With emergence of fuel cells which have much better thermal efficiency than internal combustion engines (later abbreviated as ICE), ICE has to improve its thermal efficiency to the level of 50%. One of the ways to improve the thermal efficiency of ICE is to utilize ultra-lean combustion and several technical papers have been published. But it seems the thermal efficiency has not been improved as the theory predicts. The test data of these technical papers were re-examined and it was concluded that the thermal dissociation of burned gas and NOx formation is the key factor of a discrepancy between the theory and the actual test data. In order to prevent an occurrence of thermal dissociation, emulsified fuels (mixture of carbonaceous fuels with water) was proposed.