Abstract: A fuel additive composition including fatty acid alkyl esters and glyceryl ethers, and an alternative fuel composition that includes the fuel additive composition. Also provided is a method for preparing the fuel additive composition and the alternative fuel composition. In one embodiment, the fuel additive composition is prepared by esterifying free fatty acids and etherifying glycerol with one or more olefins in the presence of an acid catalyst. In one embodiment, the fuel additive composition can be thermally cracked under conditions of increased temperature and/or pressure in the presence of a Lewis acid catalyst. In another embodiment, the fuel additive composition is hydrocracked. The resulting fuel additive composition can be blended with diesel fuel to produce an alternative fuel composition. In one embodiment, the alternative fuel composition includes between approximately 25 and 95 percent diesel fuel and between approximately 5 and 75 percent of the fuel additive composition.