This paper analyses the current trends in application of biomass-based fuels as a valid option for heavy-duty transport and discusses their technology readiness levels, cost and emphasizes on these fuels to be applied as drop-in fuels in heavy-duty engines to minimize potential green-house and toxic gas emissions. Through the extended analysis, this study has identified that ethanol could be the best candidate for application in heavy-duty transport in terms of sustainability, cost, and emission reduction. Ethanol can be used in high concentrations as an additive or blended with the conventional diesel, which still remains a main type of fuel for heavy-duty transport. However, in order to completely adapt ethanol-diesel fuel blends to heavy-duty transport, a few challenges have to be resolved. The first challenge is the phase separation when high-concentration ethanol is blended with neat diesel. This can be fairly resolved by using certain types of surfactants, which will not negatively affect, but on the contrary, result in engine performance improvements as well as emission reductions. The second challenge is the ignition quality of the blends, as the cetane number of an ethanol-diesel blend decreases when high-concentration ethanol is blended with neat diesel. This can be resolved by using certain types of cetane improvers, as highlighted in this paper. The third challenge is the sustainable production and supply of ethanol without competing with food producers and minor impact on the indirect land use. This challenge can be resolved by producing ethanol from different types of organic waste, wastewater and biomass.