Do not put any Ethanol fuel in until you have worked through or pumped out the old fuel. See paragraph three for why.
Personally, I would have the tank pumped out and start fresh. If you do, you can run 10% Ethanol, or Non-ethanol fuel. Three year old gas is pretty old even if treated, and it has had a lot of time to accumulate water. May also have some breakdown into varnish. (how does it smell?)
I have the carbureted version of your engine, and I run 10% Ethanol all the time. However, I did have a problem when I first purchased the boat and converted to Ethanol. The previous owner had run only non-ethanol, and had also allowed some water into the tank because he did not have an O-ring on the fuel cap. The first time I put 10% Ethanol in, it absorbed the water from the bottom of the tank and caused problems until I had it pumped out. No problems since then (3 years and counting).
There are also some known issues with Ethanol and the high pressure fuel pumps used with the fuel injection system. This is for a certain range of years, where Volvo Penta painted the pumps inside and out. The Ethanol would dissolve the paint on the inside, which would cause problems and fuel pump failure. I don't think your 1997 engine would be part of those years affected (but somebody else might know for sure).
Ray
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"Knot Easy" 2000 Horizon 240 Volvo 5.7GS /SX
tow: 2017 Honda PILOT EXL-AWD
prev. boats:
'87 Chaparral 198CXL 4.3 OMC Cobra
'69 Jetstar 16ft Ski Boat, 115hp Yamaha
'68 Aluminum Jon Boat, 3hp Sears
'64 Water Wings