Ethanol is a clear, colourless liquid biofuel produced primarily through the fermentation of starch and sugar crops like corn, sugarcane and barley. During this biological process, microorganisms like yeast break down plant sugars into alcohol, which is then distilled and dehydrated to achieve high purity. Advanced production methods use cellulosic biomass - such as agricultural residues, wood chips and fast-growing grasses - to create next-generation cellulosic ethanol. It serves as a major renewable fuel component worldwide, commonly blended into commercial gasoline to reduce petroleum consumption.

Ethanol is a vital tool for reducing automotive emissions and improving fuel performance. When blended into gasoline, it acts as an oxygenate, adding oxygen to the fuel mixture to promote more complete combustion, which significantly lowers tailpipe emissions of harmful carbon monoxide and particulate matter. It also possesses a high octane rating, which enhances engine efficiency and prevents engine knocking in high-performance vehicles. However, as it contains roughly one-third less energy per gallon than pure gasoline, higher blend concentrations can lead to a decrease in vehicle fuel economy.