Approach to Ethanol Market Penetration Costs

Fuel mixes with ethanol content higher than 10 % might face constraints because of fuel market infrastructure with more flex-fuel vehicles being needed and distribution networks adjusted (Szulczyk et al. 2010). Based on data and projections made by the Energy Information Agency (EIA) in the 2009, Annual Energy Outlook (The U. S. Department of Energy 2009) future penetration costs of E85 are estimated. Calculations reflect the EIA projected increasing differ­ence between price of wholesale ethanol and gasoline as penetration increases (as discussed Beach et al. 2010). Table 3 presents estimation of market penetra­tion costs for ethanol. These costs are additional costs of infrastructure modi­fication, adding to feedstock costs, transportation costs, and processing costs incurred in refineries.