Alternative Fuels

More than a dozen alternative and advanced fuels are in production or use today. Although government-regulated and voluntary private fleets are the primary users of these fuels, consumers are increasingly more interested in them. Using these fuels is critical to reduce U.S. dependence on foreign oil and improve air quality.

The Energy Policy Act (EPA) of 1992 defined seven alternative fuels that are or have been commercially available for vehicles, and these are described briefly below. For more detailed information, click on the fuel you wish to learn more about.


Biodiesel is a renewable alternative fuel produced from a wide range of vegetable oils and animal fats and is a cleaner-burning replacement for petroleum-based diesel fuel. Pure biodiesel or biodiesel blended with petroleum diesel can be used to fuel diesel vehicles, providing energy security and emissions and safety benefits. It is non-toxic, biodegradable and has physical properties similar to those of petroleum diesel.


Electricity can be used to power all-electric vehicles and plug-in hybrid electric vehicles directly from the power grid, and power can be stored in the vehicle’s batteries. Vehicles that run on electricity produce no tailpipe emissions. The only emissions that can be attributed to electricity are those generated in the production process at the power plant. Electricity is easily accessible for short-range driving.

Home recharging of electric vehicles (EVs) is as simple as plugging them into an electric outlet. Electricity fueling costs for electric vehicles are reasonable compared to gasoline, especially if consumers take advantage of off-peak rates. However, electricity costs vary across the U.S. depending on location, type of generation, and time of use.


Ethanol is a renewable fuel made from various plant materials, which collectively are called “biomass.” Ethanol contains the same chemical compound (C2H5OH) found in alcoholic beverages. Nearly half of U.S. gasoline contains ethanol in a low-level blend to oxygenate the fuel and reduce air pollution. Ethanol is also increasingly available in E85, an alternative fuel that can be used in flexible fuel vehicles. Studies have estimated that ethanol and other biofuels could replace 30% or more of U.S. gasoline demand by 2030.


Hydrogen has the potential to revolutionize transportation and, possibly, our entire energy system. The simplest and most abundant element in the universe, hydrogen can be produced from fossil fuels and biomass and even by electrolyzing water. Producing hydrogen with renewable energy and using it in fuel cell vehicles holds the promise of virtually pollution-free transportation and independence from imported petroleum. Major research and development efforts are aimed at making hydrogen vehicles practical for widespread use.


Methanol, also known as wood alcohol, can be used as an alternative fuel. The use of methanol has dramatically declined since the early 1990s, and auto makers are no longer manufacturing vehicles that run on it. As an engine fuel, methanol has similar chemical and physical characteristics as ethanol.

Natural Gas

Natural gas is a domestically produced alternative fuel and is readily available to end users through the utility infrastructure. It can produce significantly fewer harmful emissions than gasoline or diesel when used in natural gas vehicles. Natural gas has a high octane rating and excellent properties for spark-ignited internal combustion engines. It is non-toxic, non-corrosive and non-carcinogenic and presents no threat to soil, surface water or groundwater.

Natural gas accounts for approximately one quarter of the energy used in the United States. Of this, about one third goes to residential and commercial uses, one third to industrial uses, and one third to electric power production. Only about one tenth of one percent is currently used for transportation fuel. Because of the gaseous nature of this fuel, it must be stored onboard a vehicle in either a compressed gaseous (compressed natural gas, CNG) or liquefied (liquefied natural gas, LNG) state.


Propane, also known as liquefied petroleum gas (LPG), is used by many fleets. It has a high energy density, giving propane vehicles good driving range, and propane fueling infrastructure is widespread. Propane has a high octane rating and excellent properties for spark-ignited internal combustion engines. It is non-toxic and presents no threat to soil, surface water, or groundwater.

Propane is produced as a by-product of natural gas processing and crude oil refining. It accounts for about 2% of the energy used in the United States. Uses include home and water heating, cooking and refrigerating food, clothes drying, powering farm and industrial equipment, and drying corn. Less than 2% of U.S. propane consumption is used for transportation fuel.

Pure Plant Oil (PPO) Fuel

Pure plant oil used as engine fuel has potential for the most comprehensive ecologic, economic and social benefits of all biofuels. The production involves few process steps and is economical on a small scale. The production process leads only to small energy losses because no thermal or chemical process steps are involved, and it can be implemented in decentralized small units without losing cost-effectiveness. The non-toxicity and the low flammability are further advantages from a logistics point of view.

A niche fuel at present, the path to commercial implementation of PPO will require the development of a PPO fuel standard and demonstration of viability on a fleet scale; PRCC and member-partners are currently working on developing case studies, fuel standards and emissions testing of PPO fuel.

Helpful Documents & Links

Looking for more information about alternative fuels and related topics? Check out some of these documents and links!