The focus is E-30, or gasoline that consists of 30 percent ethanol, as opposed to the 10, 15 and 85 percent blends currently on the market.
Branstad described the $250,000 "Fueling our Future" program as a way to test consumer interest in making more choices at the pump. The funds would be used to help retailers defray the costs of blending pumps, which could mix up batch fuel blends on the spot.
Monte Shaw, executive director of the Iowa Renewable Fuels Association, said the governor is anticipating the future.
E-30 ethanol blends received national attention earlier this year after tentative federal rules establishing future fuel efficiency were announced. One was that automakers manufacture vehicles that average 54 mpg.
Such high fuel efficiency is the product of high-combustion engines, the kind that operate best with high-octane fuels.
"Ethanol is the cheapest source today of octane," Shaw said.
He said industry insiders have been hearing for at least a decade that folks who have flexible-fuel engines in their vehicles have had good results with E-30. Anecdotal evidence suggests that E-30 hits the "sweet spot" of the ethanol blends by combining high performance with fuel efficiency.
Shaw said blending pumps are available at 58 retailers in Iowa.
The governor would like to boost that number, and plans to team up with the Iowa Department of Agriculture and Land Stewardship, the Iowa Department of Transportation, Iowa State University and the Iowa Renewable Fuels Infrastructure Board to administer and test the program.
"This pilot program will provide Iowans with additional access to higher blends of ethanol and biodiesel, which will help our farmers, communities and economy in producing, processing and profiting locally," Branstad said in a news release.
According to its website, The Iowa Renewable Infrastructure Program uses grants to assist retailers in the conversion of their equipment to allow the use of renewable fuels in Iowa.
Reimbursement can be for 50 percent of the costs for specific components of a project with a three-year commitment required to sell certain renewable fuels. A five year commitment to store and sell renewable fuels and install certain equipment can result in up to 70 percent reimbursement for specific equipment or installation costs.
Heat biodiesel terminal equipment and/or infrastructure can receive funding for up to $100,000 per project.