New 'green' fuel introduced in Estonia

  • 1999-10-07
  • By Brooke Donald
TALLINN - A leading fuel retailer introduced an ethanol-blended
gasoline to the Estonian market last week, emphasizing the mixture's
lower costs and lower impact on the environment than conventional

In recent weeks, consumers have seen the price of gasoline steadily
rise at the pumps here, climbing to over eight kroons ($0,53) per
liter for the popular 95 octane gasoline.

The producers of the new gasoline, which carries a 96.5 octane, hope
drivers will see the product as an economical alternative, as it
costs 30 cents less than ordinary fuel.

The project was spearheaded by Estonian spirits producer Remedia,
which began working with a Canadian university at the end of last
year to find alternative uses for ethyl alcohol, said Indrek Kirss,
chairman of Remedia.

In the spring, Alexela Oil, which operates several gasoline stations
throughout Estonia, came on board with Remedia to develop and sell
the new gasoline that contains 8 percent ethanol, a plant-based
alcohol usually made from corn or other biodegradable materials.

The new fuel, the first of its kind to be on sale in Estonia, has
been used since the 1970s in the United States and Canada, where
research has shown a reduction of up to 30 percent in carbon monoxide
emissions from cars when the blended gas is used.

Another benefit of using ethanol-blended gasoline, or "oxygenated"
gasoline, is its contribution to reducing emissions of so-called
greenhouse gases. Ethanol is a cleaner high octane alternative to the
traditional additives used to raise octane levels of gasoline, such
as benzene and manganese.

Ethanol supporters argue that the alcohol also helps clean a car's
fuel injection system and because it runs cooler than conventional
gasoline, it is safer for a vehicle's engine.

Despite ethanol's benefits, Kirss admitted to the potential problems
older vehicles may encounter when using the blended gasoline. Ethanol
can loosen contaminants and residues deposited by previous gasoline
fills causing them to collect in the car's fuel filter.

Epp Kiviaed, Statoil Estonia's director general, said the negative
effect ethanol can have on automobiles is one reason why Statoil has
not introduced its own ethanol-blended gasoline. But, she said,
laboratory tests are being undertaken in Scandinavia (where Statoil
is based) and a similar product should reach the Estonian market in a
couple of years once the glitches are worked out.

According to the Canadian Renewable Fuels Association, cars built
after 1979 are fully compatible with up to 10 percent of the ethanol
mixture. And, since 1985, all ethanol blends have contained detergent
additives that are designed to prevent injector deposits.

The biggest obstacle to the new fuel's success is the levy of excise
taxes on alcohol. Kirss said the state will have to abolish the
excise tax before the project can move forward. Kiviaed agreed that
until the excise tax question is answered, "it is not a financially
good business."

Kirss said Remedia has been in negotiations with the government and
lobbied against the excise tax. He said, "the government supports
[our] business plan."

Kirss added that in the future, once the companies have determined
there is a market for the 'greener' petrol, Remedia and Alexela are
prepared to invest 30 million kroons in a modern distillery. For the
test batch of fuel on sale now, the companies used an Estonian
distillery constructed during Soviet times.