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Alternative Fuels

Road Rail Air Water

This page compares the physical and environmental properties of existing and alternative fuels. For a summary of current regulations dealing with alternative fuels and alternative fuel vehicles, see the TERC page on Alternative Fuels – State Regulations.

Since the decline of the coal-powered steam locomotive, all modes of transportation have been fueled primarily by petroleum products (gasoline, diesel fuel for road, rail, and marine freight, and jet fuel). Over the past decade, a small but growing fraction of oil-based fuel has been replaced by biobased alternatives like ethanol from corn, or biodiesel from soybeans. This trend has been largely driven by government policy (less dependence on imports, lower emissions), rather than economics. But newly developed domestic sources of natural gas may promote the first market-driven change to a nonpetroleum alternative.

Vehicles designed to run on alternative fuels are becoming available for a growing range of applications. This page provides a brief summary of the environmental and regulatory issues associated with several fuel types.

Existing emissions regulations are directed primarily toward diesel fuel, but will probably set the baseline for alternatives. In the future, regulations and regulatory incentives will probably be established for alternatives as they gain a significant share of the market.

Who is covered by the regulations?

If recent history is any guide, fuel efficiency or emissions standards that are specifically developed in response to the growing use of particular alternative fuels are likely to directly affect either the producers of the fuels or engine and vehicle manufacturers. Owners and operators of vehicles will be affected only indirectly by the regulations.

Introducing some kinds of alternative fuels and equipment into a fueling facility may require a review of facilities and procedures to ensure compliance with environmental and safety regulations that may not have been a concern for strictly gasoline or diesel-based operations.

What is the purpose of the regulations?

The choice of transportation fuels has significant environmental impacts, both local and global. Vehicle emissions can strongly affect local air quality, especially in areas where many vehicles are concentrated. In addition, because transportation depends on large quantities of material and energy, fuel choices can significantly alter resource availability and greenhouse gas emissions on a global scale.


There is no way to predict the future of environmental regulation of alternative fuels, but an understanding of the issues involved may help in evaluating the potential benefits and risks associated with each fuel. This section begins with an overview of the leading alternatives, and outlines how environmental concerns could affect the regulatory landscape for each of them.

For the purposes of this discussion, fuel systems are classified into three categories: liquid, gas, and electric. ("Liquid" and "gas" refer to the fuel's phase at ordinary atmospheric temperatures and pressures, not necessarily to the phase in which it is stored on board the vehicle - liquefied natural gas is grouped with the gas-phase fuels.)

  • Liquid fuels include gasoline and diesel fuel, as well as ethanol and other alternative liquids
  • Gas-phase fuels include natural gas and propane, as well as hydrogen and other alternative gases
  • Electric power includes battery only and hybrid vehicles

In general, liquid fuels tend to be more compatible with existing infrastructure than the other types, although some modifications may be necessary (ethanol attacks some materials that are unaffected by diesel fuel, for example). Converting to gas-phase fuels requires different storage and delivery equipment from liquid fuels, but gas-phase fuels can generally be used in existing engine designs (with modifications, but not necessarily radical redesign). Converting to electric power requires extensively redesigned vehicle power systems, but can use the existing electrical distribution system.

The table below lists the most widely used fuels in each category, and indicates how each fuel compares to diesel in three environmental impact areas:

  • Air quality, affected by tailpipe emissions as the vehicle is operating
  • Resource depletion, affected by fuel efficiency
  • Global warming potential, affected by all of the greenhouse gases emitted over the entire fuel life cycle

Vehicle emissions

Fuel efficiency

Life-cycle GHG emissions

Liquid fuels


uncontrolled emissions higher in hydrocarbons and carbon monoxide, lower in nitrogen oxides and soot than diesel; controlled emissions (as of 2010) comparable

lower than diesel (spark ignition less efficient than compression)

somewhat higher than diesel, due to lower fuel efficiency




baseline; can also be made from renewable sources (e.g. biodiesel from soy) or wastes


lower hydrocarbons, particulates, CO, and NOx

intrinsically lower (heat of combustion)

can be made from renewable sources (crops grown with standard agricultural practices have questionable GHG benefit; cellulosic sources potentially better)

Gas-phase fuels


lower than older diesel; comparable to 2010 diesel standards

lower: larger, pressurized fuel tanks add weight to vehicle

somewhat higher than diesel due to lower fuel efficiency


lower than older diesel; comparable to 2010 diesel standards

lower: larger, insulated fuel tanks add weight to vehicle

higher than diesel due to lower fuel efficiency, methane release


lower than older diesel, greater than natural gas

between diesel and natural gas

between diesel and natural gas


essentially zero tailpipe emissions

lower: larger, pressurized fuel tanks add weight to vehicle

can be made from renewable sources

Electric power


essentially zero tailpipe emissions

better than diesel (combined efficiency of generating power, charging battery, and converting to motion better than direct fuel burning in combustion engine)

better than diesel for operation (higher efficiency), but questionable if replacement battery manufacture is included in calculation

