Methanol is an unusual alcohol. For one thing, it can be used in fuel cells instead of hydrogen. It is also used by homebrewers to make biodiesel. Alternatively, it can be used in internal combustion engines instead of gasoline (see: drag racing). In China, methanol has just been approved by the ministry for standards for use as a motor vehicle fuel. Like ethanol in the U.S., China now permits the chemical to be added to pure gasoline so that it makes up to 85 percent of the mixture. The U.S. has E85, China has M85. It's possible to make methanol from natural gas, wood, and coal. The downside? Methanol is less efficient than either gasoline or ethanol. For example, a car that gets 10 l/100 km (23.5 mpg) using gasoline would get 12.5 l / 100 km (18 mpg) on ethanol and 15 l / 100 km (15.5 mpg) on methanol.
Green Car Advisor notes that one of the first automakers to prepare a powertrain that can burn methanol is Geely, which makes some of the cheapest cars in the world.
[Source: Green Car Advisor]