What Is Considered an Alternative Fuel Vehicle?

An alternative fuel vehicle is one that runs on a fuel or energy source other than conventional petroleum gasoline or diesel—such as electricity, hydrogen, compressed natural gas, propane, high-ethanol blends (like E85), or certain biofuels. In practice, definitions vary by country and program, but the core idea is the same: if the vehicle can operate on a non-petroleum energy source recognized by relevant authorities, it’s considered an alternative fuel vehicle (AFV).

How Policymakers Define “Alternative”

While the concept is straightforward, legal definitions differ across regions and determine eligibility for incentives, fleet mandates, and reporting. Below are widely used reference points in the United States and European Union, with notes on how those terms are applied.

United States (Energy Policy Act framework)

Under the U.S. Energy Policy Act (EPAct), alternative fuels include electricity; hydrogen; natural gas (CNG/LNG); liquefied petroleum gas (propane/autogas); methanol, denatured ethanol (E85), and other alcohol fuels at 85% or higher; fuels derived from biological materials (for example, pure biodiesel, or B100); coal-derived liquid fuels; and P-series fuels. Vehicles that are dedicated to, or capable of operating on, these fuels are generally considered AFVs. Conventional hybrids (without a plug) do not qualify as AFVs, but plug-in hybrids do because electricity is an EPAct alternative fuel. Flex-fuel vehicles qualify when fueled with E85; diesel vehicles typically do not qualify unless they operate on a qualifying non-petroleum fuel such as B100. Program guidance can be specific, so fleets often confirm eligibility with the U.S. Department of Energy’s Alternative Fuels Data Center resources or program administrators.

European Union (AFIR and related policies)

The EU’s Alternative Fuels Infrastructure Regulation (AFIR, 2023) and related policies recognize alternative fuels as electricity, hydrogen, biofuels, synthetic and paraffinic fuels (including e-fuels), and natural gas (CNG/LNG) including biomethane. Many member states also support LPG/autogas in practice. A vehicle running on these energy carriers can be considered an AFV under EU-aligned schemes, though incentives and reporting requirements vary by member state.

Other markets

Canada largely aligns with U.S. definitions; Japan and South Korea recognize electric, hydrogen, CNG, and LPG vehicles; and emerging rules in countries such as China and India prioritize electricity, hydrogen, and gas fuels. Always check local laws for program-by-program criteria.

Common Types of Alternative Fuel Vehicles

The following list outlines the vehicle types most commonly recognized as AFVs by regulators and industry, along with how they use their alternative fuel or energy source.

• Battery electric vehicles (BEVs): Run exclusively on electricity stored in a battery; no tailpipe emissions.
• Plug-in hybrid electric vehicles (PHEVs): Use electricity for part of their driving and a combustion engine (usually gasoline) as backup; counted as AFVs because they operate on electricity.
• Hydrogen fuel cell electric vehicles (FCEVs): Generate electricity onboard from hydrogen to power an electric motor; zero tailpipe emissions (water vapor).
• Natural gas vehicles (NGVs): Use compressed natural gas (CNG) or liquefied natural gas (LNG); can be dedicated or bi-fuel (natural gas/gasoline).
• Propane/autogas vehicles: Use liquefied petroleum gas (LPG); common in fleets and taxis; can be dedicated or bi-fuel.
• Flex-fuel vehicles (FFVs): Can use high-ethanol blends such as E85 (up to 85% ethanol); considered AFVs when fueled with E85.
• Biodiesel-capable vehicles using B100: Vehicles designed or certified to operate on pure biodiesel (B100) rather than petroleum diesel; note that lower blends like B5 or B20 are often not treated as “alternative” under federal definitions, though state programs may differ.
• Hydrogen internal combustion engine (H2-ICE) vehicles: Emerging trucks and specialty vehicles that burn hydrogen in modified engines; recognized as AFVs where hydrogen is an accepted alternative fuel.
• Vehicles using biomethane/renewable natural gas (RNG): Technically NGVs that operate on methane from renewable sources; treated as alternative due to the renewable fuel pathway.

Together, these categories cover the majority of vehicles recognized as AFVs across major markets, with the exact status determined by the specific fuel used and the governing program’s rules.

