OPINION: Helping retailers diversify to weather gas price debates

The rise in gas prices has been all over the news lately, and as we brace for another potential economic slowdown as the Omicron variant of COVID-19 arises, it is hard to say where the markets will go. What is clear, however, is that true energy security and resilience lies in greater fuel diversity, not greater dependence on  crude oil.

The benefits of ethanol and other biofuels are also clear. Ethanol offers a less-expensive octane enhancer for the fuel mix that is low in carbon and produced from renewable sources. It saves consumers money and is better for human health—as well as that of the planet. This is why we at the Renewable Fuels Association have been working so hard to push for the use of higher blends like E15 and flex fuels like E85. And this effort moves forward on several fronts.

As we’ve written before, an effort is underway to secure more funding for the U.S. Department of Agriculture to continue its Higher Blends Infrastructure Incentive Program. The version of the Build Back Better Act, which passed the House on November 19, includes nearly $1 billion in biofuels infrastructure funding. This funding can go a long way in getting E15  and E85 in more fuel dispensers and more vehicles—an important goal considering nearly every vehicle on the road today can already use E15 safely.

We’re not quite there yet with the new funding. The BBB Act has made it through the House but still needs to be passed by the Senate. But this is not stopping us from looking at extending our efforts in another direction: getting more flex-fuel vehicles on the road.

Earlier this year, Sens. Amy Klobuchar (D-MN) and Joni Ernst (R-IA) introduced the Clean Fuels Vehicle Act, which would encourage increased production and deployment of FFVs by creating a $200 refundable tax credit for each light-duty FFV manufactured for a period of 10 years. The legislation would also restore certain Corporate Average Fuel Economy credits that were previously available to automakers for producing FFVs.

Looking at the world today, we see that some countries have had no problem in ensuring more flex-fuel vehicles. Brazil has the world’s largest fleet of FFVs and even flex-fuel motorcycles. As of 2019, FFVs made up 89 percent of Brazil’s fleet of light-duty vehicles. India now has the goal of reaching 20 percent ethanol use by 2025, and its government is working on a policy to require its automakers to power their vehicles with flex-fuel engines.

It's no secret that Detroit’s newest passion is electric vehicles, and we expect the filling station of the future will offer recharging lines as well as fuel hoses. Again, it’s in fuel diversity that we truly experience energy security. But it’s time for our nation’s automakers to take the easy steps available to add more FFVs into our vehicle mix, and we can easily imagine new models of cars, trucks, SUVs and crossovers that are plug-in hybrids with flex-fuel capability.

The Brazil and India situations show that FFVs can work here, too. After all, the United States is not only the historic home of auto industry innovations but—by far! —the top producer of low-carbon renewable fuels. For fuel marketers, this provides the opportunity for expanding offerings through an updated infrastructure that is ready for the new fleet of fuel-efficient cars and trucks we hope to see.