The Pros and Cons of 8 Green Fuels
Our dossiers detail which fuels are overrated—and which could power your next car
By Rick Newman
January 11, 2008
After years of talk, rising oil prices—combined with global-warming concerns and a disdain for foreign
oil—have finally set the stage for breakthroughs in alternative fuels. To see how the hottest new
technologies stack up, click on each fuel for a rundown of its attributes and flaws, or click on the topics
on the left to see how various fuels compare:
What is it?
A fuel derived from the sugars in corn and other plants. Pure ethanol is usually blended with gasoline.
"E10"—10 percent ethanol—is common today. E85—85 percent ethanol—is the highest practical blend;
some gas is still required for combustion in most climates.
A biofuel refined from cellulose, the fibrous material that makes up most of the plant matter in wheat,
switch grass, corn stalks, rice straw, and even wood chips.
A renewable fuel made from vegetable oil or animal fats, including soybeans, canola oil, and even used
cooking oil. It’s sometimes mixed with conventional, petroleum-based diesel to help cut down on
Diesel is refined from petroleum, like gasoline, but the pollution it produces is harder to control. "Clean
diesel" vehicles burn the fuel more efficiently and trap pollutants better. New low-sulfur diesel fuel also
pollutes less—much like unleaded gasoline, compared with leaded.
There are several kinds of hybrids. In general, today’s models have a battery-powered electric motor
that drives the car at slower speeds and a gas engine that kicks in at higher speeds. The engine also
helps recharge the battery, along with energy captured from the rotation of the wheels during
Same principle as for ordinary hybrids: There’s an electric motor and a gas engine, except that the
battery powering the motor would be recharged from an electrical outlet, at home or someplace else.
The motor would power the car until battery power waned. Then the gas engine or another secondary
power source would kick in.
Any car with a battery-powered motor—including every variety of hybrid—is an electric vehicle to some
extent. A pure electric vehicle would be run entirely by the battery-powered motor.
The concept is similar to hybrids: an electric motor would drive the car much of the time. In this case,
the motor would be charged by something under the hood called a fuel-cell stack, which converts
hydrogen and oxygen into electricity that flows to the battery. The on-board fuel would be hydrogen.
What's good about it?
It’s renewable, and corn is plentiful in the United States. Burning corn ethanol can cut greenhouse-gas
emissions by as much as 20 percent, compared with gasoline. Producing ethanol generates fewer
A lot. It’s renewable and can be made from nonfood plants. It also has much greater "energy bounce"
than gasoline or corn ethanol, which means it generates far more energy than it takes to produce.
Greenhouse-gas emissions are lower than those from gas, too.
Biodiesel is renewable, from domestic sources, and can be used with any diesel engine. It also has more
energy than gasoline, which raises mileage. Like ordinary diesel, it offers good torque characteristics in
cars, which drivers notice as power and acceleration.
Diesel contains more energy than gasoline, so cars get about 30 percent better mileage—with greater
torque, which drivers feel as low-end acceleration. The extra energy also makes diesels ideal for towing
heavy loads, which is why many trucks are diesel-powered.
Hybrid mileage can be 25 to 30 percent higher than that of ordinary gas-powered cars. That’s because
the electric motor, which requires no gas, does most of the work during driving conditions where the
gas engine is least efficient—like stop-and-go urban driving. Since they burn less fuel, hybrids emit fewer
greenhouse gases, too.
Powering the battery from the electrical grid could be much cheaper than gasoline. If owners charged
up overnight, they’d be tapping into off-peak power that costs utilities less—so some savings could be
passed on to consumers. Plug-ins could also get higher mileage than today’s hybrids, with fewer
As with plug-in hybrids, electric vehicles could be cheap to fuel, given the relatively low cost of electricity
drawn from the power grid through an ordinary outlet. Power drawn overnight at off-peak rates could
cost one-fourth the equivalent of gasoline.
Many things. Hydrogen is widely available, in natural gas and water, for instance. The only tailpipe
emission is water. Pound for pound, hydrogen fuel has more inherent energy than gasoline, which could
mean higher mileage: A prototype Honda fuel-cell vehicle gets the equivalent of nearly 70 miles per
What’s bad about it?
