There is a lot of emphasis on “going green” these days, though that mostly seems to apply to hippies driving electric cars. Then again, maybe not; a lot of muscle car enthusiasts are starting to realize the power and potential alternative fuels pack. Indeed, if you want to do something that hasn’t been done before, you pretty much have to look to alternative fuels…though going green can get much deeper than that.

Carscoop brings us the story of the 1967 Ford Falcon XR sedan built by Mike Fabar. Called “ZERO’D,” not only does this classic Australian muscle car boast a 600 horsepower engine that runs on biodiesel, but the entire building process reportedly uses recycled parts, keeping its carbon footprint close to zero.

Billed as the world’s first “elite eco-friendly custom-built muscle car,” ZERO’D will officially debut at the 2012 Australian International Motor Show in Sydney this October. Fabar claims that the 7.3 liter Ford Powerstroke diesel engine can push 600 horsepower to the wheels through a four-speed Allison transmission while running B20, a 20% blend of biodiesel and and 80% conventional diesel. Sure, its not the greenest fuel ever, but it is a step in the right direction.

Even cooler though is Fabar’s insistence on using recycled materials, including second-hand fenders and seats stitched together with discarded hide scraps. Even nuts and bolts were recycled to keep the carbon footprint down. Just a few new components, including rubber, glass, and a custom-built radiator and intercooler, were used in this project.

With gas prices rising and emissions standards becoming ever more draconian, we think that alternative fuel-powered muscle cars will only increase in popularity. It isn’t just a matter of saving the environment; Australia, like America, relies far too much on foreign oil. Cars like the diesel-powered ZERO’D can make a statement about going green without inspiring a collective yawn among performance enthusiasts.