Alternative Fuel Types Currently Available on the Market

alternative fuel types

There are many other alternative fuel that we can use to power vehicles while reducing harmful emissions in place of the not-as environmentally friendly options of natural gas and propane. Some of these alternative fuels are still at the developmental phase while others are already in production.

As consumers and contributors to the emissions that are pumped into our environment every day, know what the different alternative fuel types, what they are made of, the types of cars that can use them, and their benefits is important. It’s also helpful to know about the federal incentives offered for each of these fuel types.


  • Biodiesel: This is a renewable natural alternative to petroleum diesel and is generated from organic matter like animal fat, vegetable oils and other waste matter like restaurant grease. This fuel can be used on most diesel engines but usually as a blend with petroleum diesel. Compared to petroleum diesel, this fuel is safer for the environment due to its significantly lower carbon emission rate. Although the price of biodiesel may vary slightly from state to states, it is generally sold at an average price of between $2.42/gallon and $3.36/gallon (depending on the blend percentage). If you own this type of alternative fuel vehicle, you may enjoy such perks as access to the HOV lane even with single occupancy and a bio-diesel tax credit among other things.


  • Electricity: Generated from both renewable and non-renewable sources, electricity powered vehicles are one of the most popular forms of alternative fuels. There are three major categories of vehicles that can be run on electricity: hybrid electric vehicles (HEVs), plug-in hybrid electric vehicles (PHEVs) and all-electric vehicles (EVs). In addition to a remarkable reduction in the rate of carbon emission, using electrify as a fuel for your vehicle also helps to improve fuel economy (in HEVs and PHEVs) as well as increasing overall energy security. Vehicles can be recharged at an average price of $0.12/kWh. Owners of EVs can enjoy a few state and federal incentives including reduced fees when renewing vehicle registration and unrestricted HOV lane access.


  • Ethanol: Made from corn, sugar cane and other plant materials, ethanol is another renewable alternative fuel that is gaining tracking in use in many states. Ethanol is usually used as a blend with gasoline (E15 and E85) for vehicles with specially adapted engines. These vehicles are usually referred to as flexible fuel vehicles (FFVs). Among other benefits, use of ethanol a fuel helps to guarantee energy security and to reduce emission of greenhouse gases. Across the US, ethanol for vehicles is sold at an average price of $3.07/gallon. Many incentives are sponsored by federal and state government which support the production and distribution of ethanol through grant programs, government backed loans, and more.


  • Hydrogen: Although the use of hydrogen as a fuel for vehicle is still at the developmental stage, a lot is being done to fast track its commercialization as an alternative fuel. It can be generated from different sources including water, hydrocarbons, and other organic materials. It is used to power the engines of special vehicles known as fuel cell electric vehicles (FCEVs).  FCEVs are beneficial to the environment since they do not emit any harmful exhaust fumes. Furthermore, they contribute towards ensuring energy security for the US. Federal incentives come in the form of research loans and grants, tax credits, counterpart funding for research projects, and various other incentives.


  • Others: Also to be considered are other types of fuel that are still at the infancy stage of development for use in vehicles. Considering existing laws and legislations on the classification and use of alternative fuels, these fuels may eventual be introduced into the mainstream US energy market.
  • Biobutanol: Like ethanol, this 4-carbon alcohol is produced from biomass products like corn and sugar beets through a fermentation process. When blended with gasoline, it can be used as a transportation fuel.
  • Renewable Hydrocarbon Fuels: Produced from biomass sources through a variety of biological and thermochemical processes, this fuel type provides mass engine and infrastructure capability. This means that existing gasoline stations can house and dispense biogasoline or green-diesel (not to be confused with biodiesel) to vehicles with standard gas or diesel engines.


Although most of these alternative fuels are mainly used by government and operators of private-sector vehicle fleets, private individuals are rapidly buying into the idea as can be seen from the increase in the number of alternative fuel vehicles. Despite commentary to the contrary, the environment and the US economy will benefit massively from an increased use of these renewable alternative fuels.  

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