Selling E85 fuel (“Flex Fuel”) can provide a competitive advantage to gasoline retailers struggling with decreasing margins in the gasoline market. E85 or FlexFuel can differentiate a station as green, innovative, and patriotic.
E85 projects can be profitable investments, but profitability depends on multiple factors and thus, increases the investment risk. The National Renewable Energy Laboratory developed a model to analyze these factors, and found that converting the mid-grade gasoline tank to hold E85 was the most profitable scenario. The model revealed that the throughput of E85 was the most important variable for profitability, followed by equipment costs, required return on investment, and annual maintenance and operation costs. A good benchmark for E85 throughput is 74,000 gallons per year. A checklist is provided to help retailers assess whether E85 is a profitable investment, including factors like local competition, access to low E85 costs, available tanks for conversion, and incentives for E85 infrastructure.
The top 10 facts, statistics and trends related to selling ethanol gasoline, including their source.”
Ethanol gasoline is a biofuel that is commonly blended with gasoline to reduce emissions and improve air quality.
In the US, the most common blend of ethanol gasoline is E10, which consists of 10% ethanol and 90% gasoline.
According to the US Energy Information Administration (EIA), in 2020, about 14.4 billion gallons of ethanol were blended with gasoline, making up about 7% of the total gasoline consumed in the US.
The Renewable Fuel Standard (RFS) requires that a certain volume of renewable fuels, including ethanol, be blended into the nation’s fuel supply.
The use of ethanol gasoline can lower tailpipe emissions of certain pollutants, such as carbon monoxide.
There is a growing demand for higher blends of ethanol gasoline, such as E15 and E85, which offer greater emissions reductions and performance benefits.
The use of ethanol gasoline can support US farmers by providing a market for their crops, such as corn.
Ethanol gasoline production has increased over the years, with the US becoming one of the largest producers of ethanol in the world.
Source: US Energy Information Administration, US Environmental Protection Agency, National Renewable Energy Laboratory, and various academic studies and reports.
Here’s a 10-point checklist for service stations that would like to sell ethanol gasoline:
Determine market demand: Research the local market to determine the demand for ethanol gasoline. Consider factors such as consumer preferences, fleet partnerships, and competition.
Source low-cost ethanol: Find a reliable supplier, like Protec Fuel, of low-cost ethanol gasoline to help ensure profitability. Consider factors such as transportation costs, storage requirements, and volume discounts.
Convert tanks to hold ethanol gasoline: Consider converting one or more of your service station’s tanks to hold ethanol gasoline. The National Renewable Energy Laboratory has developed a model to help determine the most profitable scenario for converting tanks.
Train employees: Train employees on the safe handling and dispensing of ethanol gasoline, as well as the benefits of ethanol gasoline and how to answer customer questions.
Obtain necessary permits and certifications: Obtain any necessary permits and certifications from local, state, and federal agencies to legally sell ethanol gasoline.
Partner with fleet customers: Partner with fleet customers, such as government agencies and local businesses, to increase the demand for ethanol gasoline.
Take advantage of incentives: Look for state and local incentives for selling ethanol gasoline, such as tax credits, grants, and loan programs.
Continuously monitor profitability: Continuously monitor the profitability of selling ethanol gasoline and make adjustments as needed, such as adjusting prices or changing suppliers.
