As fossil fuel supplies are being depleted and their negative effects on the environment become more apparent, research into renewable energy sources and alternative fuels has increased. Developing countries face the dual challenge of rising energy demand from population growth and urbanization, alongside the necessity to reduce greenhouse gas (GHG) emissions. In this regard, the present study reviews the viability, environmental effects, and infrastructure requirements of alternative fuels such as hydrogen, biofuels, electricity, methanol, natural gas, and ammonia. Although hydrogen and ammonia exhibit potential as carbon-free alternatives, issues with transport, storage, and manufacturing costs are impeding their uptake. Electric vehicles, while beneficial for short-distance travel, face limitations in range and resource availability. Biofuels offer a viable short-term solution but struggle with feedstock procurement and the food-versus-fuel debate. The study also looks at how governmental assistance and technical developments could promote the widespread use of alternative fuel vehicles (AFVs). It also examines the role of ammonia as a promising carbon-free fuel with a mature infrastructure capable of mitigating hydrogen’s key drawbacks. The insights aim to aid policymakers and researchers in making informed decisions to achieve sustainable mobility, thereby reducing reliance on fossil fuels and supporting global climate goals. The study underscores the urgency of a diversified approach to decarbonizing the transport sector, leveraging the strengths of each fuel type to overcome individual limitations and achieve significant reductions in fossil fuel dependency and carbon emissions.