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Economics of Blending 10 Percent Corn Ethanol into Gasoline
Citation:
Economics of Blending 10 Percent Corn Ethanol into Gasoline. U.S. Environmental Protection Agency, Washington, D.C.
Impact/Purpose:
This study conducts a detailed evaluation of ethanol’s blending cost into E10 gasoline, including octane and volatility costs, production cost and spot prices, distribution costs, and federal and state subsidies, while omitting RIN values, to assess whether ethanol would have been economical to blend into gasoline regardless of the RFS program. Based on this analysis, economic factors alone were sufficient to cause the observed growth in ethanol use.
Description:
The increase in ethanol blended into U.S. gasoline is often attributed to the Renewable Fuels Program (RFS), however, other factors such as rising gasoline prices and the phase-out of MTBE were also factors driving ethanol demand at the same time that the RFS program was being implemented.