A modified version of a Honda that can run on 100% sugar kane ethanol, gasoline or a mix of the two is now on sale in Brazil. These flex fuel vehicles...
...generally use an oxygen sensor that senses which fuel is being burned at the moment (ethanol, gas or a mix) and adjusts the mixture accordingly.
Since taking such measures Brazil has significantly cut emissions and due to the burning process of ethanol most vehicles produce more power while using it.
For more info check this link or google "E85"