Alternative fuels for the future: what will power transport and industry next?

The leading alternative fuels for the coming decades are battery-electric power, green hydrogen and its derivatives (ammonia, e-methanol, e-kerosene), advanced biofuels (renewable diesel/HVO, sustainable aviation fuel, cellulosic ethanol), biogas/renewable natural gas, and synthetic drop-in e-fuels—each suited to specific sectors and use cases. As governments push toward net‑zero, the mix will vary by region based on resources, infrastructure, and policy, with batteries dominating light-duty road transport, low-carbon liquids leading in aviation, methanol and ammonia rising in shipping, and hydrogen gaining in heavy transport and high-heat industry.

The main alternative fuels and energy carriers

This list outlines the principal contenders, how they are produced, where they fit best, and the key advantages and trade-offs that will shape their adoption between now and 2050.

• Battery-electric power (BEV): Electricity stored in batteries and charged from the grid or renewables. Highest well-to-wheel efficiency for vehicles, rapidly falling costs, and expanding charging networks make BEVs the front-runner for cars, vans, city buses, and an increasing share of heavy trucks with megawatt charging. Biggest constraints are charging buildout, grid upgrades, and range/weight for the longest-haul duty cycles.
• Green hydrogen (H2): Produced via electrolysis with renewable power. Used directly in fuel cells or combusted for high-heat applications. Strategic for long-haul trucks in some corridors, mining, rail in non-electrified regions, and hard-to-abate industry (steel, chemicals, refineries). Adoption hinges on cheap clean electricity, stringent carbon accounting, and extensive new infrastructure.
• Ammonia (NH3): A hydrogen carrier and potential zero-carbon fuel for shipping and power. Can be made “green” from renewable hydrogen and nitrogen. Pros: no onboard carbon, established global trade. Cons: toxicity, NOx control requirements, and engine/marine fuel system readiness—commercial engines are emerging, with first deployments beginning mid‑2020s.
• Methanol (biomethanol and e-methanol): Liquid fuel for ships and some niche road uses. Rapidly growing orderbook of methanol-capable vessels; climate benefits depend on sourcing (biogenic or e‑methanol from green H2 and captured CO2). Easy handling and lower toxicity than ammonia, but global supply of genuinely low‑carbon methanol must scale dramatically.
• Sustainable aviation fuel (SAF): Low-carbon drop-in jet fuels from waste fats/oils (HEFA), alcohol-to-jet, biomass gasification/FT, or power-to-liquids e‑kerosene. Essential for decarbonizing aviation, with mandates in the EU and incentives in the U.S., though current supply is limited and costs are higher than kerosene; blending will rise through the 2030s as plants scale.
• Renewable diesel (HVO) and advanced biodiesel: Drop-in or near drop-in fuels for existing diesel engines, valuable for heavy-duty fleets and off-road equipment. Limited by sustainable feedstocks; best used in targeted sectors and regions until cellulosic and waste-based pathways scale further.
• Cellulosic ethanol and advanced alcohols: Produced from agricultural residues or dedicated energy crops with stronger sustainability profiles than starch/sugar ethanol. Can serve as blending components for gasoline or as feedstock for SAF (alcohol-to-jet). Commercial volumes are growing but remain modest compared with conventional biofuels.
• Biogas/renewable natural gas (RNG)/biomethane: Upgraded methane from organic waste streams for pipeline injection or vehicle fuel. Useful for waste and transit fleets and for dispatchable power; climate benefits depend heavily on methane leakage control and careful accounting.
• Drop-in synthetic e-fuels (e-diesel, e-gasoline, e-jet): Made from green hydrogen and captured CO2. Compatible with today’s engines and infrastructure, but energy- and cost-intensive; best reserved for aviation, legacy fleets, and regions where direct electrification is difficult.
• Renewable propane and renewable DME: Byproducts or dedicated renewables (e.g., from HVO or biomass) that can replace LPG or blend into diesel use; promising for off-grid, cooking, and some heavy-duty niches, with growing pilot deployments.
• Emerging concepts: Metal fuels (e.g., iron, aluminum powders burned and recycled), hydrogen carriers like liquid organic hydrogen carriers (LOHCs), and novel synfuels. Mostly experimental or early-stage and unlikely to see wide transport use this decade.

Overall, no single fuel wins everywhere: technology maturity, energy efficiency, sustainability of feedstocks, and local economics will determine the right mix by sector and region.

Which fuel fits which job?

The optimal fuel depends on duty cycle, energy density needs, infrastructure, and policy. The following mapping highlights where each option is most likely to lead.