What Typically Does Not Qualify (and Edge Cases)

Not every efficient or “green-branded” technology is classified as an AFV. The distinctions below are common across many programs, though there are exceptions by jurisdiction.

• Conventional gasoline or diesel vehicles: Even if efficient, they are not AFVs when using standard petroleum fuels.
• Conventional (non-plug-in) hybrids and mild hybrids: These improve efficiency but still rely on gasoline or diesel and typically do not qualify as AFVs.
• Low-blend biofuels: Gasoline with E10/E15 or diesel with B5/B20 is often treated as conventional fuel use under federal definitions; some state or regional programs may treat higher blends more favorably.
• Renewable or synthetic drop-in fuels: Treatment varies. In the EU, synthetic and paraffinic fuels (including e-fuels) are recognized as alternative; U.S. federal treatment depends on EPAct interpretation and program guidance. Fleets should verify eligibility.
• Aftermarket additives or minor modifications: These generally don’t convert a vehicle into an AFV unless the vehicle is certified or demonstrably operates on a recognized alternative fuel.

When in doubt, eligibility typically hinges on whether the vehicle is certified or configured to operate on a recognized alternative fuel and whether the fuel used meets the threshold defined by the program (for example, E85 vs. E10).

Why the Definition Matters

Whether a vehicle qualifies as an AFV influences eligibility for tax credits or rebates, access to HOV lanes, low-emission zones, fleet compliance targets, and infrastructure planning. For example, U.S. federal consumer tax credits currently focus on plug-in electric and fuel cell vehicles, while certain state and fleet programs also include natural gas and propane vehicles. In the EU, AFV status affects infrastructure rollout obligations under AFIR and national incentive schemes.

A Practical Checklist to Tell If Your Vehicle Is an AFV

If you’re unsure whether a specific vehicle qualifies as an AFV in your region, use this quick checklist to verify.

1. Check the fuel label: Look for “E85,” “CNG,” “LNG,” “LPG/Propane,” “Hydrogen,” or charging/electric indicators on the vehicle or fuel cap.
2. Review the owner’s manual and window sticker: Manufacturers specify approved fuels and, for EVs/PHEVs/FCEVs, identify the propulsion system.
3. Verify certification: For U.S. fleets, consult the DOE Alternative Fuels Data Center or state regulators for model certification lists; in the EU, confirm with national transport or energy agencies.
4. Confirm the fuel actually used: Flex-fuel vehicles count as AFVs when operated on E85; diesel vehicles typically need a qualifying non-petroleum fuel (such as B100) to be treated as AFVs in many programs.
5. Check program rules: Incentives and reporting vary—consumer tax credits, fleet mandates, and local benefits can have narrower criteria than general AFV definitions.

Completing these steps will clarify both the technical status of your vehicle and its eligibility for benefits in your jurisdiction.

Summary

An alternative fuel vehicle runs on an energy source other than conventional petroleum gasoline or diesel. Widely recognized examples include battery electric, plug-in hybrid, and hydrogen fuel cell vehicles, as well as vehicles using CNG/LNG, propane, E85 (in FFVs), B100 biodiesel, biomethane, and—depending on jurisdiction—certain renewable or synthetic fuels. Program rules vary, so confirming the accepted fuels and certification in your region is essential for compliance and incentives.

What is an example of an alternative fuel?

Examples of alternative fuels include ethanol (from corn or sugarcane), biodiesel (from vegetable oils or animal fats), electricity (from renewable sources), natural gas (including compressed and renewable forms), hydrogen (for fuel cell vehicles), propane (LPG), and renewable diesel (from biomass). These fuels are considered alternatives to petroleum-based fuels and are used in a variety of vehicles to help reduce greenhouse gas emissions.
 
Biofuels

• Ethanol: Opens in new tabA type of alcohol fuel made from crops like corn or sugarcane, used in flex-fuel vehicles and blended with gasoline (e.g., E85). 
• Biodiesel: Opens in new tabA fuel derived from vegetable oils or animal fats, which can be used in diesel engines, either alone or blended with petroleum diesel. 
• Renewable Diesel: Opens in new tabA biomass-derived fuel that is suitable for use in diesel engines and offers reduced lifecycle carbon emissions. 

