Ethanol, like Biodiesel, is a plant derived alternative to oil derived fuel. Ethanol burns with 20% less CO2 than unleaded gasoline (petrol) and is particulate-free. The CO2 that it does emit was only recently in the atmosphere anyway so it can’t do much more harm. The fuel is renewable and offsets nasty oil usage. Most modern cars can run on a mix of up to 10% ethanol without any modification and vehicles can be produced to run on pure ethanol.
But like its cousin Biodiesel, Ethanol is not the green messiah it’s cracked up to be. According to the Economist article, Ethanol, schmethanol;“the amount of heat you get from burning a litre of ethanol is a third less than that from a litre of petrol. What is more, it absorbs water from the atmosphere. Unless it is mixed with some other fuel, such as petrol, the result is corrosion that can wreck an engine's seals in a couple of years.” Ethanol generally reduces the fuel economy of cars compared to normal gasoline. Ethanol production uses a lot of potential food, water and land as well as having distribution issues. It too is causing deforestation, this time in the Amazon. The clearing of forests has been said to build up a carbon debt which may take up to 420 years to make up with the CO2 reduction of ethanol usage.. Some have suggested the energy payback is too small for it to be sustainable (at least with corn). Some scientists have predicted an increase in respiratory health problems due to ethanol usage. As with Biodiesel, the wider cost of ethanol, especially in the light of other alternatives seems to limit its potential as the widespread replacement of oil based fuel.