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I googled a bit and the web said that ethanol does indeed burn cleaner which makes sense since there should be less contaminants and more oxygen is available. Ethanol also absorbs more heat then vapourized so there should be less heat in the combustion chamber resulting in less NOx emmissions. Do you have any sources for your claims? I would like to read about it because clearly i don‘t know everything about burning ethanol.
You are correct. Ethanol does have a higher octane rating though so a blend of gas and ethanol will have a higher octane rating and hence knock resistance.