Alternative fuels may seem like a new topic or new invention but in reality companies, organizations and individuals have been researching and developing new ways to power vehicles. In fact, regular gasoline has contained ethanol for some years now and many countries around the global are mandating minimum ethanol requirements. For example, Canada, the United States, Britain, Argentina and Brazil all require a certain percentage of ethanol to gasoline. And as time passes, each couple of years, the minimum increases.

So what are alternative fuels and how do they differ from fossil fuels such as gasoline, kerosene and diesel? These fuels have limited life spans in the sense that when all the oil supply is depleted fossil fuels will no longer exist. Contrarily, alternative fuels are sustainable resources made from various biodegradable substances such as sugar cane, wheat, and corn. Alternative fuels are normally produced from food sources, waste food products, plants and other organisms that can be replenished and continue to grow.

The most prominent alternative fuels in the automotive gasoline market are ethanol and biodiesel. In Canada and the US, ethanol, an alcohol, is typically made with corn or wheat. It is then mixed with gasoline to create a cleaner burning fuel. But the problem still lies with the gasoline portion. As long as gas can be produced, things are fine. But as soon as gas shortages begin, it will be necessary to turn to other fuels. Further, gas is harmful to the environment and to people due to the pollution and the smog. Again new, friendlier technologies are needed. Lastly, with the current state of the economy, gas prices are very high leading consumers to wonder whether better methods of fueling vehicles are available.

Countries who are enforcing minimum mixes of ethanol and gas are ranging from two percent to five percent to ten percent. Experts claim that fifteen to twenty percent of ethanol is the largest amount that can be mixed without having to physically change the mechanisms of present day vehicles. But there are already cars being manufactured that can take as much as eighty-five percent ethanol. The biggest problem is the starting of a vehicle. Apparently, using gas as an igniter is very easy but ethanol is more difficult.

Many areas are also trying to find alternative sources of ethanol than the standard sugar cane, wheat and corn based products. Mesquite, different sweet grasses, vegetable oil, palm oil, soybean oil, recycled cooking oil, and animal fat run-offs are all being researched. In addition to these fuels, other alternative fuels already exist and have been sold for years. Many taxi fleets and delivery trucks use propane as opposed to gas and there are also electric cars.

In the US, in 2003, the president allocated just over one billion dollars to the development of hydrogen powered vehicles, particularly lightweight cars, SUVs and small pickup trucks. And while the process is agreeably very slow, it is estimated that by 2020, there could be as many as two million hydrogen fueled vehicles on the road.

Conversationally, alternative fuels are also known by other names including bio fuels, biodiesel, agro-fuels, green gas, bio energy, and non-conventional fuels.