E85, 85% ethanol on gasoline, is to become competitive with conventional gasoline in some parts of the U.S., according to U.S. analysts. There is the fear that an increased demand for ethanol could sharpen the differences between the government and U.S. refineries, complaining of the hardness of biofuels policy.
But if both the refinery and the government to reach an agreement that satisfies both parties, the contract may reignite stagnant production in some producer groups, such as Archer Daniels Midland, Koch Industries and Louis Dreyfus Commodities.
Some factors, however, may favor the E85 regardless of policy change of renewable fuels or even if an agreement between the parties happen. Is expected a record corn crop in the U.S. next year, there will consequently price decrease of a gallon of ethanol in 2014. In addition, government incentives to the mix, and the volatility of the RINs price are among the factors behind the improved outlook to E85