Ford and Saab have so far been the front-runners in promoting the use of E85, a blend consisting of 15% unleaded and 85% renewable bioethanol. Both have introduced cars to the UK market that have been modified to run on this fuel. I understand that the main differences between these cars and the equivalent standard models are changes to the materials used in the various bits of pipework that make up the fuel system - E85 is more corrosive than the unleaded fuel most cars run on.
E85 also has a higher octane rating than unleaded - 105 is the figure that is usually quoted, compared with 95 for standard unleaded and 97 to 99 for super unleaded. Ford and Saab differ in how they handle this characteristic of E85. Ford sets up its engines so that they don't develop significantly more power when running on E85. Perhaps the company takes the view that there will be a higher degree of acceptance for E85 if the experience of driving a car running on the fuel doesn't feel different to that of driving one running on unleaded - a question, perhaps of not scaring the horses by giving them too many horsepower to play with.
Saab, by contrast, has years of experience with knock sensors and turbo-charging to fall back on and sets its engines up to exploit the higher octane rating of E85 - its 2.0t BioPower unit, for example, delivers 20% more horsepower and 16% more torque than the equivalent unleaded-only engine. This difference certainly makes itself felt on the road.
So which of these approaches is correct? I don't think it's possible to answer that question clearly at the moment. Saab's and Ford's current engines are very much the first generation of E85-capable power units; they are adapted from existing designs and aren't fully optimised to run on E85 as they still need to be capable of running on standard unleaded as well. But if E85, or even pure bioethanol becomes universally available, it looks like more drastic changes to engines could be introduced to exploit the higher octane ratings - small turbocharged engines with lots of power that minimise the fuel consumption penalty of running on bioethanol look like the way it's going.