It contains one third less energy than gas, which means mileage is 30 to 40 percent lower. Massive
ethanol production could cause a shortage of corn available for food and destroy habitat. It could also
increase smog in urban areas.
There are few expected downsides—except that the technology doesn’t yet exist to mass-produce it. If
cellulosic ethanol becomes a widespread fuel, it would be a boon for agricultural regions—while nations
with little arable land would be left out.
Mileage is higher than for gasoline but a bit lower than for conventional diesels. And while it may help
reduce greenhouse-gas emissions, biodiesel may actually raise the levels of other pollutants. It can also
cause fuel-system problems in cars, especially at low temperatures.
The extra technology in clean diesels can raise the cost by $3,000 or more, compared with gas models.
And clean diesels still emit more smog-causing pollutants than the cleanest gas-powered cars. Producing
more low-sulfur diesel could also increase greenhouse-gas emissions from refining.
Big battery packs and other components can add $2,000 or more to the cost, compared with
conventional models, and it can take years to pay off the premium through lower gas bills. The batteries,
usually lodged in the rear cargo area, also reduce storage space. And the batteries in today’s hybrids
require nickel, which is costly.
The large battery packs would take up extra space, add weight to the car, and degrade performance—
and right now they’re too expensive and unproven for mass production.
The batteries required for an all-electric vehicle would be even bigger than those needed in a hybrid—so
big that the car would need to be designed around the battery. For now, they’d be very expensive, too.
While it can be extracted from water, the cheapest source of hydrogen is natural gas, an unrenewable
hydrocarbon. There’s no distribution system or standardized method of storage, which is crucial since
hydrogen fuel is a gas that must be kept under high pressure.
Where would it be most useful?
Mild blends are widely available. But E85—85 percent ethanol, 15 percent gas—is found only at about
1,500 filling stations in the United States., mostly in the Midwest. That number will grow, since the 2007
energy law mandates a fourfold increase in ethanol production by 2022.
Wherever it’s available. Once it’s produced, cellulosic ethanol will be the same as corn ethanol, fit for
any flex-fuel vehicle capable of running on E85.
For now, biodiesel seems most useful as a blend used in conventional diesel-powered automobiles.
Some enthusiasts retrofit their cars to run on pure biodiesel—although that can void the warranty and
cause other problems.
For large vehicles that generally get poor mileage and trucks used for heavy hauling. A number of states
with the toughest emissions requirements—like California, New York, and Massachusetts—effectively
ban older diesels, although clean diesels should meet their standards.
They’re great for people who take lots of short trips or drive frequently in traffic. At highway speeds,
there’s less of a payoff, since the gas engine does most of the work. Hybrids perform better in warm
climates than in cold ones, since low temps can degrade battery effectiveness.
As with hybrids in general, plug-ins would be best for people who make a lot of short trips or commuters
who drive frequently in traffic, since that’s when the battery-powered electric motor would be doing
most of the work.
They’d make most sense for commuters and others who typically drive short distances. Once the battery
charge is depleted, there’s no real advantage to an EV—since it has to run on a gas engine or some other
Fuel cells make sense for most types of vehicles. One enduring challenge is "cold start"— the ability to
power up at temps as low 30 below zero Fahrenheit—which means fuel cells are ill-suited for the
coldest climates. That may be resolved by the time other technology matures.
How much will it cost?
It’s often a bit cheaper than gas—but not a bargain, since mileage is lower. At $2.50 per gallon, for
instance, it takes about $3.30 worth of E85 to drive the same distance as a gallon of $3 gas. Cars must
also be specially outfitted to run on E85.
Unclear, because it’s not mass-produced yet, but estimates suggest it would be considerably cheaper
than gas on a per-mile basis—perhaps less than $1 per gallon.
Properly refined biodiesel tends to cost more than gasoline. But it varies. Some restaurants can be
persuaded to give away used cooking oil, which will power certain cars. If production ramps up, costs
should come down, but it’s not clear that will happen.
