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Ethanol fuel (E85, so named for the percentage of ethanol it contains) delivers big benefits in turbocharged applications. The higher effective octane and low burning temperature allow for higher boost pressures and/or more aggressive ignition timing settings, to get more power from the same hardware setup, compared to plain gasoline.
Back in the day, running E85 was a bit of a hassle. To switch from gasoline to ethanol, you had to run your gas tank totally dry, then switch ECU maps to your E85 map, then fill the tank with E85. Then when you wanted to run gasoline again, you'd have to do the whole process in reverse.
More recently, major auto manufacturers started producing vehicles with factory installed flex fuel systems. Those cars sense the quantity of gasoline or alcohol in their fuel lines, and automatically change ECU mapping to match. The aftermarket took advantage of the availability of these sensors, and implemented their own flex fuel systems.
Cobb Tuning offers flex fuel systems for 2004 and newer STI cars, and 2008 and newer WRX models, plus some turbo Legacy and Forester models. Compared to the old method of map switching and fuel-tank-emptying, the new systems are super-easy to live with. Just splash whatever fuel you want -- 93 octane, E85, or any mixture of both -- into your tank, and the ECU will figure out what boost/timing/fuel settings to run automatically.
There are still some trade-offs to running E85 fuel. E85 is hydrophilic, meaning it loves water, and if you leave E85 in your fuel tank for a long time it will tend to absorb a lot of water, which can cause corrosion, slow starting, and other issues. Cold weather is also difficult for E85; cars that were designed to start using gasoline can have a hard time firing up in sub-freezing temps using ethanol, and the colder it gets the worse this problem becomes.
Ethanol contains about 30% less energy per unit of volume than gasoline does, so gas mileage suffers proportionally. The higher quantity of fuel demanded means flex fuel cars have to run much larger fuel injectors and fuel pumps than gasoline-only cars.
Direct-injection FA20 and FA24 turbo cars (2015+ WRX and 2014+ Forester XT, among others) seem somewhat prone to high-pressure fuel pump failures when running a high-percentage of ethanol. This may have to do with the lower lubricity of ethanol compared to gasoline. Some customers report that keeping the ethanol percentage under 60% seems to keep the fuel pump alive. We don't yet have enough information to know if that's really true or not, but reports of high pressure direct injection fuel pump failures using E85 are fairly common online.
Finally, the availability of E85 fuel is limited, and some areas don't have any gas stations that carry it at all.
Still, despite the trade-offs, the cheap and easy power increases available on-demand and with relatively little hassle makes flex fuel an appealing option for many of our Subaru customers.