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2016 is showdown time for ethanol

Automotive News reports on the phase-out of CAFE credits for ethanol and how that will affect the fuel source.

Is ethanol for real as an automotive fuel? Or is it just a mirage propped up by the federal fuel economy credits that automakers get by building vehicles that can burn the stuff?

That issue will play out after 2016, as CAFE credits for ethanol phase out, says Mike Omotoso, an analyst at J.D. Power and Associates.

Speaking last week at a conference of the University of Michigan Transportation Research Institute, Omotoso said he expects production of so-called flex-fuel vehicles--capable of using either gasoline or E85 ethanol--to dwindle.

CAFE credits for flex-fuel vehicles will be allowed up to the 2015 model year, said Omotoso. After that, credits will be given only if a vehicle manufacturer can demonstrate that E85 is actually being used in the vehicles--a difficult task, one would guess.

But Gary Smyth, General Motors' director of North American Science Labs, said ethanol has excellent combustion properties and can be produced domestically in quantity.

Generally, Smyth said, biofuels will be an important part of the future fuel mix, regardless of CAFE rules. "I believe it has huge potential beyond the credits for E85," he said.

CAFE credits aside, automakers like E85--85 percent ethanol, 15 percent gasoline--because it works with current powertrains. But Smyth acknowledged the problem with E85: Only about 2,500 stations around the country sell it, and they are mostly in the Midwest. As a result, few flex-fuel vehicles are actually powered by ethanol.

(Source: Automotive News)