Exxon Mobil Corp. and Toyota Motor Corp. formed a partnership to test out low-carbon fuels in gasoline engines, potentially offering a way for drivers to reduce emissions without upgrading to an electric vehicle.

The fuel blends are made from cleaner feedstocks and could one day cut greenhouse gas emissions from internal combustion engines by as much as 75 per cent compared with regular gasoline, said Andrew Madden, Exxon’s vice president for strategy and planning, citing initial trial results. The fuels proved compatible with Toyota vehicles, raising the prospect of a drop-in solution that could compete with battery-powered cars in future.

The fuels are “very much at the test phase” and would require government policy support before becoming commercially available, Madden said said in a Wednesday interview. They’re mostly a mix of existing feedstocks like renewable biomass and ethanol produced using cleaner processes, he said.

“Having a solution for liquid fuels that we can use in the existing fleet, having it in the kind of policy construct where we allow the market to innovate, is the lowest cost way to decarbonize transportation,” Madden said.

Both Exxon and Toyota have long histories of testing moonshot technologies to reduce transportation emissions that failed to meet expectations.

Exxon touted algae as a sustainable alternative to diesel for years before dropping the idea, while Toyota spent heavily on a small lineup of hydrogen-fueled vehicles that gained little traction with consumers. Meanwhile EVs, which require no fossil fuels to run, are rapidly becoming mainstream.

Battery-powered autos still face significant hurdles to mass adoption, such as the availability of charging stations, long recharge times and the high cost of new vehicles. Also, they’re not zero carbon if powered by grid electricity, which is typically generated by a mix of sources including natural gas and coal.

New EV customers are currently entitled to tax credits in the U.S. and many other countries. Exxon and Toyota say better policy would focus on so-called lifecycle emissions, which would take into account EV reliance on the grid. A lifecycle emission standard would also reward low-carbon fuels produced by companies like Exxon and drivers of internal combustion engines.

Toyota is taking a “portfolio approach” to lowering emissions that includes electric and hydrogen-powered vehicles, but efforts also need to be made to decarbonize existing fleets to meet climate targets quickly, Tom Stricker, vice president for sustainability and regulatory affairs, said in an interview.

“No matter what you think the pace of electrification transition might be, there will be a billion, if not hundreds of millions of vehicles on the road for quite a long time,” he said. Lower-carbon fuels will be “quite important in achieving those greenhouse gas reductions quickly.”

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