Are E85 Vehicles Destined for Extinction?

In 1988, the United States government began allowing carmakers to use E85 flex-fuel vehicles—which run on a blend of 85 percent ethanol and 15 percent gasoline—to help meet Corporate Average Fuel Economy standards. For each mile-per-gallon a flex-fuel equipped vehicle is theoretically capable of getting from ethanol, the government said it would add to the vehicle’s total fuel efficiency rating. For example, an E85 light duty truck that averages 13 mpg is currently credited with about a 23 mpg rating.

What the credits essentially do is help automakers cook their fuel economy books by producing hundreds of thousands of flex-fuel vehicles that will likely never even use E85—all the while getting credit for decreasing the amount of gasoline used by their fleet.

When gas prices are low, there is often virtually no economic incentive for drivers to fill their cars and trucks with ethanol. What’s more, currently only about 2,500 of the 162,000 gas stations in the United States actually offer E85—and most of those are located in the Midwest. This means that many drivers of flex-fuel vehicles have no chance of using the fuel to significantly cut their petroleum consumption—even if they wanted to.

The End is Near?

The federal government’s special affinity for ethanol dates back decades, but it may be coming to an end soon. The E85 CAFE credits are scheduled to end in 2016, and a slew of other ethanol production and blending incentives have either expired or are scheduled to expire at the end of 2010.

Despite this, automakers say they’re on track to follow through with their promise to double production on flex-fuel vehicles over 2006 levels. General Motors, Ford and Chrysler say that by the end of the year they will be prepared to collectively produce 1.4 million flex fuel vehicles per year, beginning in 2011. By 2012, American automakers say that half of the vehicles they make will be flex-fuel-capable.

All of this seems to fly in the face of a report by Automotive News that cites several industry analysts as saying that flex-fuel vehicles will likely be phased out when the E85 CAFE credits expire in 2016. Or does it?

Carmakers Will Likely ‘Wait and See’

Manufacturing a car or truck to run on flex-fuel costs about the same as making one that runs just on gasoline, meaning that carmakers have been able to have their cake and eat it too on the E85 issue. Since it costs the industry almost nothing more to produce flex-fuel vehicles, why not just do it anyway while continuing to reap the regulatory and “green cred” PR benefits along the way?

A new loophole in the Energy Independence and Security Act of 2007 made CAFE credits exchangeable between different classes of automobiles and tradable between companies. It also allows carmakers to carry over credits for up to five years. So even though the allowable E85 credit for each automaker—averaged across its entire fleet—is 0.9 mpg each year, the flex-fuel boost that carmakers accumulate between now and 2016 can be carried over and traded until 2020.

Of course, there’s always the chance that Congress could act to extend E85’s special CAFE status well beyond 2016. Though many scientists, politicians and environmentalists have turned against ethanol in recent years—citing its multi-billion dollar per year cost to the taxpayer and evidence that it doesn’t decrease lifecycle carbon emissions over gasoline—there remains a considerable amount of support for the fuel on Capitol Hill.

The ethanol industry has teamed up with large agricultural corporations and trade groups to spend millions of dollars each year lobbying for government support. At any time between now and 2016, a deal could be made with some of ethanol’s most powerful supporters in Congress to extend the credits. Some of those supporters are key Midwest moderates whose votes are often crucial to getting a bill passed, meaning that if the Obama administration wants to pass a climate bill or some other piece of politically contentious legislation, Democratic leaders could be forced to strike a compromise on ethanol.

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  • Anonymous

    E85 is greenwashing

  • JamesDavis

    E85 is not only greenwashing, they are also cheating the tax payer out of billions of dollars and taking food out of our children’s mouths. Only idiots and child abusers would take food out of their children’s mouths and put it in their gas tanks. The car makers should be shame of themselves…of course greed eliminates all logical thinking, morals, and humanities from our society.

  • Anonymous

    Death of a stupid idea, I like!!

  • Stephanie Dreyer

    An increase in Flex Fuel Vehicles will only be worthwhile if we have blender pumps where people can access flex fuel. Growth Energy, the coalition of U.S. ethanol supporters, has introduced the Fueling Freedom Plan which will redirect ethanol tax credits toward the build out of distribution infrastructure including Blender Pumps.

    Growth Energy’s Fueling Freedom plan would build out the infrastructure in the United States to create a path that leads to a genuinely free market – an open market free of government supports where ethanol can compete with oil. Redirecting monies currently paid to oil companies to blend ethanol into gasoline toward infrastructure improvements would enable consumers to choose between gasoline and renewable, homegrown ethanol.

