World ethanol production in 2006 was 51 kiloliters (1.3 x 1010 US gallons), of which 69% of the world supply came from Brazil and the United States. More than 20 percent of Brazilian cars can run on 100 percent ethanol, including pure ethanol engines and flexible fuel engines. Brazilian flex-fuel engines can run on all ethanol, all petrol or any mixture of the two. In the United States, flex-fuel vehicles can run on 0% to 85% ethanol (15% gasoline) because higher ethanol blends are not yet permitted or more efficient. Brazil supports the fleet of ethanol-burning cars through a large national infrastructure that uses domestically grown sugar cane to produce ethanol. Sugarcane not only contains a higher concentration of sucrose than corn (about 30 percent), it is also easier to extract. The bagasse produced by the process is not wasted, but is used in power plants to generate electricity.

In the United States, the ethanol fuel industry is largely based on corn. According to the Renewable Fuels Association, as of October 30, 2007, 131 grain-ethanol bio-refineries in the United States produced 7 billion U.S. gallons (26 million cubic meters) of ethanol per year. Another 72 projects in the pipeline (in the United States) could add 6.4 billion US gallons (24 million cubic meters) of new capacity over the next 18 months. Over time, it is believed that part of the gasoline market, estimated at 150 billion us gallons (570 million cubic metres) a year, will begin to be replaced by fuel ethanol.

Sweet sorghum is another potential source of ethanol and is suitable for growing in dryland conditions. The International Crop Research Institute for the Semi-Arid Tropics (ICRISAT) is investigating the possibility of growing sorghum as a source of fuel, food and animal feed in arid regions of Asia and Africa. During the same period, sweet sorghum required a third as much water as sugarcane. It also requires about 22 percent less water than corn, also known as corn. The world's first sweet sorghum ethanol distillery began commercial production in 2007 in Andhra Pradesh, India.

Ethanol's high miscibility with water makes it unsuitable for transport through modern pipelines such as liquid hydrocarbons. Mechanics have seen an increase in cases of damage to small engines, particularly carburetors, and attribute the damage to increased water retention caused by ethanol in the fuel.