The present study provides a feasible strategy for minimizing automotive CO2 emissions by coupling the principle of the Atkinson cycle with the use of bioethanol fuel. Motor cycles and scooters have a stroke to bore ratio of less than unity, which allows higher speeds. The expansion to compression ratio (ECR) of these engines can be altered by tuning the opening time of the intake and exhaust valves. The effect of ECR on fuel consumption and the feasibility of ethanol fuels are still not clear, especially for short stroke engines. Hence, in this study, the valve timing of a short stroke engine was tuned in order to explore potential bioethanol applications. The effect of valve timing on engine performance was theoretically and experimentally investigated. In addition, the application of ethanol/gasoline blended fuels, E3, E20, E50, and E85, were examined. The results show that consumption, as well as engine performance of short stroke motorcycle engines, can be improved by correctly setting the valve controls. In addition, ethanol/gasoline blended fuel can be used up to a composition of 20% without engine modification. The ignition time needs to be adjusted in fuel with higher compositions of blended ethanol. The fuel economy of a short stroke engine cannot be sharply improved using an Atkinson cycle, but CO2 emissions can be reduced using ethanol/gasoline blended fuel. The present study demonstrates the effect of ECR on the performance of short stroke engines, and explores the feasibility of applying ethanol/gasoline blended fuel to it.