Biofuels, explained.

What biofuels are — and why they matter

A biofuel is any fuel made from biomass: material from recently living organisms — crops, plant residues, wood, algae and waste oils — rather than from fossil petroleum laid down over geological time. Because that biomass can be regrown season after season, biofuels are counted as renewable energy, and because they are liquid (or gaseous) they slot into the existing fuel-distribution network in a way that few other low-carbon options can.

That last point is the heart of why biofuels matter. The world has a trillion-dollar system of pipelines, terminals, tanker trucks, filling stations and — above all — more than a billion vehicles built around liquid fuels. Biofuels can be blended into that system today, cutting the carbon intensity of transport fuel without waiting for the entire vehicle fleet to be replaced. They are less a wholesale alternative to petroleum than a way to make the fuels already in use cleaner, incrementally and immediately.

There is also a carbon-cycle logic behind the “renewable” label. Petroleum releases carbon that was locked underground over millions of years; a biofuel releases carbon that its feedstock pulled out of the air only a season or two earlier as the plant grew. The combustion is not emission-free, and growing and processing the feedstock has a real footprint — but the carbon balance is fundamentally different from digging up fossil carbon, which is why biofuels are measured by lifecycle carbon intensity rather than treated as either zero-carbon or no better than petroleum.

The two workhorses: ethanol and biodiesel

Two fuels dominate global production. Ethanol — ordinary grain alcohol, C₂H₅OH — is made by fermenting the sugars in crops such as corn and sugarcane, then distilling and dehydrating the result. It is blended into gasoline, where it raises octane and adds oxygen for cleaner combustion; most petrol sold today is around 10% ethanol (E10). Biodiesel takes a different route: vegetable oils and animal fats are reacted with an alcohol in a process called transesterification to produce fatty-acid methyl esters (FAME), which blend into diesel for trucks, buses and machinery.

Alongside biodiesel, renewable diesel (a hydrotreated fuel chemically near-identical to petroleum diesel) has grown quickly, because it can be used at high blend levels without the cold-weather and storage limits of FAME. The same hydrotreating route is now being used to make sustainable aviation fuel (SAF), as aviation looks for a lower-carbon fuel it can burn in existing aircraft.

The three categories this reference is organised around — ethanol, biodiesel and advanced and cellulosic fuels — map onto that landscape. Ethanol is the gasoline story and by volume the largest; biodiesel and renewable diesel are the diesel story; and the advanced category is where the newer, lower-carbon and harder-to-make fuels sit, from cellulosic ethanol to SAF. Each has its own feedstocks, its own chemistry and its own policy treatment, and each has a dedicated section here.

How biofuels are made

Four production routes do almost all the work, and which one applies depends on the feedstock. Fermentation and distillation turn the sugars in crops into ethanol — directly for sugar crops, after a starch-conversion step for grains. Transesterification reacts oils and fats with an alcohol to make biodiesel. Hydrotreating reacts those same oils and fats with hydrogen to make drop-in renewable diesel and SAF. And thermochemical and enzymatic routes break down tough, fibrous biomass that cannot simply be fermented. The fuller walkthrough is on how biofuels are made.

Feedstocks decide almost everything

If one factor governs a biofuel’s cost, scale and climate value, it is the feedstock. Sugar and starch crops (sugarcane, corn) feed ethanol; oils and fats (soybean, rapeseed, used cooking oil, tallow) feed biodiesel and renewable diesel; and cellulosic biomass (residues, grasses, wood) and wastes feed the advanced category. The same fuel can have a very different lifecycle footprint depending on which feedstock it starts from and how that feedstock is grown and sourced — which is exactly what modern carbon-based fuel policy measures and rewards.

First-generation and advanced fuels

Biofuels are often grouped by feedstock generation. First-generation fuels come from food crops — corn and sugarcane for ethanol, soybean and rapeseed oil for biodiesel — and are mature, low-cost and widely produced. Advanced and cellulosic biofuels use non-food biomass instead: corn stover and straw, wood and forestry residues, dedicated energy grasses, used cooking oil and municipal waste. These generally carry lower indirect land-use impacts and lower lifecycle carbon, but are harder and costlier to convert, which is why they remain a smaller — though strategically important — share of supply. The persistent gap between the promise of cellulosic fuel and the volume actually produced is one of the defining tensions of the industry.

Policy is the other half of the story

Biofuel markets are shaped as much by regulation as by chemistry. In the United States the Renewable Fuel Standard sets the annual volumes of renewable fuel that must be blended into the nation’s transport fuel. State and regional low-carbon fuel standards — pioneered by California’s LCFS — go further, scoring each fuel by its carbon intensity and rewarding the lowest-emitting pathways, which is why a fuel like sugarcane ethanol can command a premium. Blend levels (E10, E15, E85), engine-compatibility rules and import policy all further shape what actually reaches the pump.

Two further levers complete the policy picture. Blend levels — E10, E15 and E85 for ethanol, B5 through B100 for biodiesel — set how much renewable fuel can actually reach engines, and the “blend wall” around E10 is a recurring constraint on how far volume mandates can push. And vehicle-capability proposals such as the Open Fuel Standard would regulate what cars can burn rather than what fuel is sold — a different lever again. Volume mandates, carbon scoring, blend rules and vehicle capability are the four ways policy shapes this market, and they interact in ways that decide which fuels are worth producing.

Scale, limits and outlook

Biofuels are a large and established part of the fuel supply rather than a fringe experiment: ethanol is blended into the great majority of the world’s gasoline, and biodiesel and renewable diesel are a routine part of the diesel pool in many markets. But they are not unlimited. Feedstock availability, the food-versus-fuel question, the engineering ceilings on how much can be blended, and the cost of converting tougher biomass all bound how far first-generation fuels can grow. That is why attention has shifted toward wastes, residues and cellulosic feedstocks, and toward drop-in fuels such as renewable diesel and sustainable aviation fuel that can serve the parts of transport hardest to electrify.

The likely role of biofuels, then, is complementary rather than total: lowering the carbon of the liquid fuels and engines already on the road today, and supplying the sectors — aviation, shipping, heavy freight — where liquid fuels will persist longest. Understanding that role means understanding the fuels, the feedstocks, the production routes and the policies together, which is what the rest of this reference sets out to do, in plain language and without the jargon.