Biofuel

AAA

DEFINITION of 'Biofuel'

A type of energy derived from renewable plant and animal materials. Examples of biofuels include ethanol (often made from corn in the United States and sugarcane in Brazil), biodiesel (vegetable oils and liquid animal fats), green diesel (derived from algae and other plant sources) and biogas (methane derived from animal manure and other digested organic material). Biofuels are most useful in liquid or gas form because they are easier to transport, deliver and burn cleanly.

INVESTOPEDIA EXPLAINS 'Biofuel'

Individuals concerned about energy security and carbon dioxide emissions see biofuels as a viable alternative to fossil fuels. However, biofuels also have shortcomings. For example, it takes more ethanol than gasoline to produce the same amount of energy, and critics contend that ethanol use is extremely wasteful because the production of ethanol actually creates a net energy loss while also increasing food prices.

RELATED TERMS
  1. Carbon Dioxide Tax

    A tax on businesses and industries that produce carbon dioxide ...
  2. Fuel Tax Credit

    A federal subsidy that allows businesses to reduce their taxable ...
  3. Alcohol Fuels Credit

    One of several general business credits included on the General ...
  4. Alternative Fuels Tax Credit

    A non-refundable tax credit awarded to taxpayers who use non-alcohol ...
  5. Cash For Clunkers

    A program that allows car owners to trade in their old, less ...
  6. Gas Guzzler Tax

    An additional tax on the sale of vehicles that have poor fuel ...
Related Articles
  1. Economics

    What country is the world's largest oil producer?

    Learn which countries are considered to be the largest oil producers in the world, whether natural gas and biofuel are taken into consideration.
  2. Home & Auto

    Getting A Grip On The Cost Of Gas

    Feeling overwhelmed by rising oil prices? We offer some tips that will save you money.
  3. Mutual Funds & ETFs

    Investing In Oil And Gas UITs

    Unit investment trusts provide direct exposure to the energy sector, fueling better returns.
  4. Investing

    Clean Or Green Technology Investing

    Innovations in energy and consumption grow as companies adopt them to reduce costs.
  5. Options & Futures

    Fueling Futures In The Energy Market

    The energy market influences every aspect of our lives, and these four options are its driving force.
  6. Options & Futures

    Top 10 Green Industries

    Put a little green in your wallet by investing in these growing areas.
  7. Options & Futures

    Spotlight On The Solar Industry

    Before you buy into the hype, learn how the industry works and how to spot the winners.
  8. Options & Futures

    The Biofuels Debate Heats Up

    Interest in these new energy sources is growing. Should you buy in?
  9. Investing Basics

    The Strange New World Of The Bitcoin Exchange Futures Market

    We explain the basics of the Bitcoin exchange and futures market.
  10. Chart Advisor

    3 Energy Related Stocks Poised For A Pop

    A sharp decline in energy prices have created an interested opportunity in several oil-and-gas related companies. Given the strong downtrends apparent on the charts, most traders would use recent ...

You May Also Like

Hot Definitions
  1. Portfolio Turnover

    A measure of how frequently assets within a fund are bought and sold by the managers. Portfolio turnover is calculated by ...
  2. Commercial Paper

    An unsecured, short-term debt instrument issued by a corporation, typically for the financing of accounts receivable, inventories ...
  3. Federal Funds Rate

    The interest rate at which a depository institution lends funds maintained at the Federal Reserve to another depository institution ...
  4. Fixed Asset

    A long-term tangible piece of property that a firm owns and uses in the production of its income and is not expected to be ...
  5. Break-Even Analysis

    An analysis to determine the point at which revenue received equals the costs associated with receiving the revenue. Break-even ...
  6. Key Performance Indicators - KPI

    A set of quantifiable measures that a company or industry uses to gauge or compare performance in terms of meeting their ...
Trading Center