UK's E10 introduction could increase fuel prices

Think tank Chatham House has warned that the UK's adoption of a new EU directive to offer gasoline containing 10% ethanol, or E10, for sale at forecourts could raise fuel prices by lowering fuel efficiency in vehicles.

Additionally, the UK Department for Transport has raised concerns about possible damage to 8.6 million vehicle engines that may not be compatible with the new fuel. Super E10 fuel is already in use throughout Germany.

News organization PetrolPlaza reports, "The EU's Renewable Fuel Transport Obligation requires 5% of the fuel supply of member states to be renewable by 2014. This is due to increase in the next seven years under the EU's Renewable Energy Directive, which requires 10% of transport energy from renewable sources by 2020. Oil companies have decided to use ethanol as this renewable source. Most ethanol comes from the US, where it is made from corn, while some comes from Brazil's sugar cane and a small amount from British sugar beet."

Further information on the EU's use of E10 can be found in this article.

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