FAQs on ethanol

30 Oct 2004

How is fuel ethanol mixed in petrol?
Ethanol could be blended in various proportions in petrol. Ethanol is usually added 5 to 10 per cent by volume of petrol for such application. In Brazil, ethanol is added 24 per cent by volume in gasoline (petrol) while in India we add 5 per cent.

Will it cost more?
Since anti-knocking agents like tetraethyl lead or MTBE are not used when fuel ethanol is added in Petrol. This will definitely be comparable to MTBE and other anti-knocking agents. At the present price of crude oil, ethanol is certainly an attractive proposition.

Will I have to change the engine of my car?
Many states in the US have been using 10 per cent ethanol blend in gasoline (petrol) for use in their cars. Brazil has been using up to 24 per cent ethanol in petrol. Engines of cars do not need any change to use petrol with up to 24 per cent ethanol in it.

Can the engine of my vehicle get damaged?
Ethanol has, apart from carbon and hydrogen, oxygen in it. This oxygen acts as oxygenating agent during combustion in the IC engine of petrol cars, two-wheelers and three wheelers thus preventing formation of carbon monoxide. Gasoline with ethanol as anti-knocking agent will not cause any damage to the engine.

Can it be used in two-wheelers / three-wheelers without any change in vehicles?
Yes, of course you can use fuel ethanol blended petrol in Two-Wheelers/Three-Wheelers as a normal fuel without changing the engine.

Where will it be made available?
The oil companies will blend the petrol/gasoline with fuel ethanol at the depots and this blended fuel will be made available through petrol/gas stations.

Can fuel ethanol be used as potable liquor? How to prevent the use of fuel ethanol for potable purpose?
Fuel ethanol is the purest form of ethanol (with lowest water content) and it can be used for blending potable liquor.

In order to make fuel-ethanol unsuitable to drink (before blending), it is denatured by adding another substance. Approved denaturant for fuel-ethanol is unleaded petrol at a minimum concentration of 2 per cent by volume of ethanol. Usually, such denaturants are added up to 5 per cent by volume of ethanol.

Can it be added in diesel?
Ethanol is also added to diesel. Usually, 3 per cent by volume is added. Tests have been conducted satisfactorily with up to 10 per cent by volume addition.

Which are the other countries which have promoted fuel ethanol?
Many states in the US have been using 10 per cent ethanol blend in gasoline (petrol) for use in their cars. Brazil has been using up to 24 per cent ethanol in petrol. Engines of cars do not need any change to use petrol with up to 24 per cent ethanol in it.

Fuel ethanol programmes have now been mandated in India, China, Colombia and initiated in countries like Japan, Thailand, Australia, EU countries, etc.

What is the experience in countries which have promoted fuel ethanol?
Reduced oil imports, improved trade balance, reduced reliance on imported oil, increased ethanol production, more cane price to farmers, direct and indirect job opportunities, saving fossil fuels are some of the experiences.

Who can bring in fuel ethanol?

Various agencies would be involved to bring in fuel-ethanol into use as additive to petrol / gasoline in India.
The oil companies producing and distributing petrol would have to formulate blends using fuel-ethanol as oxygenate and anti-knocking agent.
The government and its concerned departments like petroleum, environment, finance, agriculture, industry would have to encourage use of fuel-ethanol in petrol.
The state excise and prohibition department, the co-operatives and sugar ministry and the pollution control boards of the state governments would have to encourage replacement of 'lead' in petrol.
The automobile manufacturing companies would have to specify ethanol containing petrol as preferred fuel for the cars manufactured by them.
The ethanol manufacturing companies would have to inform availability of ethanol for the purpose of blending into petrol.
Various associations of manufacturing companies would have to ensure that ethanol is available adequately for the purpose of blending into petrol.
Companies engineering and manufacturing plant and machinery for producing anhydrous alcohol would have to ensure that fuel-ethanol of required quality and specifications could be manufactured in those plants.

