The idea is to run a smaller, more fuel-efficient engine in your car while maximizing the usage of the higher octane ethanol so as to not impede performance. The group estimates gas mileage improvements of about 20 to 30 percent and Daniel Cohn, senior research scientist at MIT, says that adding the ethanol injection system would roughly add $1,000 to a vehicle, considerably undercutting the premium for a gas-electric hybrid.
It seems like a novel use of ethanol, since the renewable fuel's limited supply is often the first argument used against its sustainability. The source article is rather short, though. When discussing how the system works, they only state that it would be used on a turbocharged ICE and that the ethanol would be injected when knock is likely to occur. They don't discuss the turbo in any level of detail, but one might consider that it may make sense to incorporate a system that would advance the timing and increase the boost pressure when the ethanol is in use like that of Saab's biopower system. As for the amount of ethanol required, Cohn doesn't offer an estimate, but says that it would only have to be refilled about every three months.
[Source: Reuters via ABC News]