The price of diesel is usually a bit higher than gasoline, and new low-sulfur diesel is more expensive still.
Diesel engines cost more, too. Some drivers might recoup the extra cost through better mileage.
They can be pricey. At about $23,000, for instance, the Honda Civic hybrid is roughly $4,000 more than a
basic conventional model. The Lexus RX400h, at nearly $42,000, tops the comparable RX350 by about
$5,000. But there’s always some payback from lower gas bills, fewer refueling stops, and, in some cases,
Not sure, because the battery technology isn’t mature. But with the right batteries, plug-ins could be
cheap to fuel. At overnight, off-peak rates, the cost of electricity might be one-fourth what an equivalent
amount of gasoline would cost.
The electric-powered Chevy Volt, due in 2010, will have a price tag of about $30,000—with GM most
likely subsidizing the battery pack. Fueling it from home, however, could cost 80 percent less than filling
a car with $3 gas.
If mass-produced and widely distributed like gasoline, the cost of hydrogen fuel could be equivalent to
$2 per gallon or less. Plus, fuel cells are about three times as efficient as gas engines, which means
better mileage. But building an infrastructure to deliver hydrogen would cost billions, which would
certainly add to consumers’ cost.
When's it coming?
Ethanol has been around for many years but hasn’t caught on because the fuel isn’t widely available,
and for most drivers it’s more expensive on a per-mile basis. Virtually all cars can run on mild blends like
E10, and most automakers build E85-capable cars or plan to.
Five years, perhaps. It’s not quite around the corner, but it’s probably closer than hydrogen-powered
cars. Backing by big companies like General Motors—and the possibility of technology breakthroughs—
could speed adoption.
Refiners already produce about 250 million gallons of biodiesel per year—but that’s barely 1 percent of
all diesel consumed in the United States. And diesels themselves represent a small portion of the car
market here. The industry could gather steam if there are tax breaks or other subsidies.
A couple of clean diesels, like the Mercedes-Benz E320 sedan, are on the market now, with other
models from automakers such as Volkswagen, Audi, and Hyundai on the way.
By the end of 2008, there will be nearly two dozen hybrids on the market, including sedans, crossovers,
luxury makes, full-size SUVs, and pickup trucks.
Unknown. There’s not yet an affordable battery that can handle the deep charges and discharges that
would occur under normal use in a plug-in. Prototype lithium ion batteries—like those in power tools
and laptops—are promising, but it’s not clear if they can be scaled up for something as big as a car.
GM built an electric car in the 1990s—the EV1—that flopped because it had limited range, with no
backup engine, and carried just two people. Tiny Tesla Motors is building a $100,000 all-electric car, due
in 2008, using several thousand laptop-style lithium-ion batteries strung together. Stay tuned.
Could still be 10 or 20 years away. There are major technical hurdles in terms of producing the fuel,
distributing it widely, and storing it in cars.
What’s taking so long?
In some farm states, where the corn is grown, there are plenty of ethanol stations. But there are no
pipelines from there to major population centers, and the fuel hasn’t caught on nationwide because it
doesn’t really save drivers money.
It’s more difficult to break down the cellulose in plants than the starch that generates corn ethanol.
Researchers are working on new enzymes and manufacturing processes to make it easier and cheaper
to produce cellulosic ethanol.
Demand for biodiesel isn’t as strong as for other oil alternatives, partly because diesel engines represent
a small portion of the American car market. Even in Europe, where diesel cars are far more popular,
biodiesel fervor has faded because raising the right crops might cause deforestation.
Diesels are popular in Europe, where gas is more expensive, but in the United States, pollution problems
have relegated them to a small sliver of the car market. If clean diesels pass muster in California—which
sets the standards for several other states—the technology could make a comeback.
They’re available now. The next step will be "dual-mode" hybrids that have two electric motors, are
more efficient, and are more suitable for big SUVs and pickups that have four-wheel drive and heavy
towing capability. The first dual-mode hybrids are the Chevy Tahoe and GMC Yukon SUVs.
