According to a new study by economists at UC Berkeley and the U.S. Naval Academy and sponsored by the Renewable Fuels Association, California drivers could save up to 20 cents per gallon if the state allowed gas stations to sell 15% ethanol blended fuel or E15.

The potential savings for California consumers could reach $2.7 billion annually, according to the study authored by David Zilberman, PhD, a distinguished professor in the Agricultural and Resources Economics Department at UC Berkeley, and Scott Kaplan, PhD, assistant professor in the Economics Department at the United States Naval Academy.

“Consumers have the potential to gain significantly from the introduction and purchase of E15,” according to the study. “In particular, our estimates suggest an approximately 20 cents per gallon discount for E15 compared with E10 after adjusting for energy content.” The authors also highlighted the benefit of E15’s lower carbon emissions. “In California, price savings for lower GHG intensity fuels are larger, likely due to California-specific policies incentivizing low carbon fuels.”

California is currently the only state that sells E10 and E85, but not E15. State regulators are considering approval of E15 after extensive vehicle testing showed the fuel offers important emissions benefits. E15 is federally approved for use in all cars, pickups, SUVs and vans manufactured in the last 24 years.

“Based on this study’s results, a typical California household could save $200 per year on their gas bill if state regulators would simply allow drivers to fuel up on E15,” said RFA President and CEO Geoff Cooper, noting that more than 24 million registered vehicles in California are already approved to use E15, but stations are not allowed to sell it. “It’s time for California to catch up to the other 49 states that already allow consumers to choose lower-cost, lower-carbon E15. The state’s failure to approve the use of E15 essentially amounts to a gas price hike at a time when hardworking Californians can least afford it.”