Biofuels: What They Are, How They’re Made, and Where They Fit in the Energy Transition

Biofuels are liquid and gaseous fuels made from recently living biological materials—such as crops, agricultural residues, municipal waste, or algae—used as substitutes for fossil fuels in transport, heating, and power. When sourced and produced sustainably, they can lower lifecycle greenhouse-gas emissions compared with petroleum fuels, especially in hard-to-electrify sectors like aviation and shipping.

What are biofuels?

Biofuels are energy carriers derived from biomass. They include alcohols like ethanol, diesel substitutes such as fatty acid methyl esters (FAME) and hydrotreated vegetable oil (HVO, often called renewable diesel), gaseous fuels like biogas/biomethane, and jet fuels produced from biological feedstocks. Unlike fossil fuels, biofuels’ carbon originates from atmospheric CO2 captured by plants or microorganisms in the near past. However, they are not inherently “carbon neutral”: overall climate impact depends on farming practices, process energy, land-use change, and how co-products are handled across a full lifecycle assessment.

Main types of biofuels and where they are used

Biofuels come in several forms tailored to different engines and infrastructure. The most common types and their typical uses are outlined below.

• Ethanol: An alcohol produced by fermenting sugars and starches (e.g., sugarcane, corn). Widely blended into gasoline (E10/E15); high blends (E85) for flexible-fuel vehicles.
• Biodiesel (FAME): Made by transesterifying vegetable oils or waste fats with methanol. Blended into diesel (B5–B20) or used as B100 in compatible engines, especially in fleets.
• Renewable diesel (HVO): Produced by hydrotreating oils/fats. Chemically similar to petroleum diesel, it is “drop-in” and usable up to 100% (R100) in many modern diesel engines.
• Biogas/Biomethane: Methane-rich gas from anaerobic digestion of manures, food waste, or sewage; upgraded biomethane (RNG) is injected into gas grids or used as CNG/LNG vehicle fuel.
• Sustainable Aviation Fuel (SAF): Jet fuel substitutes from biological pathways (e.g., HEFA from waste oils, gasification–Fischer–Tropsch, alcohol-to-jet) approved today mainly in blends up to 50% with Jet A; 100% SAF operations are under certification trials.
• Bio-methanol and Bio-DME: Oxygenated fuels made from biomass or biomethane, gaining attention for shipping and certain industrial applications.
• Bio-oil and Hydrothermal Liquids: Intermediate oils from fast pyrolysis or hydrothermal liquefaction of residues; can be upgraded to drop-in fuels.

Together, these fuels supplement or replace petroleum products across road, aviation, marine, and stationary uses, with “drop-in” fuels (HVO, many SAFs) offering the easiest adoption in existing engines and infrastructure.

Feedstocks: What biofuels are made from

Feedstocks span food and non-food crops, wastes, and residues. Their sustainability and local availability strongly influence cost, emissions, and scalability.

• Sugar and starch crops: Sugarcane, sugar beet, and corn for ethanol; sweet sorghum in some regions.
• Oil crops: Soy, rapeseed/canola, palm, sunflower for biodiesel and HVO; camelina and carinata as low-input options in some climates.
• Waste oils and fats: Used cooking oil (UCO), animal fats, and greases (tallow, yellow grease) prized for low carbon intensity.
• Residues and lignocellulosic biomass: Agricultural straw, corn stover, forestry residues, and dedicated energy crops (miscanthus, switchgrass) for cellulosic fuels.
• Algae: Microalgae and macroalgae (seaweed) with high oil or carbohydrate content; still pre-commercial at scale.
• Municipal and industrial wastes: Food waste, sewage sludge, and the biogenic fraction of municipal solid waste for biogas or advanced liquid fuels.

Shifting toward wastes, residues, and non-food energy crops generally improves climate performance and reduces land-use pressure compared with conventional (food-based) feedstocks.

How biofuels are made

Biomass is converted into usable fuels via biochemical and thermochemical processes. The choice depends on feedstock type, desired fuel, and cost.

Common production pathways

The following pathways represent the major routes from biomass to fuel used in today’s markets or advancing toward scale.

