SUMMARY
Development of any country mainly depends on availability of energy, at the same time most of the environmental problems are associated with the use of energy. Sustainable development should be approached in all of its primary dimensions: economic, environmental and social. Energy has deep and broad relationships with each of the three pillars of sustainable development. Rapid industrialization, increasing urbanization and motorization and increase in consumption of fossil fuels are main reasons for environmental degradation. Emissions associated with combustion of fuel have a significant impact on the ecosystem, affecting animals, plants and aquatic life. Transport sector is one of the major contributors to pollution in urban areas. If present trends continue, including the heavy reliance on fossil fuels, risks will build up not only in the environmental dimension but also in the economic dimension. We need to change not only the structure of the energy sector but also behavior in our societies and economies. This paper reviews the use of biofuels, pollutant formation from engines and methods to control emissions for cleaner environment and sustainable development.