Ethanol
Engine fuel

The largest single use of ethanol is as an engine fuel and fuel additive. Brazil in particular relies heavily upon the use of ethanol as an engine fuel, due in part to its role as one of the world's leading producers of ethanol. Gasoline sold in Brazil contains at least 25% anhydrous ethanol. Hydrous ethanol (about 95% ethanol and 5% water) can be used as fuel in more than 90% of new gasoline-fueled cars sold in the country.

The US and many other countries primarily use E10 (10% ethanol, sometimes known as gasohol) and E85 (85% ethanol) ethanol/gasoline mixtures. Over time, it is believed that a material portion of the ≈ 150-billion-US-gallon (570,000,000 m) per year market for gasoline will begin to be replaced with fuel ethanol.

Australian law limits the use of pure ethanol from sugarcane waste to 10 % in automobiles. Older cars (and vintage cars designed to use a slower burning fuel) should have the engine valves upgraded or replaced.

According to an industry advocacy group, ethanol as a fuel reduces harmful tailpipe emissions of carbon monoxide, particulate matter, oxides of nitrogen, and other ozone-forming pollutants. Argonne National Laboratory analyzed greenhouse gas emissions of many different engine and fuel combinations, and found that biodiesel /petrodiesel blend (B20) showed a reduction of 8%, conventional E85 ethanol blend a reduction of 17% and cellulosic ethanol 64%, compared with pure gasoline. Ethanol has a much greater research octane number (RON) than gasoline, meaning it is less prone to pre-ignition, allowing for better ignition advance which means more torque, and efficiency in addition to the lower carbon emissions.

Ethanol combustion in an internal combustion engine yields many of the products of incomplete combustion produced by gasoline and significantly larger amounts of formaldehyde and related species such as acetaldehyde. This leads to a significantly larger photochemical reactivity and more ground level ozone. This data has been assembled into The Clean Fuels Report comparison of fuel emissions and show that ethanol exhaust generates 2.14 times as much ozone as gasoline exhaust. When this is added into the custom Localized Pollution Index of The Clean Fuels Report, the local pollution of ethanol (pollution that contributes to smog) is rated 1.7, where gasoline is 1.0 and higher numbers signify greater pollution. The California Air Resources Board formalized this issue in 2008 by recognizing control standards for formaldehydes as an emissions control group, much like the conventional NOx and reactive organic gases (ROGs).

More than 20% of Brazilian cars are able to use 100% ethanol as fuel, which includes ethanol-only engines and flex-fuel engines. Flex-fuel engines in Brazil are able to work with all ethanol, all gasoline or any mixture of both. In the United States, flex-fuel vehicles can run on 0% to 85% ethanol (15% gasoline) since higher ethanol blends are not yet allowed or efficient. Brazil supports this fleet of ethanol-burning automobiles with large national infrastructure that produces ethanol from domestically grown sugarcane.

Ethanol's high miscibility with water makes it unsuitable for shipping through modern pipelines like liquid hydrocarbons. Mechanics have seen increased cases of damage to small engines (in particular, the carburetor) and attribute the damage to the increased water retention by ethanol in fuel.
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