Key facts
- California Governor Gavin Newsom signed legislation allowing the immediate sale of E15, a gasoline blend containing 15% ethanol.
- The measure is expected to benefit ethanol producers and corn growers.
- Aemetis CEO Eric McAfee estimated the change could add about 650 million gallons of annual ethanol demand in California.
- Average gasoline prices in California were hovering near $6.14 per gallon on Sunday, compared with a national average of $4.44 per gallon.
- The Renewable Fuels Association cited a study suggesting E15 could lower retail gasoline prices by roughly 20 cents per gallon and save California drivers at least $2.7 billion annually.
California Governor Gavin Newsom signed legislation on Saturday allowing the immediate sale of E15, a gasoline blend containing 15% ethanol, in the state. This move, enacted through Senate Bill 795, removes the final regulatory obstacle for the fuel's sale and aims to lower the high cost of gasoline for consumers.
California had been the only US state where E15 could not be sold. Newsom stated the bill cuts "unnecessary red tape while maintaining our environmental and safety standards," making E15 a viable option for drivers.
The change is expected to boost demand for ethanol producers and corn growers. Eric McAfee, CEO of renewable fuels producer Aemetis, estimated that the shift could create an additional 650 million gallons of annual ethanol demand in California. He noted that ethanol currently sells wholesale for about $2.30 a gallon, offering significant cost savings compared to gasoline in the state.
As of Sunday, average gasoline prices in California were near a record high of approximately $6.14 per gallon, substantially higher than the national average of $4.44 per gallon, according to GasBuddy data. The approval of E15 comes as Congress considers legislation for year-round E15 sales nationwide. The urgency for such measures has increased due to global oil market volatility, exacerbated by the war with Iran, which has driven up fuel prices and raised concerns about crude supply disruptions. California's high gasoline prices are attributed to stringent fuel standards, taxes, and reliance on imported petroleum products.
The Renewable Fuels Association, citing a 2024 study by economists from the University of California, Berkeley, and the US Naval Academy, stated that E15 could reduce retail gasoline prices by about 20 cents per gallon and save California drivers at least $2.7 billion annually.