Ethanol oxygenates the gasoline allowing the fuel to burn more completely in combustion and therefore produce cleaner emissions.
Due to amendments to the Clean Air Act in the 1990s, all gasoline was required to be oxygenated. So even regular gasoline has a tiny amount of ethanol.
Whether ethanol is actually better for the environment is up for debate. It has been found that ethanol actually emits more greenhouse gases than gasoline.
You can read about the pros and cons for Ethanol in previous GreenAnswer blog articles and questions, which you can find here:
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