plug-in hybrid

lower than diesel, since combustion engine is used less

better than diesel, largely due to regenerative braking

combustion fuel can be made from renewable sources


Domestic vs. foreign

Fuels, both conventional and alternative, can be produced either from domestic or from foreign sources, but the environmental consequences of that distinction are less clear-cut than for renewable vs. nonrenewable. While fuel from renewable sources will generally have a lower life-cycle global warming potential than the same fuel from fossil carbon, it is hard to draw a corresponding conclusion between domestic and imported fuel. The comparative life-cycle environmental impacts of domestic and imported fuel will depend on factors such as how the fuel is extracted and processed, and how far it must be transported. Because the impact calculations are currently uncertain, it is hard to see how the geographical origin of a fuel can be used as the basis for environmental regulation. Any future regulations on vehicle operations that differentiate between domestic and foreign fuel sources are more likely to be driven by policy considerations than by environmental factors.

As the table shows, several of the alternatives involve tradeoffs between air quality and greenhouse gas impacts. Tradeoffs are unavoidable if improvements in tailpipe emissions are achieved through control devices - the weight of the devices and the energy they consume will necessarily decrease fuel efficiency and increase greenhouse gas emissions to some extent. Depending on where the balance is struck, future regulations may provide incentives to use some fuels and penalize others.

Air quality regulation is well-established for gasoline and diesel fuels. Most of the alternatives tend to have intrinsically lower emissions coming from the engine (before passing through control systems) than gasoline and diesel, and most can already pass 2010 standards. If future regulations tighten tailpipe emissions standards further, the additional burden should not pose any more difficulties for the alternatives as for gasoline and diesel.

In contrast, regulation of global impacts, and specifically of greenhouse gas emissions, is still in an early stage of development. Among other challenges, it is much easier to measure tailpipe emissions from an engine than it is to evaluate the greenhouse gas emissions from the life cycle of a fuel (including the emissions from the processes used to produce the fuel, in addition to emissions from the vehicle). Future greenhouse gas standards may cover vehicle emissions only, or may attempt to incorporate more of the fuel life cycle. In the latter case, fuels from renewable sources might have an edge over non-renewable fuels. Virtually all of the fuels in the table can be derived from renewable sources, but some are harder to derive than others. (As a rule, the shorter the carbon chain, the easier a fuel is to produce. Methane and ethanol are more readily produced from waste plant material or consumer wastes than gasoline and diesel, for example.)

Vehicles powered by natural gas can potentially emit less greenhouse gas than diesel-powered vehicles, but whether the potential can be fully realized in practice is an open question. When burned, natural gas produces more energy with lower carbon emissions than diesel fuel (almost 30% lower per unit of energy). But currently available diesel engines are more efficient than engines burning natural gas, which tends to negate that advantage.

Different alternatives for different modes

Each transportation mode, road, rail, air, or water, has features that affect which alternative fuels are suitable replacements for that mode. For example, the weight of the fuel, including the equipment needed to store the fuel on board and deliver it to the engine, is a decisive factor for air transport, and an important factor for road, but is not as critical for rail and water. The following sections list specific considerations for each mode individually.


For vehicles powered with liquefied natural gas, unscheduled delays can result in the need to vent fuel to the atmosphere. If as little as 2% of the onboard fuel is lost in this way, natural gas loses its natural carbon footprint advantage. For long-distance vehicles, compressed natural gas does not provide adequate driving range. Instead, natural gas is chilled to a very low temperature and stored on board the vehicle in liquid form in insulated tanks as liquefied natural gas, or LNG. As the tank gradually warms, gas must be vented to keep the pressure in the tank within safe limits. The chief component of natural gas, methane, is a powerful greenhouse gas, over twenty times more effective in trapping heat than an equal weight of carbon dioxide. Doing the math, it turns out that the potential 30% lower GHG emission rate per energy unit of natural gas compared to diesel is completely negated if as little as 1.8% of the methane is lost to venting. Operators who want to factor greenhouse gas emissions into their tradeoff calculations should keep that number in mind, remembering that any unanticipated delay in a scheduled arrival could result in extra venting. The “tank to wheels” carbon footprint of most fuels depends primarily on engine technology. But for natural gas, the carbon footprint will also depend significantly on logistics.

For maximum environmental benefit from conversion to natural gas, convert vehicles operating in densely populated areas first. Engines designed to run on natural gas are not yet as fully developed as engines burning conventional diesel fuel. As the technology is optimized, the two potential environmental advantages of natural gas can be more fully realized. But note that the advantages, cleaner burning (lower toxic emissions), and more energy delivered per carbon dioxide emitted (lower greenhouse gas emissions) refer to the engine exhaust only. The potential for methane venting, particularly from vehicles fueled by liquefied natural gas, will also play a role, and as noted above, will act to negate the greenhouse gas advantage. As far as toxic emissions are concerned, methane venting may have less of an influence. The health impacts due to hydrocarbon emissions associated with liquid fuels like diesel fuel result largely from their role in promoting the formation of ozone. Methane is less apt than heavier hydrocarbon residues to form ozone. So although even a small amount of methane venting is enough to wipe out its carbon footprint advantage over diesel, natural gas is likely to remain preferable to diesel from the standpoint of toxic emissions even if a moderate amount of venting is unavoidable. Toxic emissions have their greatest impact in densely populated areas. If natural gas continues to power an increasing share of the truck sector, the environmental impact of that displacement would be minimized if conversion to methane were to occur primarily for vehicles that spend a lot of time operating in and around cities, especially those in ozone non-attainment areas.


