Saab said carbon dioxide emission levels can be reduced by as much as 70% compared to a standard petrol-engined car.
BioPower technology means the 9-5 model is capable of running on either a blend of bioethanol and petrol (E85), or on pure petrol, without any adjustment required by the driver.
Initially available with the 2.0t, 2.0-litre light-pressure turbo engine, UK prices for the Saab 9-5 BioPower begin at £21,651 on the road for the saloon, and £22,851 for the estate variant.
A manual transmission will be available from launch, with an automatic variant to follow shortly after.
First UK deliveries will start in January 2006.
The BioPower engine will be available in all 9-5 2.0t model derivatives; Linear, Linear Sport, Vector and Vector Sport, with a £600 price differential over the regular petrol models.
Saab 9-5 2.0t prices: