E85 is an alcohol fuel mixture that typically contains a mixture of up to 85% denatured fuel ethanol and gasoline or other hydrocarbon (HC) by volume. On an undenatured basis, the ethanol component ranges from 70% to 83%. E85 as a fuel is widely used in Sweden and is becoming increasingly common in the United States, mainly in the Midwest where corn is a major crop and is the primary source material for ethanol fuel production; however as yet, there are about 1900 filling stations selling E85 to the public in the US, and, until recently, only three in Canada. It is also available across most of the Maxol chain in Ireland.
There are questions about the use of biofuels like E85, ostensibly to reduce carbon emissions, when they may have a large carbon footprint according to one study.
E-85 ethanol is used in engines modified to accept higher concentrations of ethanol. Such flexible-fuel vehicles (FFV) are designed to run on any mixture of gasoline or ethanol with up to 85% ethanol by volume. There are a few major differences between FFVs and non-FFVs. One is the elimination of bare magnesium, aluminum, and rubber parts in the fuel system. Another is that fuel pumps must be capable of operating with electrically conductive ethanol instead of non-conducting dielectric gasoline fuel. Fuel injection control systems have a wider range of pulse widths to inject approximately 40% more fuel. Stainless steel fuel lines, sometimes lined with plastic, and stainless steel fuel tanks in place of terne fuel tanks are used. In some cases, FFVs use acid-neutralizing motor oil. For vehicles with fuel-tank mounted fuel pumps, additional differences to prevent arcing, as well as flame arrestors positioned in the tank's fill pipe, are also sometimes used.
For the 2009 automobile year, General Motors will offer 23 different engine/model flex-fuel vehicle combinations. Ford Motor company offers eight models, Chrysler will offer 11 models, and Toyota will offer just two. Daimler (Mercedes-Benz) has one model (C300) as well, and is probably the only one amongst the luxury car makers.
In US, Honda does not offer any E85 powered flexfuel vehicles in 2009.
GM has stated a commitment to dedicate 50% of its production to Flex-Fuel E85 capable vehicles by the 2012 model year. Also by 2012 all products of British luxury car-maker Bentley Motors will be Flex-Fuel using a patented fuel-system and an in-line fuel sensor.
As of 2008, there were an estimated 7 million Flex-Fuel capable vehicles on the road in the United States. A recent GM study found that roughly 70 percent of its flex-fuel vehicle owners did not know they could use E85, and fewer than 10 percent did so.
E85 has an octane rating higher than that of regular gasoline's typical rating of 87, or premium gasoline's 91-93. This allows it to be used in higher compression engines which tend to produce more power per unit of displacement than their gasoline counterparts. The Renewable Fuels Foundation states in its Changes in Gasloine IV manual, "There is no requirement to post octane on an E85 dispenser. If a retailer chooses to post octane, they should be aware that the often cited 105 octane is incorrect. This number was derived by using ethanol’s blending octane value in gasoline. This is not the proper way to calculate the octane of E85. Ethanol’s true octane value should be used to calculate E85’s octane value. This results in an octane range of 94-96 (R+M)/2. These calculations have been confirmed by actual octane engine tests." 
One complication is that use of gasoline in an engine with a high enough compression ratio to use E85 efficiently would likely result in catastrophic failure due to engine detonation, as the octane rating of gasoline is not high enough to withstand the greater compression ratios in use in an engine specifically designed to run on E85. Use of E85 in an engine designed specifically for gasoline would result in a loss of the potential efficiency that it is possible to gain with this fuel. Using E85 in a gasoline engine has the drawback of achieving lower fuel economy as more fuel is needed per unit air (stoichiometric fuel ratio) to run the engine in comparison with gasoline. This corresponds to a lower heating value (units of energy per unit mass) for E85 than gasoline.
E85 consumes more fuel in flex fuel type vehicles when the vehicle uses the same compression for both E85 and gasoline because of its lower stoichiometric fuel ratio and lower heating value. European car maker Saab currently produces a flex fuel version of their 9-5 sedan which consumes the same amount of fuel whether running e85 or gasoline, though it is not available in the United States. So in order to save money at the pump with current flex fuel vehicles available in the United States the price of E85 must be much lower than gasoline. Currently E85 is about 15% less expensive in most areas. More than 20 fueling stations across the Midwest are selling E85 at the same price as gasoline. E85 also gets less MPG, at least in flex fuel vehicles. In one test, a Chevy Tahoe flex-fuel vehicle averaged 18 MPG [U.S. gallons] for gasoline, and 13 MPG for E85, or 28% fewer MPG than gasoline. In that test, the cost of gas averaged $3.42, while the cost for E85 averaged $3.09, or 90% the cost of gasoline. In another test, however, a fleet of Ford Tauruses averaged only about 6% fewer miles per gallon in the ethanol-based vehicles as compared to traditional, gas-powered Tauruses. (Please note this is questionable as the reference provided is non-existent on NREL's website.)
