VeraSun Energy (NYSE:VSE), one of America's larger ethanol producers, announced today that it has struck a deal with Enterprise Rent-a-Car to begin promoting the use of its branded VE85 ethanol -- which is 85% corn-based ethanol and 15% petroleum.

On its face, the deal is pretty modest. For starters, although Enterprise has the world's largest fleet of flexible-fuel vehicles at 41,000, that number still represents just 4% of its total fleet. Secondly, VE85 is currently available in only 90 retail locations nationwide, compared with the almost 170,000 traditional gas stations that litter the countryside.

Nevertheless, I like the deal from both companies' perspectives. It gives VeraSun some good advertising and helps to expand the reach of ethanol. For Enterprise, it gives the company a boost in the eyes of environmentally conscious consumers in its battle against Hertz (NYSE:HTZ) and Avis (NYSE:CAR).

Longer-term, the deal could also give the broader ethanol industry a boost. In many ways, I liken the deal to efforts by utility companies such as Xcel Energy (NYSE:XEL) that now regularly offer customers the option of buying their electricity directly from wind power. The arrangement has let customers show the industry that they want greener sources of energy and has resulted in an increased demand for wind power.

On a smaller scale, this deal could have the same effect for ethanol, especially if Hertz, Avis, and other car rental firms also follow suit and begin converting more of their fleets.

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Fool contributor Jack Uldrich does not own stock in any of the companies mentioned in this article. The Fool has a strict disclosure policy.