Why Automakers Are Pushing for a Single Gasoline Grade

CHICAGO -- While the electric vehicle (EV) is the long-term hope of many for meeting fuel economy and greenhouse gas emission goals, the internal combustion engine (ICE) is the short- and mid-term reality. According to some studies, more than 90% of light-duty vehicles on the road in 2035 will still have an ICE, making improving its efficiency the key to maintaining momentum on transportation targets.

The big three U.S. automakers—General Motors (GM), Ford Motor Co. and Fiat Chrysler—have one suggestion that they believe will have the biggest bang for the investment buck. They, along with the United States Council for Automotive Research, are lobbying for the introduction of a 95-octane gasoline standard. The higher-octane blend would fuel a new generation of more efficient, turbocharged engines, according to proponents. The idea is that this new fuel blend would gradually dominate the forecourt as more of these vehicles hit the road.

CSP Fuels spoke with Bill Studzinski, global propulsion fuels group manager for Detroit-based GM, about the proposal and what it would mean for the future of fuels. Here are the answers to three questions about automakers’ push for a 95 research octane number (RON) gasoline standard ...

Photo courtesy of KOMUnews.

If automakers could have their dream scenario, they would say the more octane in the nation's gasoline the better—even as high as 100 RON, Studzinski said.

“The problem is to do this, you have to have a national standard,” he said. “You can’t have just some parts of country going to new fuels and others not because we have to design vehicles to have this higher compression ratio and go all in for reaching for efficiency.” The fly in the ointment here is California, which is not only the largest vehicle market in the United States but also has its own regulations that make moving higher than 95 RON problematic.

A 95 RON standard also addresses the fact that the more octane in the fuel, the higher the end product's cost.

“We found there’s a sweet spot where you can improve the octane relative to regular unleaded, but as long as you don’t reach too far, the costs don’t get too far out of control,” said Studzinski. The 95 RON blend would have production costs about 5 cents per gallon (CPG) higher than regular unleaded gasoline (87 octane).
 

Photo courtesy of Max Pixel.

The big three automakers propose introducing 95 RON gasoline as a middle grade of sorts—sitting in between regular unleaded and premium grades. The regulatory process would need to play out, which could take at least a couple of years. From there, the idea is that the turnover of the vehicle fleet would slowly work its magic.

“As new vehicles are designed, optimized and come on to the marketplace in 2023, then volumes of 95 RON would grow about 7% each year, and then the legacy fuels would drop off 7%, and you would have a transition of diminishing and increasing curves,” Studzinski said.

It would take about seven to 10 years before 95 RON became the dominant fuel in the marketplace, he said. “But the transition time gives fuel producers time to adjust, invest and do things they need to do to sell the octane,” Studzinski said.

Photo courtesy of 127driver.

That 5-CPG increase to production costs would be larger once it reaches the retail site. There is no hard number on what that ultimate pump price would be, since it depends on several factors along the supply chain.

But the big three automakers are confident they have an argument for winning over consumers and lawmakers who may be shy about the premium pricing.

The 95 RON fuel would offer an average 3% efficiency increase, which translates to a 3% improvement to fuel economy. This may not seem like much, “but in the bigger scheme of things, it is a huge number,” Studzinski said.

Adopting 95 RON gasoline as the primary fuel blend in the United States would offer the equivalent carbon-dioxide reduction of adding 720,000 battery electric vehicles (BEV) per year. This figure is key because automakers are obligated to meet greenhouse-gas emission targets for 2025 in addition to fuel-economy targets.

Meanwhile, the automakers believe the improved fuel efficiency will add up.

“What you’ll see is the cost of ownership of the vehicle is kept competitive, kept low,” Studzinski said. “The efficiency gains you get will outweigh the small incremental cost increase that will happen down the road.”

For more on the 95-RON standard push including how it could affect fuel retailers, see the July issue of CSP magazine.