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Ethanol industry running into ‘blend wall’

Ethanol industry analysts are warning that the industry is running into the so-called “blend wall”.  And ethanol producers, after a few months of profitability, are once again back to break-even levels—and in some cases, losing money.  

Geoff Cooper, vice president for research with the Renewable Fuels Association, says the latest ethanol production statistics from the Department of Energy confirm that the blend wall has become an issue. 

“The numbers did indicate that we’re producing an amount of ethanol that is roughly equivalent to ten percent of gasoline demand right now,” Cooper says. “So that would indicate that we’re producing about as much ethanol as the market can handle in the form of E10.” 

A good reason why, Cooper says, EPA needs to increase the ethanol blend rate to 15 percent.  “So it absolutely makes sense to raise that blend wall to E15—or somewhere higher than E10, certainly—to allow the additional product to come into the marketplace and to allow consumers to enjoy the benefits of increased ethanol availability,” he says. 

EPA has promised a final decision on the E15 waiver request later this summer.