1. Fermentation to ethanol: Yeast ferments sugars/starches; advanced methods break down cellulose and hemicellulose for cellulosic ethanol.
2. Transesterification to biodiesel (FAME): Oils/fats react with methanol and a catalyst; glycerin is a co-product.
3. Hydrotreating to HVO/renewable diesel and SAF (HEFA): Hydrogen removes oxygen from oils/fats; resulting hydrocarbons mirror diesel/jet fuels.
4. Anaerobic digestion to biogas: Microbes decompose wet organic matter; gas is upgraded to biomethane for grid or vehicle fuel.
5. Gasification + Fischer–Tropsch: Solid biomass or biogenic waste converted to syngas, then synthesized into diesel/jet “biomass-to-liquids.”
6. Alcohol-to-jet (ATJ): Converts ethanol or isobutanol into synthetic jet fuel components.
7. Pyrolysis and hydrothermal liquefaction (HTL): Thermally decompose biomass to bio-crude, then upgrade to drop-in fuels.

Each route has distinct capital, feedstock, and energy requirements; hydrotreating and anaerobic digestion are mature, while lignocellulosic fuels and gasification-based SAF are scaling with new policy support.

Performance, blending, and infrastructure

Compatibility with existing engines and fueling systems varies by fuel type, influencing how quickly each can scale in real-world fleets.

• Gasoline blends: E10 is standard in many countries; E15 is approved for model year 2001+ cars in the U.S.; E85 for flex-fuel vehicles.
• Diesel blends: Biodiesel commonly used at B5–B20; B100 used in some modern engines with manufacturer approval and cold-flow management.
• Renewable diesel: Chemically “drop-in,” usable as R100 in many on- and off-road engines without modifications.
• Aviation: ASTM-certified SAF pathways are blended today typically up to 50% with Jet A; several 100% SAF demonstrations have flown, with approvals in development.
• Gaseous fuels: Biomethane works in existing CNG/LNG vehicles and gas networks with appropriate specification and tracking.

Drop-in fuels (HVO, many SAFs) minimize infrastructure changes, while high-ethanol or biodiesel blends require vehicle compatibility and seasonal handling.

Energy density differs from petroleum fuels: gasoline ~32 MJ/L; ethanol ~21 MJ/L; diesel ~35–36 MJ/L; biodiesel ~33 MJ/L; renewable diesel and Jet A ~34–35 MJ/L; methanol ~16 MJ/L. Lower energy density can reduce mileage at high blend levels unless engines are optimized.

Environmental impacts and climate performance

Lifecycle greenhouse-gas (GHG) performance varies by feedstock and process. Independent certification and robust carbon accounting are critical to ensure real climate benefits.

• Sugarcane ethanol: Typically 60–90% lower GHG than gasoline, especially with bagasse cogeneration.
• Corn ethanol (modern plants): Often 20–50% lower than gasoline; best-in-class plants with efficient farming, renewable process energy, and carbon capture can be higher.
• Cellulosic ethanol: Generally >80% lower than gasoline if made from residues or dedicated energy crops without land-use change.
• Used cooking oil/tallow HVO or biodiesel: Commonly 80–90% lower than diesel due to waste-based feedstocks.
• Soy/rapeseed biodiesel: Roughly 50–70% lower than diesel, depending on farming inputs and co-product credits.
• Biomethane from manure: Can achieve net-negative emissions by avoiding methane leaks from conventional manure storage.

Beyond CO2, biofuels can reduce particulate matter and carbon monoxide; biodiesel may slightly increase NOx in older engines, while ethanol can raise acetaldehyde—factors managed with modern controls. Indirect land-use change (ILUC), fertilizer-related nitrous oxide (a potent GHG), water use, and biodiversity impacts are key risks; sustainability frameworks (e.g., RSB, ISCC) and strong land protections mitigate them.

Policy and market landscape (2024–2025)

Policies drive most biofuel deployment, with recent rules emphasizing advanced fuels, aviation, and verified carbon reductions.

