Ethanol-blend fuels and diesel fuels are both susceptible to the buildup/accumulation of water, and both of these fuels experience problems of concerns as a result. As a fuel user, how does this affect you?
Ethanol has a chemical attraction to water and any ethanol blend, whether 10% or 15% or more, will absorb water from the air and pull it into the fuel. All ethanol blends can absorb a certain amount of water, but when the water from the air exceeds what the fuel can absorb, you get a phenomenon called "phase seperation". The previously-absorbed water will fall out of solution and it will pull some or most of the ethanol out of solution with it. You end up with a layer of water & ethanol at the bottom of the tank or container (the water-ethanol sink to the bottom because they are heavier than gasoline). Meanwhile, the gasoline left behind is poor quality because when the water and ethanol fall out of solution, they will strip much of the octane rating from the gasoline. So instead of a tank full of high-quality E10 or E15 blend fuel, you finish with a tank of water and ethanol on the bottom and poor quality, low octane gasoline on top.
Functionally, this is a problem because the engine won't run properly on this low-octane gasoline. The worst case scenario, however, is that the fuel line will suck some of the water-ethanol in the combustion chamber, with severe engine damage as the result.
So you can see why it's important to keep this from happening.
Diesel fuel problems with water tend to be caused more by their long-term storage than by any chemical interaction with water. Storage of diesel leads to condensation of water in the storage tank, with the water settling on the bottom of the tank. When this happens, you can get:
Controlling water buildup to head off these problems in ethanol and in diesel is typically done by a couple of avenues.