iowa’s old E85 monthly rack sales data series with the new E15 or higher blends data series (which includes E85), these data clearly indicate larger sales volumes of E15 or higher blends, mainly due to the significant increase in sales of registered E15 (see Figure 8). From August 2020 to May 2021, 33.564 million gallons of E15 or higher blends were sold in Iowa markets at the rack level.
Overall, the two new data series could approximately indicate the monthly trend in the sales of E10 (E10 to E14 blends series), and Registered E15 sales (E15 of higher blends series).
Figure 7. Iowa Monthly Rack Level Sales of Ethanol Blends and E10 to E14*
Figure 8. Iowa Monthly Rack Level Sales of E85 and E15 or Higher
Programs that Support Sales of Higher Ethanol Blends
Among the programs that support the sales expansion of higher ethanol fuel blends is the Iowa Renewable Fuels Infrastructure Program (IRFIP). The IRFIP incentivizes retail operators of motor fuel dispensing sites or fueling stations to convert their equipment to allow increased use of renewable fuels in the state. The IRFIP uses grant incentives to encourage these renovations. Reimbursement is based on the time commitment to sell certain renewable fuels: reimbursement can be up to 50% of the cost for specific components of the project for a 3-year commitment, and up to 70% for specific equipment or installation costs for a five-year commitment. According to Iowa Department of Agriculture & Land Stewardship, to date, the program has distributed – or obligated – more than $38 million to help fund 335 E85 dispensers/blenders, 362 biodiesel dispensers/blenders, 72 E15 projects, and 143 biodiesel terminals in Iowa.
In addition to the IRFIP, the USDA’s Higher Blends Infrastructure Incentive Program (HBIIP) seeks to substantially increase the sales and use of higher ethanol fuel blends (e.g., E15) and biodiesel (e.g., B20), created from U.S. agricultural products, through the expansion of renewable fuel production infrastructure. The HBIIP supports the sales of higher blends by sharing the costs associated with building biofuel related infrastructure. According to the Iowa Renewable Fuels Association (IRFA), in October of 2020 the USDA announced the grantees of $22 million worth of HBIIP grants across 14 states, making it possible for those fuel retailers to supply higher blends of biofuels. According to the announcement, the $22 million granted was the first round of awards coming from the $100 million program. Among the recipients there were 15 Iowa fuel suppliers.
Iowa is increasing its contribution to the reduction of greenhouse gas emissions by expanding the sales of higher ethanol blends, particularly E15. Approval of the recently introduced legislature in the U.S. Congress, would ensure year-round sales of E15 in all fuel markets.
Endnotes:
[1] E0 – Fuel blended with 0% ethanol, referred to as “Ethanol-Free Gasoline.”
[2] E10 – Fuel blended with 10% ethanol.
[3] Registered E15 – Fuel pre-blended with 15% ethanol, sold only by retailers registered with the U.S. Environmental Protection Agency to sell E15 to cars made in 2001 or later.
[4] Flex Fuel E15 – Fuel blended on site by a blender pump resulting in a fuel containing 15% to 19% ethanol.
[5] E20 – Fuel blended with 20% – 69% ethanol.
[6] E85 – Fuel blended with 70% – 85% ethanol.