Most petrol in the UK currently contains about 5% ethanol (the same stuff as in vodka, gin and whiskey!). It burns well and modern cars with fuel injectors can actually benefit from it. Series Land Rovers however have carburettors that are open to the air and this can allow the volatile ethanol to escape before it gets chance to burn. This can result in a leaner fuel mixture entering the engine, with its associated hotter engine running characteristics.
Five percent is a small fraction and is generally considered not to be a serious issue, but government legislation is due to increase this to 10% and problems then become more noticable. The USA have been using 10% ethanol in petrol for some time and are familiar with the problems caused for older vehicles
Of particular concern is the fact that ethanol absorbs water from the air - basically it dilutes itself. So if ethanol-containing fuel is left in the fuel tank over the winter months or for long periods of time, then this water builds up and can cause corrosion inside the tank. This happens quite easily because whilst water mixes well with the ethanol in your vodka and does not separate out, it does not mix with petrol so whilst the alcohol is responsible for absorbing it, the petrol can kick it out ( it's called solvent partitioning for those interested). So we can actually get a water layer in the fuel tank that can cause corrosion damage. When you start up the engine after winter or a long break, the rusty particles that may have been dislodged from the tank can partially block carburettor jets and and fuel filters and cause rough running. You may also notice damp fuel stains around the outer edges of the tank if the sealing joints have become corroded. The cost of a repalcement tank for a Series Land Rover is significant and they are not easily repaired.
The Federation of British Historic Vehicle Clubs (FBHVC) have recently published their tests on products that are designed to combat the corrosion aspects of ethanol in fuel. Six products that were extensively tested were found to be effective in combatting corrosion. These products now carry the FBHVC logo of approval on the packaging. Not all manufacturers submitted their products to the FBHVC for testing so it is possible that some other products are effective also.
The really troublesome problem though is the fact that natural rubber does not tolerate ethanol well at all. Neither do some polymers and even cork is affected. So when the percentage increases to 10% we need to be careful to check the condition of rubber items like the fuel pump diaphragms. Modern car parts are designed with this 10% ethanol in mind, but replacement Series Land Rover parts are usually not in the same league.
The photo above shows how a fuel pipe leading to the carburettor on a Series Land Rover can dangerously deteriorate and crack. I doubt if this was due entirely to ethanol in the fuel as the level is currently 5% in the UK. It is more likely to be due to the pipe itself not being made from petrol resistant rubber. Yes, they are available and you cannot be certain that the tube inside your metal braiding is the correct quality rubber. The pipe above was about 2 months old and came from inside a metal braided fuel pipe. So if you smell fuel around your engine CHECK IT OUT.
For a list of metals and plastic materials that are suitable/unsuitable for ethanol additive petrol visit the FBHVC website. You will also find a list there of materials affected by biodiesel.