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Biodiesel, e-fuel, ethanol. The list of alternative fuels is growing in length — and growing more confusing.

While the different types of alt-fuels may cause your head to spin, it’s important to understand the differences between them as they become more commonplace. Alternative fuels will enable the world to fly airplanes, transport goods and sail across oceans with a smaller carbon footprint than their fossil fuel cousins. They could also grow into a multibillion-dollar market.

For now, many alternative fuels are in their infancy and face major hurdles before reaching a meaningful scale. Nevertheless, customers ranging from airlines to shipping companies and even traditional automakers have put major money into the burgeoning industry. Here is our cheat sheet to understand the different alt-fuels and how close they are to commercialization.
Electrofuel

What it is: Also known as e-fuel, this synthetic fuel is made from water and carbon dioxide. E-fuel producers use electrolyzers to break down water into its components of hydrogen and oxygen using clean energy. The hydrogen is then added to a bioreactor along with captured CO2 and catalysts that turn them into e-fuel. Many types of transport fuels — including but not limited to e-kerosene for jets, e-diesel for buses and trucks, and e-methanol for ships — can be produced this way. Worldwide, there are more than 200 e-fuel projects under development, though industrial-scale operation is few and far between.

What its limitations are: One major hurdle for e-fuel is its hefty cost. Making e-kerosene, for example, can be at least four times more expensive than conventional fuel. With very few commercial-scale e-fuel facilities in existence, major questions remain about the technology’s scalability. And until technology to remove carbon directly from the air matures — itself not a given by any means — e-fuel producers also face siting constraints. That’s because gaining access to both renewable energy and CO2 feedstock is vital to e-fuel production, but the two resources may not co-exist in the same place.

Read more: A Gates-Backed Startup Is Making Fuel From Water and Carbon Dioxide
Biofuel made from corn and soybeans

What it is: This is one of the more established alternative fuels. Fermenting the sugars in corn can produce ethanol. Henry Ford declared ethanol the “fuel of the future,” and the US government began to encourage its use as early as the 1970s in a bid to reduce petroleum dependence. Today, most gasoline sold in the US contains 10% ethanol, which is largely corn-based. Meanwhile, soybean oil accounts for more than half of the country’s biodiesel feedstocks.

What its limitations are: Grain-based ethanol and biodiesel can heighten water scarcity and compete with food production. Blending ethanol into transport fuel also drives up refining costs and increases the price at gas pumps. The fuel also may fail to deliver major climate benefits since growing corn and soybean for fuel production can also release a large amount of greenhouse gases.

Read more: EPA’s Own Scientists Warn Ethanol Might Not Be Green Enough
Synthetic ethanol, cellulosic ethanol and biofuel made from food waste

What it is: While the majority of today’s alternative fuel supply comes from corn and soybeans, the fuel can be made with other feedstocks. That includes forest and agriculture waste, carbon dioxide, and even trash. That ethanol can be converted into renewable diesel and sustainable aviation fuel through a process known as alcohol-to-jet. (Bioengineered algae and used cooking oil are also becoming an emerging source of jet fuel.)

What its limitations are: Ethanol made from agricultural residue or captured CO2 can be significantly more expensive than conventional fuels. The average production cost of cellulosic ethanol, for example, is double or triple that of fossil fuel equivalents. Most production of synthetic and cellulosic ethanol exists at the pilot scale, requiring time, investment and technological advancement to reach an industrial capacity. While producing biofuel from used cooking oil is more commercially viable, collecting a small amount of feedstock from multitudes of restaurants is challenging.