Timelines in Ethanol

Year	Event
1826	Samuel Morey developed an engine that ran on ethanol and turpentine.
1860	German engine inventor Nicholas Otto used ethanol as the fuel in one of his engines. Otto is best known for his development of a modern internal combustion engine (the Otto Cycle) in 1876.
1862	The union congress put a $2 per gallon excise tax on ethanol to help pay for the Civil War. Prior to the Civil War, ethanol was a major illuminating oil in the United States. After the tax was imposed, ethanol cost too much to be used this way.
1896	Henry Ford built his first automobile, the quadricycle, to run on pure ethanol.
1906	Over 50 years after imposing the tax on ethanol, Congress removed it, making ethanol an alternative to gasoline as a motor fuel.
1908	Henry Ford produced the Model T. As a flexible fuel vehicle, it could run on ethanol, gasoline, or a combination of the two.
1917 - 1918	The need for fuel during World War I drove up ethanol demand to 50-60 million gallons per year.
1920's	Gasoline became the motor fuel of choice. Standard Oil began adding ethanol to gasoline to increase octane and reduce engine knocking.
1930's	Fuel ethanol gained a market in the Midwest. Over 2,000 gasoline stations in the Midwest sold gasohol, which was gasoline blended with between 6 per cent and 12 per cent ethanol.
1941-1945	Ethanol production for fuel use increased, due to a massive wartime increase in demand for fuel, but most of the increased demand for ethanol was for non-fuel wartime uses.
1945-1978	Once World War II ended, with reduced need for war materials and with the low price of fuel, ethanol use as a fuel was drastically reduced. From the late 1940's until the late 1970's, virtually no commercial fuel ethanol was available anywhere in the U.S.
1974	The first of many legislative actions to promote ethanol as a fuel, the 'solar energy research, development, and demonstration act' led to research and development of the conversion of cellulose and other organic materials (including wastes) into useful energy or fuels. To this day, ther is still not a commercial plant using cellulose as the feedstock.
	U S begins to phase out lead in gasoline. Ethanol becomes more attractive as a possible octane booster for gasoline. The 'environmental protection agency' (EPA) issued the initial regulations requiring reduced levels of lead in gasoline in early 1973. By 1986 no lead was to be allowed in motor
	The first time gasohol was defined, it was in the 'energy tax act' of 1978. Gasohol was defined as a blend of gasoline with at least 10 per cent alcohol by volume, excluding alcohol made from petroleum, natural gas or coal. For this reason, all ethanol to be blended into gasoline is produced from renewable biomass feedstocks. The federal excise tax on gasoline at the time was 4 cents per gallon. This law amounted to a 40 cents per gallon subsidy for every gallon of ethanol blended into gasoline.
	Marketing of commercial alcohol-blended fuels began. Amoco Oil Company began marketing commercial alcohol-blended fuels, followed by Ashland, Chevron, Beacon, and Texaco. About $1,000,000,000 ($1 billion) eventually went to biomass related projects from the Interior and Related Agencies Appropriation Act.
1980 - 1984	1980 - First U S survey of ethanol production was conducted. The survey found fewer than 10 ethanol facilities existed, producing approximately 50 million gallons of ethanol per year. This was a major increase from the late 1950s until the late 1970s, when virtually no fuel ethanol was commercially available. Congress enacted a series of tax benefits to ethanol producers and blenders. These benefits encouraged the growth of ethanol production. 1980 - The 'energy security act' offered insured loans for small ethanol producers (less than 1 million gallons per year), up to $1 million in loan guarantees per project that could cover up to 90 percent of construction costs on an ethanol plant, price guarantees for biomass energy projects, and purchase agreements for biomass energy used by federal agencies. 1980 - Congress placed an import fee (tariff) on foreign-produced ethanol. Previously, foreign producers, such as Brazil, were able to ship less expensive ethanol into the United States. 1980 - The 'gasohol competition act' banned retaliation against ethanol resellers. 1980 - The 'crude windfall tax act' extended the ethanol-gasoline blend tax credit.
1983	The 'surface transportation assistance act' increased the ethanol subsidy to 50 cents per gallon.
1984	The number of ethanol plants in the U S peaked at 163. The 'tax reform act' increased the ethanol subsidy to 60 cents per gallon.