As of December 31, 2008, there were about 1,921 public E85 fueling stations available in the United States. Prices vary by location, some prices over 30% less than regular gasoline. In other places it has been more expensive.
The number of gas stations offering E85 is expected to double over the next year as service stations are being offered incentives from government and ethanol industry grants up to $30,000 for the costs of retro-fitting pumps and tanks for E85 fuel. Unfortunately, this does little to offset the cost to install pumps and tanks for E85—a hefty $200,000 per station.
A recent development in the expansion of E85 filling stations is Wal-Mart's announcement that it will possibly sell E85 at its 385 gas stations countrywide. Wal-Mart along with its popular division, Sam's Club has a partnership with Murphy Oil Corp. which operates more than 9,000 gas stations in Wal-Mart parking lots. Should they decide to follow through with plans, Wal-mart has the potential to be the single largest retailer of E85 in the nation. Grocery retailers in Texas are also beginning to sell E85 at some fuel stations.
Business leaders like Richard Branson, Paul Allen, Steve Case, Vinod Khosla, John Doerr, and Bill Gates have become ethanol advocates and are investing heavily in ethanol. Microsoft co-founder Paul Allen is investing in a Seattle firm that wants to use canola oil, to create biodiesel, a biofuel associated with ethanol. And Vinod Khosla, the Kleiner Perkins partner and Sun Microsystems co-founder, has investments in two cellulosic ethanol companies. Microsoft's Bill Gates, has bought 25% of Pacific Ethanol, a Fresno, California company that is planning to build dozens of ethanol refineries in the U.S. In July 2006 Goldman Sachs invested $27 million into a Canadian company called Iogen, which wants to produce ethanol from switchgrass, a perennial grass that is inexpensive to grow. Iogen, a non-publicly traded company, is building the world's first full-scale commercial cellulose-to-ethanol plant by 2010. Another reason for ethanol's popularity is its contribution toward providing economic revitalization in rural communities across the country.
The U.S. Congress passed the The Energy Independence and Security Act of 2007, which mandates an increase in the use of biofuels in a new Renewable Fuel Standard (RFS), including ethanol, through the year 2022.
A University of Nebraska study in 2009 showed Corn Ethanol Emits 51 Percent Less Greenhouse Gas Than Gasoline
The initial assumption that biofuels were good for the environment because they had a smaller carbon footprint is in debate because some claim that the production of grain alcohol, and therefore E85, may actually have a greater environmental impact than fossil fuel.
That view says that one must consider:
Others say that ethanol from corn, as a fuel available now, and cellulostic ethanol in the future, are both much better fuels for the environment. Ethanol derived from sugar-beet as used in Europe or sugar-cane as grown in Brazil in industrial scale is generally seen as having a very positive CO2 balance with up to 80% reduction in well-to-wheel CO2.
The U.S. Department of Energy has published facts stating that current corn-based ethanol results in a 19% reduction in greenhouse gases, and is better for the environment than other gasoline additives such as MTBE.
Ethanol produced today results in fewer greenhouse gas (GHG) emissions than gasoline and is fully biodegradable, unlike some fuel additives.
EPA's stringent tier II vehicle emission standards require that FFVs achieve the same low emissions level regardless of whether E85 or gasoline is used. However, E85 can further reduce emissions of certain pollutants as compared to conventional gasoline or lower volume ethanol blends. For example, E85 is less volatile than gasoline or low volume ethanol blends, which results in fewer evaporative emissions. Using E85 also reduces carbon monoxide emissions and provides significant reductions in emissions of many harmful toxics, including benzene, a known human carcinogen. However, E85 also increases emissions of acetaldehyde—a toxic pollutant. EPA is conducting additional analysis to expand our understanding of the emissions impacts of E85.
The use of ethanol for fuel has had a damaging impact on food markets, especially in poorer countries. Ethanol is mostly made from yellow corn, and as the market boomed for alternative fuel, yellow corn went up in price. Many farmers saw the potential to make more money, and switched from white corn to yellow corn. White corn is the main ingredient of tortillas in Mexico, and as the supply dropped, the price doubled, making the base of most Mexican foods unaffordable. Many people see this as unacceptable, and want no overlap between food crops and fuel crops. Others point out that the earth is thought to be able to support double the current human population, and press that the resources available, such as unused farmable land, should be better handled.
The idea that ethanol caused dramatically higher corn prices was disproven when, in 2009, both ethanol and corn production increased to record levels, and the price of corn fell to just $3.40 a bushel, less than half the price that speculators drove corn prices to in 2007, according to data at the Renewble Fuels association.  Corn production in 2009 reached over 13.2 billion bushels, and a per acre yield jumped to over 165 bushels per acre.
Handbook for Handling Storing and Dispensing E85 National Rewnewable Energy Laboratory, April 2006
Flex-Fuel Bait and Switch - See how many flex-fuel cars are on the road and how many stations offer E85.