Ethanol is more powerful than Petrol/Gasoline even though it has less energy density simply because it doesn't Ping ,Pink, or knock. And when used in an engine/motor of higher compression it’s more thermodynamically efficient
Hybrids are petrol cars that have their fuel pump and injectors uprated, they need to be because the compression is half what it should be. If you don’t increase the compression you need to upgrade the fuel pump and injectors
Although the check engine light will come on, this is only because the O2 sensor is detecting more O2 than it expects.
Bio-fuels are slight solvents, that's why they clean the whole engine, they clean away all the bad things fossil fuels has left behind in the years you had to use it. With diesel engines you just put bio-diesel in change the fuel filters after a week and away you go. With petrol engines you'll be using ethanol. Ethanol is very hydroscopic it wants to grab every molecule of water at can. Changing the fuel filters after a week should be fine too.
Now you've decided to use ethanol you need to optimise the engine by fitting pistons to increase the compression. Otherwise you'll have only done half the job. Whatever you do it'll never pink, higher compression means greater mileage, and more power
Fossil fuels are a obviously finite resource eventually we'll run out, but any bio-fuel is a renewable resource they'll be there to use as long as we can think up ways to make them. As I read the UK duty regulations any one should be able to claim back the duty on any bio-fuel you've paid duty on up to the point you have used more than 25,000 litres per year.