Gaseous Fuels

• Natural Gas (CNG/RNG): Opens in new tabCompressed natural gas (CNG) and renewable natural gas (RNG) are methane-based fuels used in specially designed vehicles to reduce emissions. 
• Propane (LPG): Opens in new tabA readily available gaseous fuel that has been used for decades in various vehicles, offering advantages like lower non-carbon emissions. 
• Hydrogen: Opens in new tabAn emissions-free alternative fuel for fuel cell vehicles, which can be produced from renewable resources to further reduce carbon footprints. 

Other Alternatives

• Electricity: Opens in new tabUsed in electric vehicles (EVs), this fuel source can provide significant reductions in greenhouse gases when generated from renewable sources. 
• Methanol: Opens in new tabAn alcohol fuel that can be produced less expensively for internal combustion engines, though less common than ethanol. 
• E-fuels: Opens in new tabAlso known as synthetic fuels, these are produced using low-carbon, renewable electricity, offering the lowest GHG emissions among many alternatives but are very costly to produce, according to DieselNet. 

What is an alternative fuel vehicle?

An alternative fuel vehicle (AFV) runs on fuels other than traditional petroleum-based gasoline or diesel, such as electricity, hydrogen, natural gas, biofuels, or propane. These vehicles aim to reduce reliance on fossil fuels, enhance energy security, and improve air quality by lowering emissions compared to conventional engines. Common types of AFVs include Battery Electric Vehicles (BEVs), Plug-in Hybrid Electric Vehicles (PHEVs), Hybrid Electric Vehicles (HEVs), and Hydrogen Fuel Cell Vehicles (FCEVs).
 
Examples of Alternative Fuel Vehicles

• Battery Electric Vehicles (BEVs): Opens in new tabAlso called all-electric vehicles, these are powered solely by electricity stored in a battery that must be recharged from an external source. 
• Plug-in Hybrid Electric Vehicles (PHEVs): Opens in new tabThese vehicles have both an internal combustion engine and an electric motor. They can be plugged in to recharge the battery and can operate on electricity alone for a certain range before the gasoline engine takes over. 
• Hybrid Electric Vehicles (HEVs): Opens in new tabUnlike PHEVs, HEVs cannot be plugged in. Their batteries are charged by the gasoline engine and through regenerative braking, which captures energy lost during slowing down. 
• Hydrogen Fuel Cell Vehicles (FCEVs): Opens in new tabThese vehicles convert hydrogen into electricity using a fuel cell, which then powers the vehicle’s electric motor. They produce no harmful tailpipe emissions, only water. 
• Natural Gas Vehicles (NGVs): Opens in new tabThese vehicles run on compressed natural gas (CNG), which is a cleaner alternative to gasoline and diesel. 
• Flexible-Fuel Vehicles (FFVs): Opens in new tabThese internal combustion engine vehicles are designed to run on multiple fuels, most commonly a blend of gasoline and ethanol or methanol, stored in the same tank. 

Benefits of AFVs

• Environmental: They produce fewer or zero tailpipe emissions, improving air quality and reducing the impact of climate change. 
• Energy Security: Using alternative fuels diversifies energy sources and can lessen a nation’s dependence on imported petroleum. 
• Economic: Reducing fuel costs and utilizing domestic resources can offer economic advantages. 

What vehicles qualify for alternative fuel tax credits?

Qualified Fuel Cell Vehicle
To qualify for the Alternative Motor Vehicle Credit, the vehicle must be a Qualified Fuel Cell Vehicle. This is a vehicle propelled by power derived from one or more cells that convert chemical energy directly into electricity by combining oxygen with hydrogen fuel, and that meets certain additional requirements.

Is E85 considered an alternative fuel?

E85 is a nominal blend of 85 percent ethanol and 15 percent gasoline that is an alternative fuel for automobiles. The actual ethanol content of E85 can vary depending upon the month of the year and geographical location, and may be as little as 70 percent ethanol. E85 is used in flexible fuel vehicles (FFVs).