Historically, gasoline and diesel have been used as vehicle fuels for a long time. But the decline of oil supply and unstable oil price drive people to find alternative energy for vehicle fuel. Alternative energy solutions may shift energy consumption to less carbon, less pollutions and provide more energy diversity. These issues are investigated in the present literature review.

The first part of the thesis introduces different kinds of alternative energy for vehicles, such as biofuel, natural gas, hydrogen, liquefied petrol gas, electricity and compressed air. The presentations includes their utilization, production, environment effect, running performance, fuel property, market share, running and investigate cost and production barriers. The second part of the thesis work compares the properties of the alternative fuels and discusses the advantages and drawbacks of different types of fuel energies.

Compared with traditional fuels, alternative fuels have superiority in environment impact, sustainability and energy efficiency. Some of them have been used in reality and show a potential as future fuels. The author found that natural gas and liquefied petrol gas have low running costs, better environment performance and acceptable running range, and thus are able to substitute conventional fuels in the short term. Biofuel has better sustainability than gasoline. It will probably become more sustainable and cost effective in the mid-term period. Electricity can also become a future fuel in mid-term period since it has excellent emission performance and low running costs. Hydrogen is expected to substitute conversional fuels in the long term due to high investment costs and current unsustainable production pathway of the latter. The compressed air turned out not suitable for substituting conventional fuels because of poor efficiency and running range performance.