The article considers peat as an effective alternative fuel. Its reserves and directions of use in the world and in Ukraine presented and analyzed. The analysis showed that the geological reserves of peat in Ukraine are equivalent to 600 billion cubic meters of natural gas. The main reserves of peat are concentrated in the districts of Polissia. Industrial peat extraction can take place in 12 regions: Volyn, Rivne, Zhytomyr, Kyiv, Cherkasy, Poltava, Sumy, Chernihiv, Khmelnytskyi, Ternopil, Lviv, and Ivano-Frankivsk. It has been shown that, compared to traditional energy carriers, peat fuel has a lower heat of combustion and a fairly high ash content, but during combustion it emits almost no toxic substances and, accordingly, pollutes the environment much less. In home furnaces, peat fuel burned with a higher efficiency than coal, and the ash used as fertilizer. The estimated cost of 1Gj of lower heat of combustion of various types of fuel according to the data of recent years shows a noticeable advantage of peat fuels. The cost of thermal energy obtained from burning 1 ton of peat briquettes is 2 times cheaper than when using coal, 3 times cheaper than gas, and 4 times cheaper than fuel oil. Peat fuel is suitable for use in all types of modern solid fuel combustion devices, which increases the prospect of its implementation on the domestic and foreign fuel markets. The technology for using plant biomass as a filler in peat briquettes and granules developed. Special attention paid to wood, buckwheat husk, sunflower and other grain crops, which have a lower ash content and a higher heat of combustion, the potential of which waste is significant, and the fuel characteristics are able to increase the heat of combustion of composite peat briquettes or peat granules and reduce their ash content. Taking into account that peat used in large quantities as fertilizer for agriculture, a technology developed according to which humic substances first removed from peat for fertilizer, and then biomass added to this peat and a composite peat fuel obtained. This technology involves the integration of technology and extraction of humic substances into the production cycle of a peat briquette plant for the production of composite fuel. The wide implementation of the developed technology of composite peat briquettes at peat briquette factories will allow to increase the production of briquettes by almost 2 times without increasing the consumption of peat raw materials and to produce peat fuel in the range of 0.18-0.2% of geological reserves, which is equivalent to the replacement of more than 1 billion m3 of natural gas. All this allows us to draw a conclusion about the positioning of peat fuel as an effective local type of fuel, which is an alternative to gas and coal.