Using Ethanol as a powerboat fuel can cause many headaches including fiberglass fuel tank failure, fuel system blocks, damaged engines, and increased fuel foulage.
What happens to your boat?
Because of the fact that Ethanol is a solvent, it can damage the sealing on older fiberglass fueltanks. These dissolved sealants are more than likely to get eaten by the engine which in turn causes damage and in turn makes fuel leak from the tank into the bilge which is a major fuel hazard. Even if you fuel tank is not built of fiberglass it also is not immune to this type of corrosion. Ethanol has a cleaning effect on tanks that can release metallic bits which go through fuel filters. These clog the injectors nozzles and the carburetors. Water also combines with the ethyl alchohol and produces a non combustible layer of liquid which stops engines.
What can you do to protect your boat?
There is not real answer for protecting your boat from ethanol, but the following is a few things that have helped others.
In the end, keep your fuel clean, and your tank free from water while using a good filter and you will be fine. Hopefully in the future the fuel companies and boat motor manufacturers can work together to eleviate all the problems.