1985	Many ethanol producers went out of business, despite the subsidies. Only 74 of the 163 commercial ethanol plants (45 per cent) remained operating by the end of 1985, producing 595 million gallons of ethanol for the year. One reason for producers going out of business was the very low price producers could receive for their ethanol (even with a subsidy of 60 cents per gallon), since the prices of crude oil and gasoline were so low. Despite the very low price of corn, which is the main driver of the cost of producing ethanol, nothing was enough to prevent the high rate of market change.
1988	Ethanol was first used as an oxygenate in gasoline. Denver, Colorado mandated oxygenated fuels (i.e., fuels containing oxygen) for winter use to control carbon monoxide emissions. Other oxygenates added to gasoline included MTBE (methyl tertiary butyl ether - made from natural gas and petroleum) and ETBE (ethyl tertiary butyl ether - made from ethanol and petroleum). MTBE dominated the market for oxygenates.
1990	Omnibus budget reconciliation act' decreased the ethanol subsidy to 54 cents per gallon of ethanol Ethanol plants began switching from coal to natural gas for power generation and adopting other cost-reducing technologies. An expanding market and the high cost of fructose corn syrup encouraged expansion of wet mill plants that produce the syrup as a by-product of the ethanol production process.
1992	The 'energy policy act' of 1992 (EPACT) provided for two additional gasoline blends (7.7 per cent and 5.7 per cent ethanol). EPACT also defined ethanol blends with at least 85 per cent ethanol as "alternative transportation fuels." It also required specified car fleets to begin purchasing alternative fuel vehicles, such as vehicles capable of operating on E-85 (a blend of 85 per cent ethanol and 15 per cent gasoline). The EPACT also provided tax deductions for purchasing (or converting) a vehicle to that could use an alternative fuel such as E-85 and for installing equipment to dispense alternative fuels. The 'clean air act' amendments mandated the winter-time use of oxygenated fuels in 39 major carbon monoxide non attainment areas (areas where EPA emissions standards for carbon mioxide had not been met) and required year-round use of oxygenates in 9 severe ozone non attainment areas in 1995. MTBE was still the primary oxygenate used in the U.S.
1995	The excise tax exemption and income tax credits were extended to ethanol blenders producing ETBE. The EPA began requiring the use of reformulated gasoline year round in metropolitan areas with the most smog.
1995 - 1996	With a poor corn crop and the doubling of corn prices in the mid-1990s to $5 a bushel, some states passed subsidies to keep the ethanol industry solvent.
1997	Major U S auto manufacturers began mass production of flexible-fueled vehicle models capable of operating on E-85, gasoline, or both. Depsite their ability to use E-85, most of these vehicles used gasoline as their only fuel because of the scarcity of E-85 stations.
1998	The ethanol subsidy is extended through 2007 but will be gradually reduced. The ethanol subsidy of 54 cents per gallon will be reduced gradually to 51 cents per gallon in 2005.
1999	Some States began to pass bans on MTBE use in motor gasoline because traces of it were showing up in drinking water sources, presumably from leaking gasoline storage tanks. Because ethanol and ETBE are the main alternatives to MTBE as an oxygenate in gasoline, these bans will increase the need for ethanol as they go into effect.
2000	EPA recommended that MTBE should be phased out nationally.
2001	A 1998 law reduced the ethanol subsidy to 53 cents per gallon starting January 1, 2001.
2002	U.S. automakers continued to produce large numbers of E-85-capable vehicles to meet federal regulations that require a certain percentage of fleet vehciles to be capable of running on alternative fuels. Over 3 million of these vehicles were in use. At the same time, several States were encouraging fueling stations to sell E-85. With only 169 stations in the U.S. selling E-85, most E-85 capable vehicles are still operating on gasoline instead of E-85.
2003	A 1998 law reduced the ethanol subsidy to 52 cents per gallon starting January 1, 2003. Blending of 5 per cent ethanol in petrol mandated in India and 10 per cent in Colombia. As of October 2003, a total of 18 States had passed legislation that will ban MTBE - but none of the states that are major users of MTBE, such as CA, CT, KY, MO and NY have their ban in effect yet. California began switching from MTBE to ethanol to make reformulated gasoline, resulting in a significant increase in ethanol demand by mid-year, even though the California MTBE ban does not go into effect until January 1, 2004. New York and Connecticut are planning for increased ethanol use in late 2003 becuase MTBE bans in their states will also take effect on January 1, 2004.