Motorists' Willingness to Pay for E85 versus E10

Sebastien Pouliot () and Kenneth Liao

Center for Agricultural and Rural Development (CARD) Publications from Center for Agricultural and Rural Development (CARD) at Iowa State University

Abstract: In November 2016, the Environment Protection Agency (EPA) released the final rule for biofuel volumes under the Renewable Fuel Standard (RFS) for 2017. The total renewable fuel volume requirement for 2017 is 19.28 billion gallons, up from 18.11 billion gallons in 2016. Of the total renewable fuel volume, 15 billion gallons may be met with conventional biofuel, establishing the implied mandate for ethanol. This ethanol mandate was 14.5 billion gallons in 2016. Much has been written about the blend wall and how difficult it is for ethanol consumption to exceed the volume that can easily be blended in regular gasoline (E10), which contains no more than 10 percent ethanol. There are many ways to break the blend wall, but it appears that greater sales of gasoline blends that contain more than 10 percent ethanol will play a major role. In two recent studies, we examine the demand for E85, which contains between 70 and 75 percent ethanol.

Date: 2017-04
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