    To learn more about the plan visit

  • TD

    Ethanol is all about farm subsidies for corn farmers. Eliminate the farm subsidies and ethanol would disappear as a fuel in the US.

  • Mr.Bear

    E85 will never die. ADM won’t let it.

    In a practical sense, E85 and hybrids are incompatible technologies. Ethanol gives you significantly worse mileage. Most hybrid drivers would go elsewhere given the choice.

  • Samie

    Yes Mr. Bear, ethanol is mandated and consumers in some states have no options/choice in how much ethanol is pumped into their tanks. Lets say hypothetically, that the government mandated at least 20 percent of all vehicles sold by 2020, over 35k would be required to be a plug-in hybrid or pure EV. Would some of the same ethanol advocates be crying foul over such use of regulations? Of course! The ethanol industry can not sustain itself including the lack of private investments, so lets end this government handout, let consumers choice if they want gasoline with or without ethanol and we should all start thinking beyond short-term fuel schemes like ethanol/E85 that get us nowhere.

  • Max Reid

    Both GM and Ford are going to sell 1/2 their vehicles as Flexfuels by 2012. Chrysler, Benz, Nissan, Toyota are joining in.

    As the price of Ethanol goes below that of gas, more people could start buying Flexfuels.

    Already 84% of the gas sold are E10, its time to start moving onto E85.

    Just now, we saw the ugly face of Oil in the Gulf of Mexico.

  • Shines

    I think most Americans can see the feeble attempt by government to create an ethanol market.
    Subsidize the farmers to grow extra corn or switchgrass.
    Subsidize the ethanol plants to create the ethanol (and now that the plants exist they still aren’t profitable).
    Subsidize the auto manufactureres to produce vehicles that can handle the ethanol.
    And in the end you have a fuel that is less efficient and would account for less than 5% of annual use.
    Enough is enough…

  • Max Reid

    As per World Bank estimate, 85% of the worlds energy subsidies goes to the fossil fuels and the share of fossil fuels in the energy mix is 85%.

    So Oil also gets its share of subsidies. Why do you think that gas costs only$3 in USA while in an exporting country like Canada it costs $4.

    Reason : Uncle Sam subsidizes Oil.
    Soon the cost of Ethanol will go down when they complete their 4 billion $ pipeline and when the cellulose ethanol plants reach mass production.

    Just like Wind & Solar power installation have overtaken Coal & Gas fired power plant installation in US & EU, soon the Ethanol will overtake gas.

    Wait for that day.

  • Max Reid

    Read these news guys

    Sunoco an Oil company is opening a huge Ethanol plant.
    Automakers are rolling out more Flexfuel vehicles.
    Cellulose Ethanol plant using waste steam from a nearby coal plant is coming up in Denmark.

  • Shines

    Just because plants than can produce ethanol are created doesn’t mean that they will be able to produce a viable quantity to offset the cost of producing the plant. I predict the ethanol news articles in about a year or two will be about trying to find enough bio mass (switchgrass, woodchips or whatever) to “feed” these plants so that they can produce. And that there isn’t going to be enough biomass to be viable.

  • sculptor

    It’s corn based ethanol that was the mistake. E85 vechiles just piggybacked on it and now they will pay for it.

  • Dan Levinstine

    bush is a dumbfuk
    electric cars are the way to go.

    damn u stupid neocons for destroying this country with your greed!!! may GOD punish you

  • houghton

    Throwing 700 or 800 billion per year onto the sands of saudi arabia, iran, venezuela, iraq is lunacy. It helps our enemies. Don’t you get it? Yes, it is messy transitioning from fossil fuels but we have to because it is in our national interest to do so. Support our farmers and ag businesses. Stop the tax credits and supports for oil and transfer it to cellulosic biofuels including ethanol and biodiesel. Ethanol from corn is a bridge only to get us to a better place.

  • Anonymous

    Some of you commentors could use a little education on this topic… the government has been paying farmers to grow NOTHING for generations, now if they want to pay the same money to have farmers actually grow something (corn) then that sounds a lot better to me, and if we can spend our money doing business with American farmers for fuel rather than middle east countries, that sounds better to me also. If you would do some research on the subject you’ll see that people used corn to heat homes during the great depression, so corn has been used for alternative fuel source since before we were born. Today the biggest problem is that they are using ethanol in an engine designed for gasoline, and wasting much of ethanols potential.