For grading different fossil fuels and their substitutes, a new figure of merit, linking net energy yield and gross pollution from such fuels, is proposed. Typical results have been obtained by analysing all of the energy utilizations in a particular plant. The figure of merit for anhydrous ethanol from molasses, as produced in India, has been evaluated and compared with indicative figures for fossil fuels. The energy yield ratio was found to be about 2. The potential of bioethanol as a gasoline substitute in road transport has been estimated to be as high as 28% under Indian conditions.