Exploring the drivers' side of the “blend wall”: U.S. consumer preferences for ethanol blend fuels

• U.S. consumers are not fully aware of commercial availability of ethanol blend fuels.
• A fifth of respondents expressed unwillingness to purchase ethanol blend fuels.
• At price equivalence the average U.S. consumer would prefer ethanol blend fuels.
• Commercial use of E20 can ameliorate regulatory wall to ethanol blend fuels.

Analysis of stated preferences from over 2300 U.S. respondents shows that general attitudes nationwide favor the use of ethanol as a motor fuel but a sizeable segment (~ 20%) indicated strong unwillingness to buy ethanol blend fuels. Results from a discrete choice experiment analyzed using mixed logit regressions show that, all else constant, price-per-gallon and miles-per-gallon dominated preferences for fuel attributes but ethanol content made the average consumer more likely to choose a blend fuel. Findings provide strong evidence of heterogeneity in preferences driven by attitudes but also affected by age and income. At a point of price per mile equivalence for ethanol and gasoline, in a market where gasoline, E20 and E85 were available with no regulatory, supply or technological constraints, E85 would dominate market share. In this case ethanol would account for 56% of volume of motor fuels consumed. Our results show a high level of consumer substitutability of gasoline with ethanol and willingness to choose high ethanol blend fuels – which could help expand ethanol use beyond the current regulatory and technological limits of the blend wall.