California opens door to E15 gasoline sales, aiming to cut pump prices

California Governor Gavin Newsom signed legislation allowing the sale of E15 gasoline in the state, saying the move could lower fuel prices by up to 20 cents/gal "without adding environmental harm."

Prior to the signing, California—the largest motor fuel market in the US—was the only state in the US where sales of gasoline blended with 15% ethanol were prohibited. Assembly Bill 30, which passed unanimously through both chambers of the state legislature, allows the immediate sale of the fuel.

"Thanks to our work with the legislature, we have averted billions of dollars in higher costs at the pump by avoiding the kinds of severe gasoline price spikes we saw a few years ago," Newsom said in a statement. "While we continue the critical work to stabilize our state's fuel market, we're cutting red tape to provide consumers with more options as we continue our transition to cleaner transportation."

The governor's office cited a study from the University of California, Berkeley, and the US Naval Academy, which found the policy change could save California drivers as much as $2.7 billion annually, or $200/household, but would require supply infrastructure updates throughout the state, including gas stations.

In October, Newsom directed the California Air Resources Board to expedite an environmental study on whether E15 meets the state's clean air requirements. CARB's study is not yet finished, but AB30 allows E15 sales to begin immediately while CARB completes its formal approval process.

Ethanol trade groups celebrated a long-awaited policy victory.

"Many other states have already seen the benefits of E15—healthier air, better engine performance, and cost savings at the pump," Renewable Fuels Association President and CEO Geoff Cooper said in a statement. "Now, California drivers are about to experience those same advantages for themselves."

E15 'momentum'

The legislation represents the culmination of extensive ethanol industry efforts to penetrate California's fuel market, which operates under stringent environmental regulations that have historically limited fuel blend options. The Renewable Fuels Association launched a multimedia evaluation of E15 in collaboration with CARB and other ethanol industry stakeholders in 2018, while other groups have consistently pushed California to expand biofuel availability and pushed back against statewide emissions targets designed to accelerate the electrification of the ground fleet.

Newsom's support for E15 gained momentum a year ago, when he directed CARB to expedite its review, stating there was "massive potential for this to be a win-win for Californians." The governor included funding for E15 regulatory approval in his 2025-26 budget request, which was incorporated into the state's final adopted budget in June.

While E15 is available at more than 3,000 stations across various US states, proponents have argued its adoption has been artificially limited by a patchwork of policies, including inconsistent guidance at the federal level, a traditional ban on the fuel in summer months due to smog concerns, and a lack of retailer understanding about the timing and practicality of sales.

In April, the US Environmental Protection Agency issued a nationwide waiver allowing E15 sales in the summer driving months, applying the 1-psi Reid Vapor Pressure waiver that allows E10 gasoline sales to E15. The Biden administration issued the same waiver in 2022, 2023, and 2024, arguing it would help minimize fuel price spikes amid Russia's invasion of Ukraine and ongoing global tension.

In 2024, when the EPA granted an indefinite E15 carveout to eight Midwestern states, then-EPA Administrator Michael Regan said the decision would result in "no overall change in evaporative emissions."

Still, the industry has pushed for federal standardization, urging Congress to take up a nationwide E15 bill that US Senator Deb Fischer, Republican-Nebraska, proposed. In December, the language of Fischer's bill made it into an initial draft of Republican Speaker of the House of Representatives Mike Johnson's continuing resolution to fund the government, but was stripped out at the last minute after US President Donald Trump and campaign allies called on Republicans to excise spending that did not directly involve federal funding.

Fischer's bill, the Nationwide Consumer and Fuel Retailer Choice Act of 2025, was reintroduced in the 119th Congress. A bipartisan group of 12 senators and 28 representatives, many of whom hail from Midwestern states, cosponsored the bill in both chambers of Congress.

"With California now on board, momentum for E15 is stronger than ever," American Coalition for Ethanol CMO Ron Lamberty said in a statement. "The future of the US fuel market includes higher ethanol blends, and the next step is ensuring year-round, nationwide access to E15, so retailers can make changes without worrying about having to switch fuel offerings during the busiest time of their year, and drivers everywhere can rely on low-cost E15 being available every time they pull up to the pump."