A new pro-ethanol change to gasoline refining standards is set to increase butane supply at refiners serving the Midwest.
The Rule: In 2024, eight Midwest states received approval from the Environmental Protection Agency (EPA) to opt out of a Reid vapor pressure (RVP) waiver offered to E10 gasoline (fuel with a 10% ethanol blend) during the summer ozone season. The change went into effect April 28, 2025.
The EPA limits access to E15 gasoline (15% ethanol blend) in most of the US during the ozone season running from June 1 – September 15. Under the Clean Air Act, the EPA provides a less-stringent waiver for E10 fuel specifications vs E15, putting the heavier ethanol blend at a disadvantage.
The Midwest states are large producers of corn and ethanol, and sought to end the discrimination against E15 fuel. They are opting out of the waiver that allows E10 a maximum RVP of 10 psi (pounds per square inch), while E15 has a maximum RVP of 9 psi.
RVP measures the volatility of gasoline and petroleum products. A higher RVP means more evaporation and more emissions than from fuels with a lower RVP. By opting out of the waiver, the Midwest states will put E10 and E15 on an equal RVP footing of 9 psi max.
Why it Matters: Butane is used as a blending agent to make motor gasoline in the winter, but demand falls in the summer when refiners remove butane in order to lower the RVP and meet fuel specifications.
Lowering the permitted RVP for gasoline sold in the Midwest states will encourage more butane recovery. According to the Energy Information Administration (EIA), about 2 gallons of normal butane must be removed from 100 gallons of motor gasoline to reduce the RVP by 1 psi.
The map shows the states in PADD 2 where the new regulations will take effect: Illinois, Iowa, Nebraska, Minnesota, Missouri and Wisconsin. Ohio and South Dakota also have approval to opt out of the EPA wavier but have received a one-year extension. The eight states consumed a total of 1.3 MMb/d of motor gasoline in 2023, according to EIA data.
See East Daley Analytics’ NGL Purity Products Forecast for more information. We estimate 26 Mb/d of additional butane could be recovered by refiners as a result of this regulatory change, or a 3.5% increase in US normal butane supply. – Alex Albazzaz.
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