1. Light-duty road (cars, SUVs): Battery-electric will dominate globally thanks to efficiency and maturing charging networks; plug-in hybrids remain transitional in some markets.
2. Urban buses and delivery vans: Battery-electric, with depot charging and growing public fast-charging, provides best total cost of ownership and air-quality gains.
3. Long-haul and heavy-duty trucks: Battery-electric with megawatt charging on key corridors in the late 2020s; fuel-cell hydrogen for very long ranges, cold climates, and high uptime routes where hydrogen supply is reliable.
4. Aviation: SAF is the primary lever through 2040s; e‑kerosene supply will expand but remain constrained. Battery or hydrogen aircraft will be limited to small regional segments this decade.
5. Shipping: Green methanol as the near-term alternative, given engine readiness; ammonia likely gains in deep-sea segments in the 2030s; batteries for short-sea and port operations; LNG only as a transitional fuel if methane slip is tightly managed.
6. Rail: Electrified lines where possible; battery and hydrogen trains for non-electrified regional routes depending on geography and service patterns.
7. Off-road, mining, agriculture: Mix of battery-electric for short-shift operations, renewable diesel/HVO for existing fleets, and hydrogen for heavy, continuous-duty equipment.
8. Industrial high heat and feedstocks: Hydrogen (and derivatives) for steel, refining, chemicals; electrification where feasible; biomass or RNG for specific processes; synthetic fuels as backup where process redesign is impractical.

This allocation reflects a pragmatic path: electrify wherever efficient and feasible, reserve molecules (hydrogen, ammonia, methanol, SAF, e‑fuels) for long-range, high-heat, or legacy systems that are hard to electrify directly.

What will determine winners: cost, carbon, and constraints

Lifecycle emissions and carbon accounting

Real climate gains depend on cradle-to-grave emissions. Policies in the EU require strict rules for renewable hydrogen and e-fuels (additional renewable power, temporal and geographic correlation), and U.S. guidance is moving toward similarly robust accounting for tax credits. Biofuel sustainability hinges on avoiding indirect land-use change, prioritizing waste and residue feedstocks, and verifying methane leakage for RNG. As rules tighten, fuels with genuinely low lifecycle carbon intensity will gain a durable advantage.

Infrastructure and technology progress

Charging networks are scaling quickly, with megawatt charging pilots for heavy trucks underway and depot charging expanding. Hydrogen refueling remains sparse, though heavy-duty corridors in Europe, North America, and parts of Asia are in development. Ports are beginning to prepare bunkering for methanol and, cautiously, ammonia. Airports are installing SAF blending and logistics capacity as mandates ramp. Battery chemistries are improving (including high-cycle LFP and early sodium-ion for cost-sensitive segments), while fuel-cell durability and compressors are improving for heavy-duty use.

Supply, feedstocks, and scalability

Waste oils and fats can only meet a small share of global liquid fuel demand, so advanced biofuels must lean on residues, energy crops with guardrails, and municipal/forestry waste. Truly low-carbon e-fuels require abundant cheap clean electricity and CO2 from biogenic sources or direct air capture; their energy penalty is high, so they’ll be precious and targeted. Electrolyzer manufacturing and renewable power additions are accelerating, but permitting and grid expansion remain critical bottlenecks.

Policy landscape in brief (2024–2025)

Regulation is steering the market. The EU’s ReFuelEU Aviation mandates rising SAF shares (starting at 2% in 2025 and climbing in steps toward 2050), while FuelEU Maritime pushes shipping fuel GHG intensity down over time. The Alternative Fuels Infrastructure Regulation is expanding charging and hydrogen corridors. In the U.S., major incentives for clean hydrogen, SAF, and low‑carbon fuels depend on verified lifecycle emissions; agencies are refining rules to prevent greenwashing. The International Maritime Organization targets net-zero GHG by around 2050 with interim checkpoints, and global aviation pursues net‑zero by 2050 under ICAO alongside CORSIA’s offsetting framework. China continues to lead EV deployment and component manufacturing, and countries from India to Japan and the Gulf states are funding green hydrogen value chains.

Signals to watch through 2030

These indicators will show which fuels are scaling fastest and where investment risks or opportunities are shifting.

• Costs and availability of SAF, e‑methanol, and green hydrogen under stricter carbon-intensity rules.
• Deployment of megawatt charging and the share of battery-electric in heavy-duty truck sales.
• Buildout of methanol and ammonia bunkering at major ports and safety standards maturation.
• Grid reinforcement, renewable power additions, and electrolyzer capacity actually commissioned.
• Verified methane leakage rates across gas and RNG supply chains.
• Feedstock sustainability frameworks for advanced biofuels and enforcement outcomes.

Progress across these fronts will determine how quickly alternative fuels move from pilots to mainstream, and which pathways achieve durable cost and carbon advantages.

Outlook: the next decade

By the early 2030s, most new urban road vehicles in major markets will be electric, heavy trucking will split between batteries and hydrogen depending on routes, and shipping will see methanol first and ammonia next. Aviation will rely primarily on SAF for decades, with e‑kerosene slowly growing. Synthetic drop-in fuels will play niche but vital roles for legacy fleets and remote regions. The transition’s common denominator is clean electricity: the faster grids add reliable, affordable renewables and storage, the faster all low‑carbon fuels can scale.

Summary

Future alternative fuels will be a portfolio, not a single winner. Batteries lead where efficiency and charging access align; hydrogen and its derivatives serve long-haul and high-heat needs; and sustainable biofuels and e‑fuels fill the aviation gap and legacy niches. Tight lifecycle rules, abundant clean power, and infrastructure buildout will separate truly low‑carbon fuels from stopgaps—and determine who gets to net‑zero on time.