A recent study reveals that the Government’s green agenda is adding about £2 extra every time you fill up your car. The shift to E10 petrol — which contains a higher 10% bioethanol blend compared to the previous 5% — has increased fuel costs for drivers by roughly 3.5 pence per litre.
Research from the University of Warwick shows that biofuel content requirements in both petrol and diesel are causing more price fluctuations at the pump. Retailers pass these higher costs on to motorists, making fuel more expensive.
E10 petrol became the new standard in September 2021 as part of efforts to reduce emissions and meet decarbonisation targets. While the Government initially claimed this change wouldn’t affect pump prices, the reality has been different. Greener petrol does lower CO2 emissions but comes with higher costs and some drawbacks. Experts warn E10 can reduce engine efficiency, meaning you need to refuel more often, and not all vehicles on UK roads can safely use it.
The Renewable Transport Fuel Obligation (RTFO), introduced in 2008, requires blending biofuels with fossil fuels to cut carbon emissions. The major change came in 2021 when the ethanol mix in petrol doubled from 5% to 10%. Diesel has contained about 7% biofuel for 15 years, mostly biodiesel from vegetable oils or animal fats, which can affect food prices. Some biofuels come from waste products like used cooking oil, which is more sustainable.
The Real Cost of Biofuel Blends
Before the switch, the Government predicted pump prices wouldn’t rise, but drivers would need to buy more fuel due to lower energy content in E10. However, new research found wholesale biofuel prices have fluctuated widely and don’t always follow oil prices. This volatility quietly pushes up pump prices.
At times, bioethanol has added as much as 8p per litre to wholesale petrol costs. For diesel, the impact is even greater, with biofuel price increases reaching 14p per litre in mid-2022. On average, RTFO rules have raised wholesale prices by 3.5p per litre for petrol and 6p per litre for diesel over the past five years.
Three main factors drive these price hikes:
- The increase from E5 to E10 petrol in 2021.
- Rising ethanol prices — which have become much more expensive than fossil petrol since 2015.
- Biodiesel being far more costly and volatile compared to fossil diesel, with price gaps widening since 2012.
Retailers tend to pass on price rises quickly but delay reflecting price drops, making costs unpredictable and harder for consumers to manage — especially during times of high inflation like 2022.
For a typical family car with a 55-litre tank, E10 biofuel costs add about £1.93 more per fill-up for petrol cars and £3.30 for diesel vehicles. Over a year (around 7,400 miles), this means an extra £28 for petrol drivers and £48 for diesel drivers solely due to biofuel costs.
Is it Worth It?
Despite these extra costs, the Government defends the policy by calculating the “social cost of carbon emissions.” They estimate that for every £1 added to consumer fuel bills, biofuels prevent £5.70 in carbon-related damage to health, agriculture, and property.
Dr Nikhil Datta from Warwick University said the policy creates price volatility but ultimately benefits the UK’s net-zero goals. RAC Foundation director Steve Gooding agrees, noting that while biofuels push prices up, their environmental benefits outweigh the cost.
Experts also suggest exploring synthetic e-fuels alongside electric vehicles to help cut emissions from millions of combustion engine cars still expected on roads for years.
Can All Cars Use E10 Petrol?
Not all cars are compatible with E10. When introduced, it was estimated 600,000 to 700,000 older petrol cars — mainly classics — could be harmed by E10. Cars made before 2002 are at risk and should be checked for compatibility. Since 2011, all new cars must run on E10, so newer models generally have no issues.
The Government offers an online checker, and your car’s fuel cap may indicate if E10 is suitable.
Potential Damage from E10
Using E10 in incompatible vehicles can cause long-term damage. Ethanol absorbs water, which can corrode fuel system parts like seals, plastics, and metals. It also dissolves some materials faster, leading to leaks or engine problems.
Classic car groups say concerns are sometimes exaggerated, but they advise replacing old fuel system parts with ethanol-resistant materials.
Does E10 Affect Fuel Economy?
E10 contains less energy per litre than E5, so cars burn it faster. The Department for Transport predicted fuel costs for petrol cars would rise by about 2.3% after the switch. Recent events, like the Ukraine war, have further pushed up fuel prices.
