The introduction of E10 in Germany : a case of failure
June 03, 2011
In 2009 the EU introduced the E10 blend (10% biofuel and 90% fossil fuel) in Europe as part of the climate and energy package.
However, as yet only a few member states have introduced the new fuel. The biggest markets have been France and Germany with very different results.
France was the first member state to introduce E10 in April 2009 and all BP filling stations offered the new fuels immediately after the law came into force. No problems occurred with cars or prices of the fuel because the introduction was well prepared (pumps clearly labelled, customers helped in choosing the proper fuel for their cars, a list of cars that cannot use E10 in the French law). Thanks to these expedients, at the current time in France the market share of E10 is 17.6% and 20% of the filling stations offer this fuel. This is a success story.
Different the case of introduction in Germany, that originally planned the introduction of E10 at the same time of France. The government created an agreement with the stakeholders and the car industry was supportive to the new fuel. Unfortunately the foreign car manufacturers released for Germany numbers of non-E10 compatible cars and the number was too high (about 3 million cars) for the government to pursue the E10 introduction, and it has been stopped. After the elections the new government came back to E10 to fulfil the mandatory biofuels targets, to avoid financial penalties for the oil industry. In January 2011 E10 was allowed on the German market (available in February), sold at the same price as the former standard petrol; the E5 became a couple of cents more expensive. Even if cheaper, E10 has been refused by the car owners because of obvious reasons: oil companies had labelled their pumps with warning signs “caution, E10 can harm your car, check if it is compatible!”. But this check could not be done at the filling stations, no lists of car were available anywhere and nobody was able to assist the drivers (pump owners were not allowed to give any advice due to warranty issues). All customers were scared to use E10 to avoid the damages in their cars, and they chose the E5 even if more expensive. But now there is too little E5 in the pumps and too much E10 in storage that nobody wants; the consumer dissatisfaction is tangible and there are still the energy and climate targets to fulfil. An aggressive media campaign started accusing the government and mineral oil industry of this behaviour and of this failure. This caused also a current of opponents that are discussing about environmental and ethical merits of biofuels. The consequence has been the idea in the customers minds that E10 is not an environmentally friend product (40%) and other part of consumers retains that E10 can really cause engine failure in their cars. The German government called an urgent summit at the beginning of last March to discuss the problem: better and more information have been promised trying to recreate the destroyed consumer confidence in E10. The big oil marketing managers have the onerous task now of advertising the product. They now need to find a credible story why their new product is a must-have. The latest available data published by the German mineral oil industry association shows that only 22% of car holders with E10 compatible cars chose E10 the last time they filled up their car; in future however they declared that are planning to use E10 (just the 30%) and 23% are still hesitating. In the meantime the ADAC (Association representing in Germany the driving public) threatened to sue the oil industry over the E10 introduction because it thought that only one more expensive alternative to E10 is on the market and this is in breach with the law on E10. Aral, as first distributor, announced it will offer three petrol grades to its customers: E5, E10 and premium brand with 98 octane. The future consumers choice among these options will be known soon.
For the entire ethanol industry the E10 failure is a wake-up call. If EU wants to decarbonise the transport, E10 is indispensable and even higher blends will be required in the future. To introduce them in the market requires a joint effort. The EU ethanol industry needs to start focusing on those who are filling up their cars, the end users, up to this moment a neglected target group in terms of publicity. This seems to be a difficult task, but in spite of all in Europe the fuel ethanol is coming out of its niche and is no longer being pushed to one side. The growing of this market is supported but the industry must learn from its mistakes, giving example also for all other member states which will have in next future the E10 introduction.