California, the last big holdout, and RFA's push to get its retailers ready for E15

E15 is coming to California, and RFA is running a program to get the state's retailers ready to sell it

California, the last big holdout, is opening to E15. The Renewable Fuels Association says it is continuing a program to help the state's retailers prepare to carry the higher blend, which means station owners in the largest gasoline market in the country now have to think about tank compatibility, dispenser labeling, and supply agreements they never needed before.

For a US jobber, this is the item that matters most out of the last day. California moves roughly a tenth of the nation's gasoline. Adding a 15 percent ethanol blend to that pool pulls more corn ethanol into the system and gives the RFS demand it has lacked on the coast. Retailers outside California should still read it, because equipment and labeling questions that get worked out there tend to set the pattern others follow.

Feedstock deals

Bayer and Neste are partnering to scale up winter canola grown for biofuels. Neste is one of the larger renewable diesel and sustainable aviation fuel producers, and canola oil is a feedstock it can run. Winter canola planted between other crops gives growers another oilseed to sell and gives refiners a domestic supply that competes with soybean oil and used cooking oil. For anyone watching renewable diesel margins, more feedstock acreage is the thing that eventually shows up in the cost stack.

Diesel on the farm

Farmers are feeling soaring diesel prices, per Brownfield. Harvest season is when ag diesel demand climbs, so the pinch lands right as growers are running equipment hardest. Higher on-farm fuel cost also feeds into the economics of every crop that becomes a biofuel feedstock, which ties the diesel line straight back to ethanol and biodiesel margins.

Brownfield also reports biofuels are driving optimism for commodity prices. Corn and soybean growers read biofuel demand as a floor under their crops, and rising blend mandates and new feedstock deals are what feed that read.

What to watch

Watch how fast California retailers actually convert. RFA continuing its program suggests the rollout is a work in progress, not a switch that flips, and the pace of conversions will decide how much new ethanol demand shows up and when.

Watch the Bayer-Neste canola acreage for signs it moves the renewable diesel feedstock balance. And keep an eye on ag diesel through harvest, because the cost of running a farm is now part of the biofuel supply chain, not separate from it.

The foreign items this cycle, India's flex-fuel push and used-cooking-oil deals in Vietnam and Mozambique, don't move US supply yet and stay off the front of the page.