Joshua Dowling

E10 ethanol petrol sales have tanked as there is little to no benefit. But the government is about to have another go at force fueling motorists.

The NSW Government is going to spend $4.5 million in taxpayer funds on an advertising campaign to convince motorists to buy more ethanol-blended E10 petrol – even though it has been scientifically proven to be less efficient than regular unleaded.

E10 fuel – which is unleaded blended with a 10 per cent mix of ethanol – also only has marginal environmental benefits because you need to burn more of it to travel the same distance as a car running on regular unleaded.

The controversial fuel was introduced in NSW in 2007 by Labor Premier Morris Iemma, who described it as a “win for the hip pocket when it comes to fuel costs for families”.

But motorists quickly figured out the few cents they were saving per litre at the bowser didn’t add up in the long run because a tankful of E10 would empty more quickly than regular unleaded.

The latest figures show less than 3 per cent of unleaded petrol sold in NSW is E10; other states are yet to mandate use of the fuel.

The NSW Government is trying to increase consumption of E10 so that it represents 6 per cent of all unleaded petrol sold.

The two-year advertising campaign due to start in 2017 will try to dispel “myths” about E10

The biggest ethanol producer in Australia, Manildra, has donated more than $4 million to the Liberal Party, the Nationals and Labor since 1998 – and has been lobbying the Baird government for the past 18 months to increase E10 consumption.

The NSW Government says the Independent Pricing and Regulatory Tribunal (IPART) will regulate the wholesale price of E10 in an attempt to make it a financially viable alternative.

On average, E10 is only 2 cents a litre cheaper than regular unleaded but is 3 per cent less energy-efficient.

The two-year advertising campaign due to start in 2017 will try to dispel “myths” about E10, such as that it can damage engines and void warranties on new cars.

“Research suggests that many motorists are put off from purchasing E10 because of longstanding myths and misconceptions,” said Victor Dominello, the Minister for Innovation and Better Regulation.

“Motorists are being ripped off at the bowser due to its high cost in comparison with other fuels. That is why IPART will be regulating the wholesale price of ethanol to ensure it is a more competitive fuel option.”

Almost all modern vehicles can run on E10 fuel, according to a comprehensive list published by the Federal Chamber of Automotive Industries.

Adding to confusion among consumers, however, popular cars such as Hyundai aren’t compatible with E10 until 2003 onwards, while most Holdens sold since 1986 can run on E10 — with the exception of certain models that weren’t compatible until 2007.

“This campaign will dispel these myths and encourage motorists to use E10 (which is) a sustainable source of fuel and compatible with most cars,” said minister Dominello.

In addition to its limited environmental benefits, E10 has not been helped by high profile fuel contaminations.

In June 2015, dodgy E10 fuel caused more than 20 cars to conk out on the M4 motorway near Eastern Creek in the morning peak hour after filling up at a nearby service station.

At least 13 cars needed to be towed because their engines were too badly damaged after ground water leaked into the station’s E10 storage tank.

While most drivers now avoid the so-called “eco fuel”, the consumption of premium unleaded has skyrocketed since E10 was mandated.

A car with E10 needs to burn more fuel to travel the same distance as a car on premium unleaded.

Premium unleaded now represents 40 per cent of all fuel sold in NSW, twice the national average, according to the Australasian Convenience and Petroleum Marketers Association.

The massive swing to dearer fuel – which has coincided with an increase in sales of European cars that command premium unleaded – has delivered a windfall to fuel retailers.

According to figures compiled by the Australian Competition and Consumer Commission in 2014, the average profit margin on premium unleaded was 3.69 cents per litre versus 1.77 cents per litre for regular unleaded.

Fuel companies market premium unleaded as a performance fuel, however its main benefit is longer driving range, which reduces overall emissions.

Premium unleaded (either 95 or 98 octane) burns more efficiently because it has a higher calorific value.

Real world tests have repeatedly proven a car with a tankful of premium unleaded will travel further than one running on E10.

A car with E10 needs to burn more fuel to travel the same distance as a car on premium unleaded.