In Taiwan, 3% ethanol (E3) blending fuel was introduced to the market to lessen the pressure of energy deficit and carbon reduction from global warming. This study is aimed at discovering the environmental impacts of exhaust emissions imposed by ethanol blending fuels. The tested fuels are 0%, 5%, 10%, 15% and 20% of ethanol blending, and engine testing set rotation speeds at 1500, 2500 and 3500 rpm to simulate slow, normal and fast speeds of vehicle driving. Gaseous emissions from engine exhaust were collected to determine the concentrations of CO, NOx, HC, BTEX, formaldehyde and acetaldehyde. Ethanol blending fuels were found able to reduce the emission of regulated air pollutants (CO, NOx and HC) and containing toxic compounds (BTEX) more or less. However, formaldehyde and acetaldehyde emissions were greatly enhanced due to ethanol combustion in the engine. With the use of ethanol blending fuels, the environmental impact on the release of formaldehyde should be aware and carefully controlled.