Germany’s E10 Introduction—A Drama not to be Repeated

By Robert Vierhout | April 18, 2011

As we all know, the American ethanol industry is fighting for a bigger market share by tearing down the blend wall. In Europe we are now facing similar problems, though we are 5 percentage points behind. We are trying to go from E5 to E10, and it’s not an easy ride in all places.

In early 2009, France was the first to introduce E10 fuel, once it was allowed in the EU. All BP filling stations offered the new fuel almost overnight. There were no problems reported with cars or fuel prices. Pumps were clearly labelled, customers were helped to choose the right fuel for their car, and the French law contained a list of cars that could not run on E10. The market share of E10 in France is now 17.6 percent. Not a humungous number, but it is growing every year.

In Germany we see a totally different picture.

Plans to introduce E10 in Germany at the same time as France were put in the freezer because it turned out that too many older models would not be E10 compatible. Ironically, most of those were imported brands from France and Italy. German manufacturers welcomed E10 as an easy solution to reduce CO2 emissions of their traditionally big and heavy cars. 

A newly elected government decided, however, to allow E10 in the market to fulfill mandatory biofuel targets and avoid severe financial penalties for noncompliance. If the EU wants to decarbonize transport, E10 is indispensable at the start. This put Big Oil into the uncomfortable situation of now being reliant on biofuels, which they had been discrediting at every possible occasion—a true love-hate relationship.

In February, E10 fuel became available. Although selling several cents cheaper than E5, almost nobody wanted it. The reason: Oil companies had labelled the pumps with warning signs: “This fuel contains up to 10 percent ethanol and can harm your car; for more information, ask inside.” Unfortunately, E10 pump owners were not allowed to give advice due to warranty issues. Consequently, consumers got scared that E10 could damage their car. Sales of E10 plummeted and a shortage of E5 fuel was the result.

A very aggressive media campaign started, accusing the government and the mineral oil industry of irresponsible behaviour. Anti-biofuel opponents saw a window of opportunity to give a new impetus to the discussion about the environmental and ethical merits of biofuels. The debate became very emotional with headlines in big German dailies against E10. My favourite: On one page, all the so-called biofuels facts, like clearing rain forest in the Amazon, growing corn for German biofuels, pushing food and fuel prices. On the following page came full coverage of the war in Libya, with the collateral effect of increasing oil prices.

At the same time, “impartial” surveys indicated that over 40 percent of consumers were not filling up with E10 because they believed it was not environmentally sound. For just 20 percent, the real concern was possible engine failure. In this respect the French differ greatly: Almost 80 percent have a favourable position towards E10.

So what went wrong in Germany? This question hovered over the March 8 summit, urgently called by the German government to settle the unrest. The government did not give in to the media pressure, well aware that there is no real alternative to decarbonize transport. It promised better and more information. The oil industry committed to better informing consumers, realizing the E10 brouhaha, which was probably part of their strategy to discredit biofuels and eventually get rid of the biofuel mandates, backfired. I don’t envy Big Oil’s E10 marketing managers now tasked to advertise the product. After years of stressing all possible downsides of biofuels, they now need to find a credible story why their new product is a must-have.

The E10 drama is a wake-up call for the European ethanol industry. Relying on the oil industry’s will to bring our product to the customers will not do the trick—especially if there is a (badly) hidden agenda. The European ethanol industry needs to focus on drivers—so far a neglected target group. A difficult task? Probably. Unfamiliar, to say the least. The good news is fuel ethanol can creep out of its niche in the EU, where until now it could be neglected, to become a mature player that matters. Negative experiences are part of growing up, but we learn better from mistakes.

Author: Robert Vierhout
Secretary-general, ePURE