Alternative fuel refers to any energy source used to power vehicles, ships, aircraft, or industrial equipment that serves as a substitute for conventional fossil fuels such as gasoline, diesel, or heavy fuel oil (HFO). These fuels are typically chosen for their potential to reduce greenhouse gas (GHG) emissions, enhance energy security, and support energy diversification.
Alternative fuels play a vital role in the decarbonization of the transport and industrial sectors, particularly in hard-to-electrify applications such as long-haul shipping, aviation, and heavy industry.
What qualifies as an alternative fuel?
Alternative fuels are defined by their non-conventional origin and/or lower environmental impact. They may be:
- Bio-based (e.g. biodiesel, bioethanol, biogas)
- Synthetic (e.g. e-methanol, e-diesel, e-kerosene)
- Gaseous (e.g. hydrogen, compressed natural gas – CNG, liquefied natural gas – LNG)
- Electricity-derived (e.g. electricity stored in batteries or used for hydrogen production)
- Renewable-based (e.g. fuels produced using green electricity)
Alternative fuels can be drop-in fuels, meaning they can be blended or fully substituted for conventional fuels without major changes to existing engines or infrastructure.
Common types of alternative fuels
Alternative fuels come in a variety of forms, depending on their origin, composition, and end-use. Below are some of the most prominent types currently in use or under development:
- Biofuels
Produced from organic materials such as agricultural waste, used cooking oil, or algae, biofuels are among the most established alternatives to fossil fuels.
- Biodiesel is commonly used in diesel engines, either pure or blended with conventional diesel.
- Bioethanol, often made from sugarcane or corn, is blended with gasoline and used in spark-ignition engines.
- Biomethane (or upgraded biogas) can replace natural gas in pipelines or power compressed natural gas (CNG) vehicles.
- e-Fuels (electrofuels)
These are synthetic fuels created by combining green hydrogen—produced through electrolysis using renewable electricity—with captured carbon dioxide (CO₂). The result is a family of liquid or gaseous fuels, such as:
- e-Methanol, e-Kerosene, and e-Diesel, which can be used in shipping, aviation, and heavy transport.
e-Fuels are classified as RFNBOs (Renewable Fuels of Non-Biological Origin) under EU legislation, and are valued for their drop-in compatibility with existing fuel infrastructure.
- Hydrogen
Hydrogen is a highly versatile energy carrier, used in both fuel cells (which produce electricity onboard) and, in some cases, combustion engines.
When produced using renewable electricity, green hydrogen emits no greenhouse gases at the point of use, making it a strong candidate for decarbonizing sectors like steelmaking, shipping, and heavy mobility. - LNG and CNG
While derived from fossil sources, liquefied natural gas (LNG) and compressed natural gas (CNG) are considered transitional fuels due to their lower CO₂ and pollutant emissions compared to diesel or HFO.
They are widely used in maritime transport, freight trucks, and public transport fleets. When combined with bio-LNG or synthetic methane, they offer further emissions reduction potential. - Ammonia
Produced from hydrogen and nitrogen, ammonia is a zero-carbon fuel at the point of use and is attracting interest—especially in the maritime sector—for its high energy density and ease of storage.
While its combustion can produce nitrogen oxides (NOₓ), technologies are being developed to minimize these emissions and ensure safe handling. - Electricity
Though not a “fuel” in the traditional sense, electricity plays a fundamental role in the shift toward zero-emission transport and industrial processes.
- Battery-electric vehicles (BEVs) rely on stored electricity for propulsion, ideal for light-duty and urban mobility.
- Electricity is also essential in the production of green hydrogen and synthetic fuels, serving as the backbone of many alternative fuel pathways.
Benefits of alternative fuels
- Lower GHG emissions: Many alternative fuels have lower lifecycle CO₂ emissions compared to fossil fuels.
- Air quality improvement: Reduce local pollutants such as sulfur oxides (SOₓ), nitrogen oxides (NOₓ), and particulates.
- Energy diversification: Reduce reliance on oil imports and increase energy security.
- Infrastructure compatibility: Many can be blended with conventional fuels or used with minimal modifications.
- Supports climate goals: Key enablers of carbon neutrality in transport, industry, and energy systems.
Challenges and limitations
- Availability and scalability: Production volumes are still low compared to fossil fuels.
- Cost: Many alternative fuels are currently more expensive, requiring policy support or subsidies.
- Infrastructure needs: New distribution, bunkering, or refueling systems must be developed.
- Sustainability concerns: Biofuels and synthetic fuels must meet strict criteria to avoid land-use impacts or unsustainable energy inputs.
- Technology readiness: Some fuels (e.g., green ammonia, hydrogen combustion) require further development and certification.
