E85 Growth Depends on Multiple Factors

ALEXANDRIA, Va. — The market for E85 will only grow if its price remains significantly below that of traditional petroleum, and the automobile industry continues to produce flex-fuel vehicles at historic rates, according to a report by the Fuels Institute.

Depending on several scenarios, sales of E85 — a blend of 85-percent ethanol and 15-percent gasoline — will at a minimum double by 2023, and could even experience a 20-fold increase during the same timeframe, revealed the report, entitled "E85: A Market Performance Analysis."

The growth of E85 will be dependent upon several things, including the number of fueling stations offering the alternative fuel and the number of flex-fuel vehicles on the road, the report stated. The Fuels Institute sees room for considerable growth on both fronts.

Only 2 percent of all gas stations offer E85 and 60 percent of these are located in just 10 states. The report found there are 5,289 flex-fuel vehicles per E85 station, compared to just 1,466 light-duty vehicles per retail station.

Flex-fuel vehicles currently represent 6 percent of all light-duty vehicle registrations in the United States.

"Increasing the E85 station count would improve the potential for additional E85 sales and introduce additional competition to the market. But several other factors also will determine the potential E85 market, particularly the relative price of E85 compared to unleaded gasoline and the number of vehicles on the road that can operate on E85," said Fuels Institute Executive Director John Eichberger.

The Fuels Institute, founded by NACS in 2013, is a nonprofit research-oriented think tank dedicated to evaluating market issues related to vehicles and the fuels that power them. Alexandria-based NACS, the Association for Convenience & Fuel Retailing, has 2,100 retail and 1,600 supplier member companies.

The full "E85: A Market Performance Analysis" report is available for download at www.fuelsinstitute.org.