GM, Kroger, Enterprise, VeraSun Energy Building E85 Value Chain

Contract between ethanol producer and supermarket retailer expands E85's reach into rental car market for flex-fuel vehicles

Ethanol producer VeraSun Energy Corporation recently announced the opening of 20 E85 fueling locations at Kroger stores, making Kroger the first national retailer to offer VeraSun's branded E85, a blend of 85% ethanol and 15% gasoline, for Flexible Fuel Vehicles (FFVs). VeraSun now has more than 100 retail fueling stations in 11 states and the District of Columbia selling E85.

If the partnership moves forward, it could mean big numbers for VeraSun and a big boost to the flex-fuel distribution network in the mainland U.S. Kroger currently operates almost 2,500 supermarkets and supercenters in 31 states. The company also has more than 750 convenience stores and 650 supermarket fuel centers. Currently, Kroger has 40 locations offering E85 in the states of Texas, Ohio and Kentucky.

As a result of the VeraSun and Kroger partnership, fleet owner/operator Enterprise Rent-A-Car has plans to designate certain rental locations as E85 branches. According to General Motors (GM) executives, at least one quarter of the rental fleet in these new locations will be GM FlexFuel Vehicles.

E85 is a high-octane, cleaner-burning fuel, with an octane rating of 100 or greater and the highest oxygen content of any fuel available today. The Argonne National Laboratory reported that the use of 4.9 billion gallons of ethanol in the United States during 2006 resulted in the reduction of greenhouse gas emissions by approximately eight million tons, while the use of E85 alone contributes to a 20% reduction in ozone-forming pollution and a 30% reduction in greenhouse gas emissions.

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