Fuel retailers have many choices today, from the brand of coffee to offer inside the station to what fuels to offer under the canopy. Offering E85 is one such option and provides consumers with another fuel choice at the pump.
While E85 has been in the marketplace for nearly three decades, this fuel has rarely gotten the attention it deserves. E85 (85% ethanol and 15% gasoline) is ~98 octane and reduces emissions more than 30% over straight gasoline. E85 is also defined as an alternative fuel and is required for use by some fleets.
E85 can only be used in flex-fuel vehicles (FFVs), which are capable of operating on E85, straight gasoline, or any combination of the two. There are now more than 24 million FFVs on the road, or roughly 8% of all vehicles, representing more vehicles than require premium today. There are over 4,700 retail stations offering E85 today in the United States.
E85 does require different equipment than regular gasoline. This equipment can have an additional cost above the gasoline-only version, dependent upon the component. A retailer can choose a conversion kit for existing equipment or purchase new component parts from tank to nozzle. E85 can easily be incorporated into multiproduct dispensers, eliminating the need for stand-alone equipment. Introducing E85 can also offer additional opportunities to provide other midlevel blends.
There is a federal tax credit for fuel retailers to offer E85. This credit is available for tax years 2018, 2019 and 2020. Click here for more information. USDA’s Higher Blends Infrastructure Incentive Program (HBIIP) is offering $100 million to retailers to expand the availability and sale of higher ethanol blends such as E15 and E85.