• European Union: RED III (2023) raises the overall 2030 renewables target to 42.5% (with a 45% aspiration). In transport, members can choose a 29% renewable share or a 14.5% GHG-intensity reduction, including at least 5.5% combined advanced biofuels and e-fuels, with a minimum 1% e-fuels. ReFuelEU Aviation mandates minimum SAF shares starting at 2% in 2025, 6% by 2030, rising to 70% by 2050, with a synthetic (e-fuel) sub-target.
• United States: The Renewable Fuel Standard (RFS) continues with set volumes through 2025; California’s Low Carbon Fuel Standard (LCFS) and similar state programs credit fuels by carbon intensity. The Inflation Reduction Act created a SAF tax credit (2023–2024) and a technology-neutral Clean Fuel Production Credit (45Z) from 2025–2027, rewarding verified lifecycle GHG reductions.
• International aviation: ICAO’s CORSIA entered its first phase in 2024 (through 2026), using approved SAF and other measures to offset growth in international flight emissions.
• Shipping: The IMO’s strengthened 2023 strategy targets net-zero GHG around 2050 and calls for uptake of low-/zero-GHG fuels; bio-methanol and bio-LNG are among candidates, alongside e-fuels and ammonia.
• Brazil: RenovaBio incentivizes verified emissions cuts via CBIO credits; sugarcane ethanol and biodiesel are well established, with high blends (e.g., E27 gasoline).
• India and Southeast Asia: India is rolling out E20 gasoline by mid-2020s and promoting waste-to-fuel; Indonesia has implemented B35 biodiesel and is exploring higher blends.

These frameworks increasingly favor advanced, waste- and residue-based fuels and SAF, with strict sustainability and traceability requirements to ensure genuine emissions reductions.

Pros, limits, and where biofuels fit alongside electrification

Biofuels are a pragmatic tool in the broader decarbonization toolkit. They complement electrification, hydrogen, and efficiency—especially where batteries are impractical today.

• Best-fit applications: Aviation (SAF), long-haul trucking and off-road (renewable diesel), marine (bio-methanol/biomethane), and regions with abundant sustainable residues/wastes.
• System value: Uses existing engines and logistics (for drop-in fuels), reduces tailpipe pollutants in many contexts, and can leverage rural economies.
• Negative-emissions potential: Pairing biomass with carbon capture (BECCS) can yield net removals if feedstocks are sustainable and land impacts are managed.

In these niches, biofuels can deliver near-term emissions cuts while zero-emission options mature and scale.

Key challenges remain and shape responsible deployment.

• Feedstock limits: Truly sustainable wastes and residues are finite; scaling must avoid deforestation, habitat loss, or competition with food.
• Variable climate gains: Benefits hinge on rigorous lifecycle accounting, methane management, and preventing ILUC.
• Cost and investment: Advanced pathways (cellulosic, gasification-to-liquids, SAF) need durable policy signals and offtake contracts.
• Air quality and operability: Some blends affect NOx or cold-flow properties; standards and engine calibrations address these.
• Tracking and integrity: Certification, chain-of-custody systems, and digital registries are essential to avoid double counting and fraud.

Addressing these constraints—through sustainability standards, better agronomy, methane capture, and stable policy—maximizes climate value and public confidence.

Frequently asked clarifications

Are biofuels carbon neutral? No. Combustion CO2 is biogenic, but farming, processing energy, land-use change, and methane or nitrous oxide emissions can add significant warming. That’s why lifecycle analysis and sustainability safeguards are central.

Will biofuels replace all fossil fuels? Unlikely. Most analyses anticipate limited sustainable feedstock, so biofuels will target sectors and uses where alternatives are hardest, while electrification decarbonizes most light-duty transport.

Summary

Biofuels are fuels from biological sources that can displace petroleum in transport, power, and heat. Made via fermentation, hydrotreating, digestion, and other pathways from crops, residues, and wastes, they can deliver substantial lifecycle GHG reductions—especially in aviation and heavy-duty transport—when produced under strict sustainability standards. With policies in the EU, U.S., and beyond accelerating advanced fuels and SAF, biofuels are poised to play a targeted but important role alongside electrification and hydrogen in the global energy transition.