Transition towards sustainable transportation – What determines fuel choice?

For the transport sector to become more sustainable, substantial technological and behavioural changes are required. Increased understanding about household choices related to more green alternatives in transportation is needed in order for policy makers to make efficient policies in the future. The main purpose of this paper is to analyze which factors that determines the fuel choice between ethanol and gasoline for owners of flex-fuel vehicles (FFVs). We evaluate how the self-reported fuel choice is influenced by the relative price, as well as individual differences in norms and perceptions about environmental and quality attributes of ethanol. Data was collected through a survey sent to Swedish FFV owners and is analyzed in a binary choice and a LCM framework. Results show that price, perceptions about quality, age and environmental attitudes influence the self-reported willingness to choose ethanol. Furthermore, results show that preferences are not homogenous, three groups are identified; price conscious respondents, ethanol skeptical respondents and respondents with pronounced environmental concern. However, although the motive for introducing and subsidizing ethanol was to reduce climate and environmental impacts, the group that chooses ethanol based on climate and environmental motives is small. The results further reveal that the debate about motor damages from ethanol have had a long lasting effect on the willingness to choose ethanol. Thus, it is necessary to try to prevent or mitigate concerns regarding e.g. potential technical or ethical issues when promoting future technologies or fuels aimed at a sustainable transportation sector. •Price is vital for the choice of fuel and renewable alternatives might therefore need to be subsidised.•Individuals with environmental attitudes and norms are likely to choose ethanol over gasoline.•Uncertainties about fuel quality or detrimental effects on the car can be crucial when new fuels are introduced.•Correct information is important, both when introducing new fuels and in case debate arises.•The group within FFV owners that chooses ethanol based on climate and environmental motives is very small.