The battery technology. The nickel-metal hydride batteries used in today’s hybrids don’t hold enough
energy to be viable for plug-ins and can’t handle the deep charges and discharges needed. Lithium-ion
batteries might work, but nobody has mass-produced one that’s safe, reliable, and potent enough for a
The batteries. An EV battery pack must be able to withstand thousand of deep charges and discharges.
Lithium-ion batteries like those used in laptops, cell phones and power tools have the most potential—
but nobody’s mass-produced one big enough to power a car safely and reliably.
Researchers are still searching for cost effective ways to produce the fuel, transport it, and store it in a
car. An even bigger problem is building a hydrogen infrastructure comparable to a gas station on every
corner, which would cost billions and require the unprecedented cooperation of automakers, energy
companies, and the government.
Who’s doing it?
General Motors, Ford, and Chrysler build the most "flex-fuel vehicles," able to run on gas or any ethanol
blend up to E85. Converting new cars to FFVs on the assembly line costs less than $100; third-party
shops can convert existing cars for $1,500 or less.
Many small companies are producing it in labs, with the first large-scale plant set to start running this
year. Venture capitalists are interested, while General Motors and other automakers may also invest in
companies producing this fuel.
The strongest support for biodiesel comes from agricultural interests, such as the soybean industry.
Most of the big automakers haven’t shown significant interest.
Mercedes, Audi, VW, and other carmakers from Europe—where diesels are most popular—have the
most advanced clean-diesel technology. General Motors, Ford, and Chrysler use diesel engines in their
pickup trucks. Others plan to introduce clean diesels, too.
Toyota and Honda dominated the hybrid market for several years, but now virtually all manufacturers
plan to offer a lineup of hybrids.
Toyota, Ford, and other automakers are testing prototypes. Google, some municipalities, and a few
utilities are also working to convert conventional hybrids into plug-ins, along with enthusiasts
retrofitting their hybrids with lithium-ion batteries. (But don’t try this at home.)
GM has the most at stake, with multimillions of research dollars—and its credibility—committed to
delivering the Chevy Volt by 2010. Toyota and other carmakers are also doing extensive battery
research, as are battery suppliers.
Most of the big automakers have fuel-cell programs. GM has recruited ordinary consumers to test a
fleet of 100 fuel cell vehicles on the east and west coasts. Honda plans to lease a fuel-cell car, for about
$600 per month, to a few consumers in 2008. Others could announce similar programs.
Could it be a silver bullet?
Highly unlikely. Corn ethanol helps reduce greenhouse gases and is a renewable energy source. But it’s a
less potent form of energy than gasoline—and doesn’t really save drivers money, at current prices.
Maybe half a bullet. It’s renewable, would cut greenhouse gas emissions, and ought to be affordable—if
the technology develops. It still generates some pollution but far less than oil-based fuels do.
No. Even if production grew rapidly, it would still be limited to use in cars with diesel engines or unusual
modifications, and the benefits aren’t as promising as those of cellulosic ethanol or other alternatives.
But biodiesel could still help reduce greenhouse gases and petroleum use.
No. Since it’s a fossil fuel, even clean diesels are not an alternative to hydrocarbons.
Probably not. Today’s hybrids still require a gasoline-fed engine and two drive systems, which is less
efficient than a single power source. But hybrids are helping drive up fuel economy, propel battery
technology, and make consumers comfortable with newfangled cars.
Should the battery technology mature and plug-ins become viable, the math would be very compelling.
Some experts think plug-ins could get the equivalent of 100 miles per gallon. Powering them from the
grid would bring further savings, cutting the cost of fueling by 75 percent or more.
Researchers have their fingers crossed. If the battery technology matures, lithium-powered electric
vehicles could be a game-changer, with great driving characteristics, low tailpipe emissions, and super
cheap fuel. But big backers like GM. have guessed wrong before.
Maybe. If the technology matures, costs fall, and hydrogen fuel becomes widely available, it would solve
several problems: Hydrogen could come from renewable sources and generates no tailpipe emissions.
And theoretically, it would be affordable—maybe even cheap.