How Much Does It Cost to Use Ethanol?

Workers Transferring Ethanol From Rail to Truck
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Ethanol is a widely available alternative fuel that can be used in many vehicles that are already on the road, but is it cost-effective to use ethanol or an ethanol/gasoline blend in place of unblended gasoline?

A gallon of E85, a blend of 85 percent ethanol and 15 percent gasoline, usually costs a few cents more on average than a gallon of regular gasoline, although prices may vary somewhat depending on location. According to the U.S. Department of Energy, the difference between the two has narrowed since 2014, with a 33 cents per gallon premium for E85 in July 2016.

Comparable Cost per Gallon, but Less Fuel Economy

A gallon of ethanol contains less energy than a gallon of gasoline, however, so you may get lower mileage with ethanol and be required to fill your tank more often, which would increase your fuel costs. A 10% ethanol blend leads to a 3 to 4% decrease in fuel economy, and a 15% ethanol blend reduces miles per gallon by about 4 to 5%, according to the Department of Energy. E85 will cost you 15 to 27% in fuel economy.

For more current information about the cost of ethanol and other alternative fuels, download the most recent Alternative Fuel Price Report from the U.S. Department of Energy.

Vehicles That Use Ethanol Cost No More Than Others

Vehicles that can use E85 are widely available in many models—sedans, minivans, SUVs, pickups and light trucks—and usually cost about the same as vehicles that run exclusively on gasoline. The U.S. Department of Energy provides an online Flexible Fuel Vehicle Cost Calculator that makes it easy to determine the costs and benefits of using E85 in a flexible fuel vehicle where you live.

Hidden Costs of Fuel Ethanol?

Some of the costs of ethanol blends are not visible at the pump:

  • The high demand for ethanol has increased the price paid for corn. Meat producers rely on corn as an important feed ingredient, and the higher cost has been reflected in meat prices experienced by costumers.
  • There are complex interactions between pressure to grow corn when prices are high and the resulting reduced availability of acreage for other crops. Less land available to grow food (grains, vegetables) has lead to increased food prices. 
  • Ethanol blended fuels create issues for small motors on lawnmowers, trimmers, chainsaws, and other gas power tools. Ethanol can attract moisture and lead to corrosion issues in the delicate parts of the system, most notably the carburetor. Additionally, ethanol-blended fuel is more prone to separating, producing byproducts damaging to the motor. The problem worsens for those pieces of equipment that are only used seasonally, as they sit idle with fuel in the tank and in the carburetor for extended periods of time.