Types of Alternative Fuels

Electric Car

There is a wide variety of alternative fuel types available in the United States. Each fuel is an option to replace gasoline and to reduce the emissions caused by the burning of gasoline in vehicles. Some alternative fuels also have industrial and residential applications as well. The benefits and limitations of these fuels are key to understanding how each of these fuels might be used.

An alternative fuel is a substance that can be used as a vehicle fuel other than traditional fuel sources such as oil, coal, natural gas and propane. Each fuel has a unique combination of benefits such as availability, vehicle compatibility, energy efficiency, cost and emission reduction.

Available Types of Alternative Fuel

The following alternative fuels are currently being developed and researched in the United States.


Ethanol is produced from corn which has been fermented and distilled. It is one of the most widely used alternative fuels in the U.S.

The American Coalition for Ethanol states that ethanol:

  • Has a high octane rating which results in increased engine efficiency.
  • Has a lower energy content than gasoline. This means that it takes more ethanol to go a certain distance than it would take with gasoline.
  • Can be used by gasoline vehicles in the U.S. in concentrations up to 10 percent.
  • Can be used in specialized cars and trucks known as Flexible Fuel Vehicles in concentrations up to 85 percent.
  • Is used as an additive to gasoline in many states, in concentrations of up to 10 percent.
  • Is offered in the Midwestern states as E85 fuel which is 85 percent ethanol and 15 percent gasoline.
  • Is widely used as an alternative fuel for farming.

Ethanol is used as an alternative fuel for aircraft. Aviation grade ethanol, (AGE-85) is an 85 percent ethanol blended fuel that is beginning to replace 100 octane low lead aviation gasoline, which has been the standard fuel for reciprocating engine aircraft since World War II. For more information about AGE-85, visit the alternative uses page at American Coalition for Ethanol. Ethanol has many industrial uses in personal care and household cleaning products as well.


Biodiesel is produced from soybeans, vegetable oil or used restaurant grease, that includes animal fat.


  • Does not contain any petroleum, but it can be blended with petroleum diesel to create a biodiesel blend.
  • Can be used in a diesel engine with a blend of 20 percent biodiesel and 80 percent petroleum without any modification to the engine.
  • Produces less unburned hydrocarbons and carbon monoxide than diesel when used in a diesel engine; is sulfur free and carbon-neutral.
  • Sunflower oil and palm oil are used to produce biodiesel fuels. They can be used in their natural form as a fuel if the vehicle has a vegetable oil fuel converter.

Biodiesel blends for home heating:

Biodiesel blends can also be used in a standard oil fired furnace or boiler, making it an alternative fuel source for heating residential homes. According to Amerigreen, if all households using heating oil used a B5 blend ( 5 percent biodiesel, 95 percent heating oil), 400,000,000 gallons of heating oil could be conserved. Small adjustments in fossil fuel consumption, when done on a grand scale, can make a significant impact on reducing greenhouse gas emissions.


Alternative Fuel

Propane is a byproduct in the production of gas and the refining of crude oil. Propane has been used as an alternative fuel since 1912 and is the third most common fuel in the United States. after gasoline and diesel. Most of the propane used in the United States is produced domestically, therefore using propane as an alternative to regular gasoline would reduce United States dependency on foreign oil and would increase energy security.


  • Is only about 85 percent as energy-effective as gasoline. This means that a vehicle will only go 85 percent as far as it would on an equal amount of gasoline,
  • Is price-competitive with gasoline
  • Is produced domestically
  • Does show a reduction in some greenhouse gas emissions

The Alternative Fuels Data Center reports that emissions from propane burning vehicles had:

  • A 20-40 percent reduction in carbon monoxide
  • An 80 percent reduction in particulate matter
  • A zero percent reduction in Volatile Organic Compounds (VOC)
  • A zero percent reduction in Oxides of Nitrogen (NOx)
  • A 10 percent increase in Methane

Compressed Natural Gas

Natural gas comes from gas wells. It is a form of fossil fuel and is not considered a renewable resource, however, it is considered an alternative fuel because it burns much cleaner than gasoline or diesel. According to the United States Department of Energy, the use of natural gas:

  • Reduces carbon monoxide emissions 90%-97 percent
  • Reduces carbon dioxide emissions 25 percent
  • Reduces nitrogen oxide emissions 35-60 percent
  • Potentially reduces non-methane hydrocarbon emissions 50-75 percent
  • Emits fewer toxic and carcinogenic pollutants
  • Emits little or no particulate matter
  • Eliminates evaporative emissions

Natural gas:

  • Requires refining before it can be used as a fuel for cars or homes
  • Can be produced at a relatively low cost

Natural gas fracking:

  • Is a process used to mine shale-rock derived natural gas. The environmental impact is highly controversial.

The Environmental Protection Agency has tested the emissions on light duty compressed natural gas vehicles and heavy duty compressed natural gas vehicles (such as city buses) to study the benefits of natural gas as an alternative fuel. You can read more about the EPA's emissions results at the Alternative Fuels Data Center website.

Hydrogen Fuel Cells

Most hydrogen is made from natural gas, but it can also be produced from water. A fuel cell uses a chemical reaction between hydrogen and oxygen to produce electricity. A "stack" of these fuel cells is required in a fuel cell vehicle.

Benefits of hydrogen fuel:

  • Can be produced domestically from several sources, reducing dependency on foreign oil
  • Produces nearly zero ozone-forming emissions, as it releases only water vapor into the air

With such incredible benefits as a fuel, you may be wondering why everyone isn't driving cars with hydrogen fuel cells. This is because there are significant challenges that must be overcome before hydrogen fuel cells can replace gasoline as a primary fuel source. The U.S. Department of Energy's fuel economy website states the problems with hydrogen fuel include:

  • It is cost prohibitive because of how expensive it is to produce
  • It is only available in a few places, mainly in California
  • Vehicles equipped with hydrogen fuel cells are much too expensive for the average consumer
  • It takes a significantly larger amount of hydrogen fuel to travel as far as the same amount of gasoline, making an onboard fuel storage a big problem

Future of Alternative Fuel Use

The wide-scale acceptance of these alternative fuel sources depends upon the cost and availability of new vehicles to burn these fuels and the acceptance of these new fuels by consumers. Tax incentives, lower usage cost per mile and wide-scale availability will all help consumer acceptance.

Was this page useful?
Related & Popular
Types of Alternative Fuels