Rail begins with a major operational advantage over road: low rolling resistance and less need for starting and stopping gives trains the ability to move loads with significantly greater fuel efficiency than an equivalent fleet of trucks. Moreover, since fewer humans are required to move the same load, fuel costs take a proportionally larger share of the operating expenses for rail, providing even greater incentives for rail operators to invest in fuel efficiency. And in fact, between 1980 and 2001, the average number of ton-miles of freight moved per gallon of fuel consumed increased by an impressive 40%, largely through a combination of improved technology and better scheduling (according to a report, Railroad and Locomotive Technology Roadmap, from the U.S. Department of Energy).

Current technology can provide lower toxic emissions, or lower greenhouse gas emissions, but not both. The control measures necessary to decrease the major pollutants of concern from large locomotive engines – nitrogen oxides (NOx) and soot – consume some of the power that would otherwise go into turning the wheels. Further improvements in engine and control technology will continue to lower emissions in coming years, but a tradeoff between air quality and fuel efficiency seems unavoidable. Since fuel efficiency and carbon emissions go hand in hand, improvements in toxic emissions will have to be traded off against improvements in carbon emissions. (See the TERC page on Locomotive Engine Emissions for more information on NOx and soot reduction regulations.)

Several alternative fuels, including natural gas, are being evaluated for feasibility for rail transport. At present, interest in these fuels is driven primarily by economics and by concerns about the future availability of petroleum-based products, but environmental impacts and potential future regulations are also being taken into account.

Alternative fuels may help reduce soot emission levels, but will have less effect on NOx levels. Soot formation depends to some extent on the chemical composition of the fuel. In contrast, nitrogen oxide formation is the result of high temperatures in the engine. Large engines are more difficult to cool than smaller engines, regardless of how they are fueled.


Drop-in replacements for jet fuel are the only practical alternatives for air transportation. Aircraft in the foreseeable future will continue to use liquid hydrocarbon fuels, but an increasing proportion of the fuel will be derived from renewable or other nonpetroleum sources. Both commercial and military stakeholders are evaluating potential alternatives.

More information on biofuel use on commercial flights can be found in the Wikipedia article on Aviation Biofuel.


The tradeoffs between global warming and other impacts are particularly complicated for marine engine emissions. Marine engines use fuel containing levels of sulfur far higher than would be acceptable on land. Highway and locomotive diesel fuel is generally limited to 500 parts per million (ppm) of sulfur. Marine diesel can range up to 5% (50,000 ppm) sulfur. New standards aim to reduce marine diesel limits to 5,000 ppm by 2020, significantly lower, but still ten times the highway fuel standard. (Ships operating in certain designated Emission Control Areas will be subject to tighter limits – see the TERC pages on Diesel Fuel Requirements and Diesel Fuel Requirements (Marine Engines) for more information.)

The direct impacts of sulfur emissions include toxicity to people (primarily as a lung irritant) and to the environment (as a major component of acid rain). But as far as global warming issues are concerned, sulfur emissions have a net cooling effect: after being released into the atmosphere, sulfur oxides react to form droplets of sulfuric acid. As long as the droplets remain suspended in the atmosphere, they reflect sunlight away from the earth’s surface, countering the heat-trapping effect of carbon dioxide and other greenhouse gases. Alternative fuels are typically lower in sulfur than petroleum based fuels, and their increased use will help improve the toxic emission impacts from water transportation. But the net greenhouse warming due to marine engine emissions will inadvertently increase as a result.

EPA Resources

U.S. EPA -- Office of Transportation and Air Quality Contacts. This contact list contains the names and telephone numbers of U.S. EPA employees who can answer your specific regulatory questions regarding alternative fuels.

The EPA provides an information page on converting engines to run on alternative fuels, and on making sure that the engine remains in compliance with fuel efficiency and emissions regulations.

40 CFR 85.501. Exemption of Clean Alternative Fuel Conversions From Tampering Prohibition.

More Resources

A variety of regulations involving fuels are covered on other topic pages on the TERC website. Topics include:

detailed analysis of alternative fuels for buses is also available from the Transportation Research Board of the National Academies of Sciences.

The Alternative Fuels Data Center of the U.S. Department of Energy provides a page with information on emissions from natural gas vehicles.

An analysis of the impacts of the effects of global warming caused by each of the transportation modes, road, rail, air and water, appears in an article in the Proceedings of the National Academy of Sciences, v. 05, no. 2, pp. 454-458 (2008).