Biofuels typically refer to liquid fuels produced from biomass. Biofuels are of high importance mainly owing to their use as transportation fuels, to partially or fully substitute gasoline and diesel. The two prominent biofuels in this context are ethanol (for gasoline replacement) and biodiesel (for diesel replacement).

More than 100 million tons of ethanol are produced globally every year, and over 30 million tons of biodiesel. These form only a fraction of the total oil used for transport every year - about 4 billion tons of oil is produced every year, with a large share used for transport. While their current contribution is small, biofuels constitute a fast growing market, especially ethanol, with countries such as Brazil running 50% of its transport on ethanol. Other countries aggressively pursuing biofuels include the US, many EU countries, and India - most of these countries use only about 10% of biofuels in their transport fleet.

Ethanol is especially popular in countries that are large producers of sugar and corn -  these can be used to make ethanol. Countries that are large scale producers of vegetable oil (palm oil, soybean oil, rapeseed oil, peanut oil) have potential for producing biodiesel.

The first generation production technology for both ethanol and biodiesel are quite well established. However, second and third generation technologies for these two fuels are still undergoing significant innovations and evolutions.

Similar to the use of biomass for heating or for power, use of biofuels in transport constitutes a net zero application of the fuel, as the CO2 emitted during biofuel use was originally captured by the biomass feedstock during its growth.

Biofuels provide a partial or in some cases even full replacement alternative for gasoline and diesel, and in gasoline or diesel blends, they can be used without any major changes to the vehicles or the support infrastructure. However, biofuels have seen significant challenges in scaling, owing to the non-availability of suitable feedstock in large quantities. In addition, use of food crops (sugarcane, corn, palm oil etc.) have resulted in the food vs. fuel debate. Large scale cultivation of crops such as palm for biofuels have also resulted in significant environmental and ecological challenges in countries such as Malaysia and Indonesia.

Innovations in the biofuels domain during the 2020-2030 period can be expected in 2nd generation (especially cellulosic ethanol) and 3rd generation biofuels (especially biomass to liquid tech), scaling up of energy crop cultivation, pyrolysis, carbon capture at ethanol fermentation facilities, and vehicle engine customizations for higher-proportion biofuel use.

Decarbonization potential

The world’s current production of 130 million tons of biofuels (about 100 million tons of ethanol and 30 million tons of biodiesel) would equate to about 250 million tons of CO2 emissions saved per annum, under suitable assumptions for comparative CO2 emissions savings when replacing gasoline/diesel with biofuels.

Many countries worldwide have set higher targets for biofuels blending. India for instance is targeting blending twice the amount of ethanol into gasoline by 2025 as it did in 2020. 

Assuming that the overall global biofuels production and use will double between 2020 and 2030, biofuels will have a decarbonization impact of about 500 million tons per annum by 2030.

Industries impacted

  • Agriculture & farming
  • Airlines & aviation
  • Automobiles & auto components
  • Chemicals & petrochemicals
  • Food & beverages
  • Logistics
  • Marine transport
  • Oil & gas
  • Rail transport Retail
  • Road transport
  • Travel & hospitality
  • Waste management

Latest News on Biofuels

Themes & Topics

  • Sources

    • Plant & plant-based products

    • Animal & human waste

    • Residential & industrial organic waste

  • Ethanol

    • First generation

    • Second generation

      • Cellulosic ethanol

  • Biodiesel

    • First generation

    • Second generation

      • From non edible oils

  • Methanol

  • Butanol

  • Biogas

    • RNG

  • Third generation biofuels

    • Algae fuels

    • Biomass to liquid

  • Sustainable aviation biofuels

  • Renewable propane

  • Non-food energy crop for biofuels

    • Miscanthus

    • Switchgrass

    • Bamboo

    • Jatropha

    • Eucalyptus

    • Pongamia

    • Algae

  • Drop-in replacements

    • Biogasoline

    • Renewable diesel

  • Technologies

    • Fermentation

    • Transesterification

    • Anaerobic digestion

    • Pyrolysis

    • Gasification

    • Hydrothermal liquefaction

    • Hydrogenation











  • Biofuel end uses

    • Transport fuel

    • Heating fuel for industrial & residential sectors

    • Fuel for power generation

  • Automotive technology development

    • For biodiesel

      • B20

      • B100

    • For ethanol

      • E20

      • E100

  • Biorefinery product basket

    • Biofuels

    • Biochar

    • Proteins

    • Lipids

    • Starch/sugar

    • Animal & fish feed

    • Bioplastics & bio-materials

  • Education/capacity building

    • For energy crop production

    • For R&D

    • For end user segments

  • Geographical trends & policies

    • North America

    • South America

    • Europe

    • Asia

    • Middle East & Africa

    • Oceania

  • Collaboration & partnerships

    • With feedstock providers

    • With offtakers

  • Use of IT & digital solutions

  • Case studies

  • Economics

  • Challenges

    • Feedstock challenges

    • Technology challenges