Ethanol is an alcohol-based alternative fuel produced by fermenting and distilling starch crops that have been converted into simple sugars. Feedstocks for this fuel include corn, barley, and wheat. Ethanol can also be produced from "cellulosic biomass" such as trees and grasses and is called bioethanol. Ethanol is most commonly used to increase octane and improve the emissions quality of gasoline. In some areas of the United States, ethanol is blended with gasoline to form an E10 blend (10% ethanol and 90% gasoline), but it can be used in higher concentrations such as E85 or E95. Original equipment manufacturers produce flexible-fuel vehicles that can run on E85 or any other combination of ethanol and gasoline.

In the United States, one out of every eight gallons of gasoline sold contains ethanol. Most of this ethanol is purchased as blends of 10% ethanol and 90% gasoline, known as E10, and is used as an octane enhancer to improve air quality.
If you are driving a flexible fuel vehicle, you may be using E85, a blend of 85% ethanol and 15% gasoline. Ethanol is a colorless liquid that is distilled from agricultural crops-usually corn. Most ethanol is produced in the grain-growing states of the midwestern United States. The U.S. Department of Energy is also exploring ways to make ethanol from crop wastes like corn stalks and corn husks.
The Clean Air Act Amendments of 1990 mandated the use of oxygenated gasoline in areas with unhealthy levels of carbon monoxide. At the time, the primary oxygenates were ethanol and MTBE. Subsequently, MTBE has been shown to contaminate ground water supplies, and the demand for ethanol has increased significantly.

All auto manufacturers approve the use of low-level ethanol blends. Fuel ethanol blends are successfully used in all types of vehicles and engines that require gasoline. Approval of ethanol blends is found in the owners' manuals under references to refueling or gasoline.

Fuel ethanol blends are sold in every state, and ethanol blends make up nearly 100% of the gasoline sold in carbon monoxide and ozone nonattainment areas during certain months of the year.

Although ethanol is more expensive to produce than gasoline, federal tax incentives reduce the price to a competitive level.