Gavin Newsom Signs Bill Allowing E15 Fuel Sales in California

Governor Gavin Newsom signed Senate Bill 795 on September 20, 2026, authorizing the immediate sale of E15 gasoline, a blend containing 15% ethanol. California was the final U.S. state to prohibit the fuel, previously limiting ethanol blends to 10%. The legislation aims to reduce costs for drivers of 2001 and newer model vehicles in a market where average gasoline prices have reached between $6.14 and $6.17 per gallon.

Newsom attributed the surge in energy costs to the U.S. war with Iran, which he described as "costly and reckless," noting that the conflict "continues to disrupt global oil markets and drive up costs for families at the pump." The conflict has specifically disrupted tanker traffic through the Strait of Hormuz, which handles 20% of global petroleum products.

The Renewable Fuels Association estimates E15 could lower retail prices by approximately 20 cents per gallon, potentially saving drivers $2.7 billion annually. Aemetis Inc. expects the policy to add 650 million gallons of annual ethanol demand. While independent retailers may adopt the fuel within weeks, a full market transition could take months.

The move follows an April 28 emergency fuel waiver from the United States Environmental Protection Agency, issued under a national energy emergency declared by President Donald Trump. Due to air quality and engine concerns, the EPA restricts E15 use to flexible-fuel vehicles and conventional vehicles from model year 2001 onward, prohibiting its use in motorcycles and heavy-duty engines.