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Ammonia has been proposed as a practical alternative to fossil fuel for internal combustion engines. The calorific value of ammonia is 22.5 MJ/kg (9690 BTU/lb), which is about half that of diesel. In a normal engine, in which the water vapour is not condensed, the calorific value of ammonia will be about 21% less than this figure. It can be used in existing engines with only minor modifications to carburettors/ injectors.

To meet these demands, significant capital would be required to increase present production levels. Although the second most produced chemical, the scale of ammonia production is a small fraction of world petroleum usage. It could be manufactured from renewable energy sources, as well as coal or nuclear power. It is, however, significantly less efficient than batteries.

The 60 MW Rjukan dam in Telemark, Norway produced ammonia via electrolysis of water for many years from 1913 producing fertilizer for much of Europe. If produced from coal, the CO₂ can be readily sequestered (the combustion products are nitrogen and water).

In 1981 a Canadian company converted a 1981 Chevrolet Impala to operate using ammonia as fuel.

Ammonia engines or ammonia motors, using ammonia as a working fluid, have been proposed and occasionally used. The principle is similar to that used in a fireless locomotive, but with ammonia as the working fluid, instead of steam or compressed air. Ammonia engines were used experimentally in the 19th century by Goldsworthy Gurney in the UK and in streetcars in New Orleans.