E85 – a little backstory

As I’m writing this, I’ve just noted a comment from Mats in Sweden: Swedish newspapers are reporting today that Saab will indeed go all Biopower, i.e. all cars in the range. I’m not sure whether that’s as an option or as standard equipment and I’d assume that it’s for the Swedish market only.

The story is here (in Swedish) and I can see the date 2007 mentioned. I can also see “9-4x” and “etanolmotor” in the same sentence near the end of the article.

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Here’s something for those that are interested. It was emailed to me from Saab USA and is an interesting look at the E85 situation, both in the US and in Sweden.

It originally appeared in the Wall Street Journal, though that link is for subscribers and I ain’t one of them.

It makes for very interesting reading:

By Jenny Clevstrom
Oct. 3, 2006

The Swedish Government is promoting the use of vehicles that run on renewable fuels, sending sales of “clean” cars soaring. Alongside tax breaks and other financial incentives to encourage people to use environmentally friendly vehicles, Stockholm in April began to require many gas stations to sell renewable fuel.

Sweden’s approach is being held up as an example by car companies, such as General Motors Corp., that are trying to spur demand of their new clean-car models in Europe and the U.S. “Sweden is a terrific example of market pull,” said Carl-Peter Forster, president of General Motors Europe, during the Paris automobile show last week. “With its incentives, the Swedish government is creating demand.”



GM is particularly keen to see the U.S. government do more to promote ethanol, because the world’s No. 1 automaker by vehicles sold has a lead over its Japanese rivals when it comes to ethanol technology, in contrast to gas-electric hybrid technology, where Japan’s Toyota Motor Corp. has an edge.

The transformation that Sweden implemented quickly may be more difficult for the U.S. To begin with, so few U.S. gas stations sell ethanol that fuel gauges will read “empty” long before drivers can find an ethanol pump.

President Bush seeks to ease bottlenecks that are slowing the spread of the fuel in the market, he told The Wall Street Journal in an interview last week. The Bush administration has endorsed the use of ethanol and is increasing spending on ethanol research. The U.S. subsidizes ethanol blends and gives tax credits to gas stations that install ethanol pumps.

But without the U.S. taking the step of forcing gas stations to stock renewable fuel, oil companies have little incentive to promote a product that competes with gasoline. Renewable fuels are those that can be regenerated or replenished quickly.

“It drives us crazy,” General Motors Chief Executive Rick Wagoner told reporters during the Paris auto show. General Motors is selling increasing numbers of flexible-fuel cars, which can run on gasoline or E85 – a blend of 85 percent ethanol and 15 percent gasoline – in the U.S. Only 975 of 175,000 gas stations in the U.S. carry ethanol, Mr. Wagoner said. “If we had only ethanol cars [in the U.S. market], we wouldn’t sell a single one,” Mr. Wagoner said.

Of Sweden’s 4,000 gas stations, 500 stock a renewable fuel, a number expected to rise to 2,400 by 2009. GM executives have said they often bring up Sweden as an example of government policy that has helped spur demand for environmentally friendly cars. Brazil, where some 7 percent of all cars are flexi-fuel, according to Brazilian car makers’ association Anfavea, is another country to which car makers look.

Sweden is a particularly interesting case, they said, because the tax breaks and other incentives have borne results quickly. New registrations of clean cars in Sweden jumped nearly fivefold in July compared with a year earlier. This year, 21,000 new clean cars have been registered, about 13 percent of all new registrations. Flexible-fuel vehicles, including models such as Ford Focus Flexi-Fuel, Volvo FlexiFuel and Saab Biopower, are leading the sales of clean cars, a category that includes hybrids and vehicles running on biogas.

“Had it not been for those incentives, the market would not have taken off,” said Nils Lekeberg, marketing manager of Ford Sweden. Ford Motor Co. was the first car maker to launch a European-made flexible-fuel vehicle in Sweden in 2001. Today, half of Ford’s car sales in Sweden come from flexible-fuel vehicles.

The system does have its critics. Some say the focus on ethanol discriminates against low-carbon-dioxide-emitting diesels and thwarts the development of other technologies

“A technique-neutral regulatory system would tell [car makers]: How you solve this technique-wise is your call. We look at emissions,” said Mats-Ola Larsson, a traffic adviser for the city of Gothenburg.

Diesel fuel use has been penalized by Swedish tax regulators for years. A new tax this fall will be slightly more favorable, but use of diesel still is far higher in other European countries than in Sweden.

Some critics say car makers could be left in the lurch if Stockholm suddenly stops promoting ethanol use. Others warn that the global supply of ethanol is limited, so while there may be enough to keep Swedish drivers happy, conversion throughout Europe and the U.S. could prove problematic. Through the first eight months of the year, new passenger-car registrations – a proxy for new-car sales – reached 185,348 in Sweden, according to the European Automobile Manufacturers Association. In the U.S., about 1.5 million cars and light trucks were sold in August, according to Autodata Corp.

