Iowa drivers are buying 85 percent ethanol for their flex fuel vehicles.

According to the Iowa Renewable Fuels Association (IRFA), E85 sales in Iowa increased by 27 percent during the first quarter of 2011 compared to the fourth quarter of 2010. The Iowa Department of Revenue reports that sales of E85 by Iowa retailers reached 2,645,038 gallons during the first three months of this year. Compared to the first quarter of 2010, E85 sales were up 64 percent in 2011.

“Consumers have increasingly sought out E85 as an affordable, homegrown alternative with gasoline prices approaching $4 per gallon,” stated IRFA Executive Director Monte Shaw. “It was especially exciting to see E85 sales increase robustly even as the Iowa E85 retailer tax credit was cut by half on the first of January.”

Since January 1, 2006, Iowa retailers have received a tax credit for each gallon of E85 sold. Under the 2006 law, the E85 tax credit was reduced from 20 cents per gallon to 10 cents per gallon on January 1, 2011. Iowa currently has 142 retail outlets offering E85 and is the leading state in renewable fuels production, with 41 ethanol refineries capable of producing nearly 3.7 billion gallons annually and 12 biodiesel facilities with the capacity to produce 315 million gallons annually.