This paper discusses the potential of gasoline, ethanol and methanol ternary blend as an alternative passenger car fuel in Sweden. Sweden has set various targets aimed to reduce its GHG emissions and to increase the share of renewables in the transportation sector. Nevertheless, the majority of the energy consumed in the road transportation sector still comes from fossil fuels. In order to replace the energy supply of fossil fuels by more renewable fuels, the potential of alternative renewable fuels needs to be explored. Therefore, the potential of a domestically produced ternary blend of Gasoline‐Ethanol‐ Methanol (GEM) fuel blend is analysed in this report. In order to test whether it has the potential to become a successful alternative fuel, an analysis is performed on the: methanol and ethanol production potential from domestic second‐generation feedstocks, the selection of the most suitable production pathways of the biofuels, the potential for a Swedish GEM fuel distribution infrastructure, the economic competitiveness of GEM fuel, and lastly on the environmental impact of the shift from cars running on neat gasoline to GEM fuel. In order to perform the analysis, two scenarios are developed for projecting the share of the GEM cars(cars running on GEM fuel blends) in the Swedish passenger car fleet, considering a time horizon from 2017 to 2030. In Scenario 1, a high share of passenger cars running on GEM fuel is obtained with 22 percent by 2030. In Scenario 2, a low share of cars running on GEM fuel is obtained with 17 percent by 2030. In both scenarios, the passenger cars running on GEM fuel take over the share of cars running on gasoline. The scenarios serve to project the energy demand for GEM fuels. By 2030, the projected energy demand for GEM fuels is 9.7 and 7.5 TWh for Scenario 1 and Scenario 2, respectively. From the biofuel potential studies, it can be concluded that the production potential of the alcohol fuels, derived from currently untapped domestic secondary resources, exceeds the projected energy demand of 9.7 and 7.5 TWh in 2030. According to this thesis, the production potential of 2nd generation ethanol and methanol are 36 and 61.1 TWh, respectively, by 2030. Moreover, the study shows that the majority of the existing fuel distribution network of E85 and gasoline, which is forecasted to have a significant overcapacity in the same time‐span as the scenarios, can be utilized in a GEM fuel distribution network. As a consequence, no major investments are required to develop a Swedish GEM fuel distribution network. Regarding the selection of the biofuel production pathways, this study indicates the most suitable way of producing methanol is by black‐liquor gasification. Regarding second‐generation ethanol, this thesis indicates that the fermentation forestry residues is the most beneficial production pathway. The biofuel production pathways are selected based on the energy yield ratios, the biofuel production cost and biomass feedstock cost. Moreover, this study demonstrates that under the current Swedish policies, GEM fuels blends are economic competitive with gasoline and E85. In order to test the economic competitiveness, a pay‐off curve was developed based on the pump price of gasoline and fuel economy of GEM fuel blends. This study shows the pump prices of GEM fuel blends pay‐off in comparison to gasoline. This analysis indicates that the pump prices of GEM fuel blends lays between 0.87 and 0.92 euro per liter. Regarding the environmental impact, this study indicates that the amount of GHG emissions avoided varies between 10.1 and 13.3 million metric tons CO2eq in Scenario 1. In Scenario 2, the amount of GHG emissions that can be avoided varies between 8.6 and 11.3 million metric tons CO2eq. Moreover, this study indicates that high methanol containing GEM fuel blend are more favourable in terms of biomass utilization, and high ethanol containing GEM fuel blends are more favourable in terms of economy and GHG savings.