Both ethanol and methanol may be used as substitute for or blended with gasoline (may also be used in diesel engines provided required modifications are being made). Ethanol is the most commonly used of the two.

Ethanol, ethyl alcohol or alcohol has the chemical formula C₂H₅OH and the structural fomula CH₃CH₂OH.

Ethanol is a volatile, flammable, colorless liquid with a slight chemical odor. It is used as an antiseptic, a solvent, and a fuel.

Ethanol burns in oxygen, including open air, forming carbon dioxide and water. Chemical reaction:

C₂H₅OH + 3 O₂ → 2 CO₂ + 3 H₂O

CO₂ emission:
Burning 1 kg Ethanol (mol weigth – 46 g/mol) generates 1,9 kg Carbon dioxide (CO₂) (mol weight – 44 g/mol) which is far less than by burning most hydrocarbons.

Production of ethanol
Ethanol is produced as a petrochemical through the hydration of ethylene and by biological processes, by fermenting sugars with yeast.

Ethanol for use as an industrial feedstock or synthetic ethanol is made from petrochemical feed stocks, primarily by the acid-catalyzed hydration of ethylene. Chemical reaction:

C₂H₄ + H₂O → C₂H₅OH

The catalyst is usually phosphoric acid adsorbed onto silica gel or diatomaceous earth.

Fermentation – Ethanol in alcoholic beverages and fuel is produced by fermentation normally followed by distillation to reach desired ethanol concentration.

C₆H₁₂O₆ → 2 C₂H₅OH + 2 CO₂
C₁₂H₂₂O₁₁ + H₂O → 4 C₂H₅OH + 4 CO₂