E10 contains a higher percentage of ethanol which can cause damage to components in older vehicles.
Tests from the Department for Transport (DfT) showed E10 can lead to degradation of fuel hose and seals, blacked fuel filters and damaged fuel pumps.
Carburettors and fuel tanks can become corroded by the new fuel while a car’s injectors could also become blocked.
The ACEA report has urged drivers to make sure they check their vehicle is compatible before topping up their cars with the new fuel.
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The report said: “In countries that offer E10 petrol, before you fill your vehicle with petrol please check that your vehicle is compatible with the use of E10 petrol.
“Anyone who owns a car made before 2001 needs to check the compatibility of their vehicle with the new fuel.”
Last year’s DfT report said vehicle compatibility had been the main barrier to the introduction of E10 so far.
The report said not all vehicles had been approved by their manufacturers to use fuel with more than five percent ethanol.
It claimed the majority of vehicles registered in the UK are approved for use with E10 with the number decreasing every year.
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Last year, the DfT said there were around 400,000 older family cars which may not be able to use the new fuel with this figure set to halve by the time the new fuel is introduced.
The DfT said this worked out at the equivalent of removing around 350,000 cars from the road.
However, experts at the RCA have warned there could be as many as 600,000 vehicles currently on the road which are not compatible with the fuel.
Drivers have been urged to contact their car manufacturer as soon as possible and ask them questions about your specific vehicle.
As a rule, those who own a car built before 2002 are not advised to use the new E10 in their cars.
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Experts at Hagerty have also warned some vehicles built before 2011 may also be unable to use the fuel.