An alternative fuel is any material or substance used as a source of energy to power vehicles or stationary applications, substituting for conventional petroleum-based gasoline and diesel. These fuels are developed to improve energy security, reduce greenhouse gas emissions, and lessen reliance on finite fossil resources. When measured by the total volume of energy consumed globally in the transportation sector, biofuels are the clear leader. Biofuels, specifically ethanol and biodiesel, are the most widely used alternative fuels worldwide, primarily because of mandatory government blending requirements.
Biofuels: The Global Market Leader
Biofuels hold the top position in global alternative fuel consumption because they integrate seamlessly into the existing liquid fuel supply chain. In 2023, global production of liquid biofuels, including ethanol and biodiesel, exceeded 160 billion liters. This immense scale is largely driven by policy, as more than 60 countries have implemented mandates requiring a minimum percentage of biofuel to be mixed with traditional gasoline and diesel.
Ethanol, blended with gasoline, makes up the majority of this volume, reaching approximately 116 billion liters in 2023. The United States and Brazil are responsible for over 80% of the world’s ethanol supply, using corn and sugarcane as their primary feedstocks. Biodiesel, mixed with diesel fuel, accounts for the remaining volume, nearing 50 billion liters in global production. Feedstocks vary by region, relying heavily on soybean oil in the US, rapeseed oil and used cooking oil in the European Union, and palm oil in Indonesia.
Mandatory blending policies ensure continuous, high-volume demand, pushing biofuels far ahead of other alternatives. Directives like the US Renewable Fuel Standard and similar policies in the European Union and Brazil guarantee that billions of gallons are incorporated into the transportation fuel pool annually. This regulatory support enables biofuels to make up over 53% of the total alternative energy volume consumed in road transport compared to natural gas, propane, and electricity combined. This blending model allows existing vehicles to use the fuel without engine modifications, ensuring high market penetration.
Established Alternatives: Natural Gas and Propane
Beyond the immense volumes of biofuels, natural gas and propane represent the next tier of established alternative fuels with mature infrastructure. While their global consumption volume is significantly less than mandated biofuels, they play a meaningful role in targeted transportation and fleet sectors. These fuels offer compelling environmental and economic benefits, particularly for high-mileage commercial operations.
Natural Gas (CNG/LNG)
Natural gas is widely used in two forms: Compressed Natural Gas (CNG) and Liquefied Natural Gas (LNG). CNG is employed in medium-duty and light-duty fleet vehicles, such as transit buses and refuse trucks, which operate from a central refueling depot. LNG is cryogenically cooled to a liquid state, making it more energy-dense. This makes LNG a viable option for heavy-duty, long-haul trucking where greater range is needed. In 2023, natural gas used as a motor fuel in the United States alone reached 675 million gasoline gallon equivalents.
A growing trend involves the use of renewable natural gas (RNG), which is chemically identical to fossil natural gas but is derived from decomposing organic waste materials. RNG has gained significant traction, especially in the US, where it accounted for nearly 80% of all on-road natural gas vehicle fuel in 2023. The expansion of natural gas vehicle fleets in countries like China, particularly for heavy-duty trucks, continues to solidify its position as a global alternative fuel.
Propane (LPG)
Propane, known as Liquefied Petroleum Gas (LPG) or Autogas when used in vehicles, is one of the most popular alternative fuels outside of North America. Its ease of storage and transport makes it a practical option for passenger cars and smaller fleets, such as school buses and taxis. Globally, the number of vehicles running on Autogas exceeds 27 million.
Autogas consumption worldwide is substantial, with annual usage hovering around 25 million tons. It is particularly popular in countries like Turkey and South Korea, where a significant portion of consumer and taxi fleets utilize the fuel. Propane’s relatively low cost and cleaner-burning properties compared to gasoline and diesel make it an economically sensible choice for high-use vehicles. The existing global distribution network, which supplies propane for heating and cooking, facilitates its availability for the transport sector.
Next-Generation Alternatives: Electricity and Hydrogen
Electricity and hydrogen represent the forward-looking energy carriers of the transportation sector. However, their current volume of fuel consumed globally is still much smaller than that of established liquid and gaseous alternatives. These technologies are currently in a phase of rapid market penetration and infrastructure development, rather than high-volume consumption.
Electricity
Battery electric vehicles (BEVs) are experiencing the fastest growth in the light-duty passenger vehicle market, driven by advancements in battery technology and supportive government policies. However, electricity lags far behind biofuels when comparing energy consumption volume, due to the sheer scale of liquid fuel consumption. In 2024, the entire global electric vehicle fleet consumed approximately 180 terawatt-hours (TWh) of electricity.
In contrast, the 107 million tonnes of oil equivalent (Mtoe) of biofuel consumed in road transport in 2023 translates to approximately 1,244 TWh of energy. This illustrates that the total energy volume supplied by mandated liquid biofuels is currently several times greater than the electricity consumed by the global EV fleet. The energy source for electricity is grid-dependent, meaning the overall carbon intensity varies significantly based on a region’s power generation mix. Despite the lower current volume, the rapid sales growth of BEVs suggests electricity is set to become a dominant alternative fuel in the coming decades.
Hydrogen
Hydrogen, primarily used in Fuel Cell Electric Vehicles (FCEVs), is a potential solution for decarbonizing sectors difficult to electrify, such as heavy-duty, long-haul transport. FCEVs combine hydrogen with oxygen to produce electricity, with water as the only tailpipe emission. The current global fleet of FCEVs is small, numbering under 80,000 vehicles, mainly concentrated in a few key markets for passenger cars and commercial trucks.
The primary hurdles limiting hydrogen’s current volume usage are the high cost of production and the lack of widespread refueling infrastructure. Producing hydrogen, particularly “green” hydrogen using renewable electricity, is energy-intensive and expensive. Furthermore, the necessary pipeline and refueling station networks are only in nascent stages of development. While hydrogen holds promise for specific high-power, long-range applications, the total volume consumed today is negligible compared to other alternatives like biofuels and natural gas.