Sweden imports the bulk of its ethanol from Brazil. The government is stepping up efforts to develop domestic production of ethanol from cellulose from the thickly forested northern part of the country. Sweden’s interest in alternative fuels was, as for many countries, born from the oil crises in the 1970s. Brazil, in particular, started making ethanol from its sprawling sugar-cane fields.

Unlike Brazil, where oil prices remained the driver of ethanol use, Sweden embraced the environmental cause. In the 1990s, Swedish national- and local-government officials invested in research and launched campaigns to promote biofuels and electric vehicles.

A Sweden-based Ford salesman began importing flexible-fuel vehicles from the U.S. as a pilot program in the early 1990s, and Ford later joined forces with officials to lobby consumer groups about the benefits of ethanol use. In the mid-1990s, gas-station chain OK began to install ethanol tanks at service stations throughout Sweden.

Government incentives include a tax exemption for renewable fuels such as ethanol, biogas and biodiesel. Cities throughout Sweden offer free residential parking for clean vehicles. Employees who drive company cars that qualify as “clean” also get a reduction on their income tax.

Since 2003, the Swedish government has put $28 million a year into research and other programs aimed at renewable fuels, according to Sweden’s Ministry for Sustainable Development. The law requires gas stations that sell more than 3,000 cubic meters of gasoline or diesel fuel a year also to provide a renewable fuel such as ethanol or biogas. The cutoff will fall to 1,000 cubic meters in 2009.

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7 Comments

  1. As I understand the artikel on TTELA.se they say that on al models in the future there will be an BioPower engine as option. 9-5 already has BioPower so then there only is 9-3 to get it. 9-7 will probobly not get BioPower but the 9-4 that shall replace 9-7 will get BioPower as an option.

    My personal thoughts is that Saab should only have BioPower since they work just as well on regular gasoline.

  2. “With its incentives, the Swedish government is creating demand.”

    that’s the core of the whole biofuel argument, in my opinion. the Swedish government had the balls to say “this is what we want for our country long term. here’s the money and the legislation to make sure it happens” and guess what? the automakers came to the party and the consumers voted with their wallets. now, they have critical mass, biofuel is in the culture; their no imported oil by 2020 aim looks more than achieveable.

    government backing is what is holding back biofuel. the technologies are there to produce the fuels and the cars that run them, but without the incentives to drive the market from the off, the investment sector sees funding multi-million dollar production facilities and ongoing research as very risky. hence why E85 is still on the fringe in the US and isn’t even in the Australian vernacular.

    yes, governments need to put up some cash to get things going, but surely the benefits are obvious. Not just the ongoing environmental benefits and the voting public driving around with cheaper fuel (happy voters are incumbent voters, right?), but also the new industry it will create; new jobs, a new market for struggling farmers, new business opportunities for entrepernuers and investment… the list goes on. now surely that’s worth manadating the installation of few pumps and some rego/tax benefits to the consumer, yeah?

  3. A funny note from the Swedish article: Saab’s main export of 9-5 Biopower has been to Norway. 200 cars so far and Norway only has one gas station that sells ethanol!!! I guess that gas station got 200 loyal costumers! :)))

  4. Here in Spain, Saab Spain and Abengoa(on the most important producers of Bioetanol) do an agreement to promote the Bioetanol in Spain, and begin to sell the 9-5 biopower.

    greetings

  5. Good comments.

    One little geography snippet for you:

    Sweden:
    449,964 km²
    9,090,113 people

    US:
    9,631,420 km²
    299,902,694 people

    So. The US is over 20 times the size (land mass)and over 30 times the population of Sweden.

    You may think: Well, then, you’ve just got to do 20x or 30x the investment. Wrong.

    Our country is so vast that logistics take on a whole new meaning. For instance: How are people in New England going to get E85? Likely, it will be by truck. Do you know how much diesel is burned carrying E85 from Indiana or Ohio (agribusiness states closest to New England)? A LOT!!! The net result: no big gain in environmental impact.

    Additionally, in Sweden, the metro areas of Stockholm, Goteborg and Malmo comprise nearly half of the entire population of the country. Three metro areas to populate with E85 stations and you take care of half of the drivers. In the US, no single state has more than 11% of the total population — not even the states that are larger in land mass than the whole country of Sweden! Putting the E85 within reach of the people that would use it is a HUGE undertaking.

    Again, this is one of the many reasons that I think that E85 is a bad idea. It’s too expensive and will take too long to implement. I fear that by the time it would be up-and-running in the US that the technology would ahve been superceded by something better.

  6. Glad its drivin you crazy Rick…E85 aint the real deal. Its going to take a much bigger sell job to convince us dum motorists that 25% reduction in mileage, cold weather, reliability, and many other problems is the way to go.
    On the other hand ULSD/bioD with its proven distribution, 30%+ mileage gain and very few resolvable negatives needs more attention here in “diesel-challenged” NA.

  7. was hoping someone would mention bio-diesel. In combination with existing infrastructure & ethanol this could take us a long way. And yes, even in the US. Just needs a player big enough who works out a way to make money out of it.

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