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PHH Arval Alternative Fuel Vehicle (AFV) Study Part 5: Ethanol

October 31, 2012

By Sarah Mallonga, Project Manager, Strategic Consulting for PHH Arval

This is the fifth part of a series of articles from PHH’s Strategic Consulting group on alternative fuel vehicles. Here we examine ethanol-fueled vehicles.

Ethanol

Ethanol is produced from renewable sources such as corn, sugar cane or other biomass sources. To develop motor fuel, a percentage of ethanol is blended with unleaded gasoline. Any amount of ethanol can be combined with gasoline, but the most common blends are E10, a “low-level” blend of 10% ethanol and 90% unleaded gasoline, and E85, a “high-level” blend of 85% ethanol and 15% unleaded gasoline.

E10 is approved for use in any make or model of vehicle sold in the U.S. and Canada. Since E10 can be used in any gasoline vehicle, ethanol content is not always labeled at the gas pump. In some areas the use of E10 is mandated to reduce emissions, and consumers don't have the option to choose 100-percent gasoline.

E85 is a high-level blend. Flexible fuel vehicles (FFVs) are equipped with a slightly modified internal combustion engine and are designed to run on either gasoline or E85 (or lower-level blends). E85 cannot be legally used in conventional gasoline-powered vehicles.

Fleets that might consider adding ethanol-fueled vehicles are best served in the following scenarios:

Passenger vehicles and light duty applications in U.S.
Operate in region(s) with E85 fueling stations available

The following are pros and cons of these vehicles:

E85 / Flex-Fuel Vehicles
Pros	Cons	Additional considerations
Reduced tailpipe emissions levels Fuel price is generally lower than gasoline (but spread varies) High-octane fuel, offering increased vehicle power and performance Renewable fuel resource with domestic availability Multiple OEM offerings of FFVs, with low incremental acquisition cost over gasoline-powered vehicles FFVs can run on either E85 or gasoline, reducing “range anxiety”	Lower energy content of E85 results in lower fuel economy and higher fuel consumption Limited availability of E85 fueling stations in the U.S., varying by region; not yet commercially available in Canada Can cause difficulty in starting a cold engine unless chemicals are added Many drivers don’t know they have an FFV and a choice of fuels	Environmental benefits are diminished (or eliminated) when FFVs are run more (or solely) on gasoline