Source: http://en.wikipedia.org/wiki/Ethanol_fuel
Fuels with more than 10% ethanol are not compatible with non E85-ready fuel system components and may cause corrosion of iron components. Ethanol fuel can negatively affect electric fuel pumps by increasing internal wear, cause undesirable spark generation, and is not compatible with capacitance fuel level gauging indicators and may cause erroneous fuel quantity indications in vehicles that employ that system. It is also not always compatible with marine craft, especially those that use fiberglass fuel tanks. Ethanol is also not used in aircraft for these same reasons.
In April 2008 the German environmental minister cancelled a proposed 10% ethanol fuel scheme citing technical problems: too many older cars in Germany are unequipped to handle this fuel. Ethanol levels in fuel will remain at 5%.
