Flexible-fuel vehicles (FFVs) use a fuel mix of gasoline and ethanol or methanol, with ethanol being the most commercially viable of the two. It can be used in low-level blends, or in higher proportions like E85—an ethanol blend that contains anywhere from 51% to 83% ethanol depending on geography and season, according to the Alternative Fuels Data Center (AFDC).
FFVs are similar to conventional cars in terms of payload, acceleration, power, and maintenance. The major upside is that ethanol can help reduce dependence on imported oil and decrease greenhouse gas emissions.
Features of FFV
Source: US Department of Energy
“The carbon dioxide released when ethanol is burned is balanced by the carbon dioxide captured when the crops are grown to make ethanol. This differs from petroleum, which is made from plants that grew millions of years ago. On a life cycle analysis basis, corn-based ethanol production and use reduces greenhouse gas emissions (GHGs) by up to 52% compared to gasoline production and use. Cellulosic ethanol use could reduce GHGs by as much as 86%,” says the AFDC’s fact sheet on ethanol-based fuel.
But according to new research from Technavio, the global ethanol-based vehicle market is actually lagging behind other alternative fuel markets, growing at a cumulative average growth rate of just 6.53% from 2015 to 2020.
2015 saw the production of 5.31 million units, and this number is expected to reach 7.28 million units by 2020.
Technavio analysts say there are a few serious challenges for vendors to confront before ethanol-based vehicles can post more serious growth.
Fossil fuel subsidies
According to the International Energy Agency, fossil fuel consumption subsidies stood at $548 billion in 2013. This is four times higher than the subsidies offered to the renewable energy industry, which keeps petroleum solidly in the top spot in the fuel market.
Heavy capital requirements
Production costs of ethanol for use as an automotive fuel are much higher than petrol production costs, with high capital requirements for R&D, storage, and test facilities adding to expenses. To make matters worse, there are limited human resources that specialize in biofuels, making the cost of hiring skilled people for ethanol production facilities much higher
Lack of infrastructure and consumer awareness
There are still relatively few fuel dispensing stations for higher ethanol blends like E85.
On top of that, a lot of drivers aren’t even aware of ethanol-based fuel as an option, and the information that is available can be confusing. There is some concern that biofuels can clog filters and lead to expensive repairs. And while governments promote biofuel use to cut down on emissions, automakers and consumers alike are worried about the negative impact on engine efficiency and repair costs. This kind of mixed information is a big challenge to market growth.
Biodiesel dominating automotive fuels
The main challenge to the widespread adoption of ethanol-based FFVs is other biofuels, specifically biodiesel, as the latter yields higher energy output and doesn’t depend exclusively on plant-based feedstocks.
