Engineers at MIT are working with Ford Motor Co to build an Ethanol Boost engine which they hope will be in production by 2012.
According to computer models it should produce double the power of a conventional gasoline engine while increasing fuel effeciency by up to 30%.
It works by injecting small amounts of ethanol into the combustion when the engine is running at high torque. It vaporizes in the chamber, cooling the fuel and air mixture.
It will require two fuel tanks, one gasoiline and one ethanol.
Principal Research Engineer Leslie Bromberg has a project for using plasma to convert forest and household waste into hydrogen rich gas which could be run through catalysts to create CO2 neutral liquid fuel. link