"If we are to achieve a truly sustainable transport, then we will have to consider alternative fuels," European Commission Vice President Siim Kallas said in a statement. "For this we need to take into account the needs of all transport modes."
A report from the European Commission found that energy demands could be satisfied through a holistic strategy that includes electric vehicles, biofuels and synthetics.
Alternative fuels, the European Commission said, are the "ultimate solution" to removing fossil fuels from the transportation sector.
"Technical and economic viability, efficient use of primary energy sources and market acceptance, however, will be decisive for a competitive acquisition of market share by the different fuels and vehicle technologies," the European government said.