It’s handy to have a volcano in the neighborhood, at least if you want a cheap way to make recycled fuel. Carbon Recycling International , located next to a volcano in Iceland, is turning carbon dioxide into a fuel it calls “Vulcanol”–a nice homage to the original source of the power.

For years, the volcano has powered a nearby geothermal electricity plant. Now, as the power plant runs, Carbon Recycling has started capturing the carbon dioxide emissions and turning it into methanol, a liquid fuel that can either be used to power cars or to make products like plywood and paint.

Their process could actually be used to capture and recycle carbon dioxide anywhere. But it’s trickier at places like coal-fired power plants, where emissions are a mix of chemicals that are expensive to separate. The CO2 emissions from the geothermal plant are easier to capture and use because they’re more concentrated. And the geothermal plant also provides cheap, renewable electricity to power the conversion to methanol.

Unlike regular gas, burning methanol doesn’t emit carbon monoxide, soot, or other carcinogens. And electric cars can use the fuel too. “If we want to transition from combustion engines to EV, direct methanol fuel cells will become an important feature of future battery powered vehicles with range extension–with the added advantage that these vehicles can use our existing fuel infrastructure,” says KC Tran, CEO and co-founder of Carbon Recycling International.

Right now, most methanol isn’t made in a renewable way, but Tran says it could be. “Methanol from fossil fuel is already available cheaply and in large quantities. But methanol is also emerging as the most versatile green fuel source on the planet, as it can be made from recycled CO2, biomethane, or solid waste biomass, and even undifferentiated municipal waste.”

The volcano-powered plant in Iceland is already running to demo the technology and will grow the project next year. In two or three years, the company expects the plant will be 10 times bigger. Already, they’re producing enough methanol to help offset the fuel emissions of tens of thousands of cars.

And soon, they hope to prove that their technology can be affordable even in places that don’t happen to have volcanoes.