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 FAQS
  1. What country is the world's largest oil producer?

    The Kingdom of Saudi Arabia is often cited as the world's largest oil producer. The country produces 13.24% of the oil consumed ... Read Full Answer >>
  2. Are there significant seasonal patterns in the electronics sector?

    There is strong seasonality in the electronics sector, with sales of nearly all kinds of electronics – computers, digital ... Read Full Answer >>
  3. Who are Family Dollar's (FDO) main competitors?

    North Carolina-based Family Dollar (FDO) is one of the biggest discount retailers in North America. Competitors include companies ... Read Full Answer >>
  4. Who are Target's (TGT) main competitors?

    Target (TGT) is a discount retailer, which means that it generates revenue by offering competitively priced consumer goods. ... Read Full Answer >>
  5. How is fair value calculated in the futures market?

    The fair value is the theoretical calculation of how a futures stock index contract should be valued considering the current ... Read Full Answer >>
  6. What is the difference between marginal benefit and marginal revenue?

    Marginal benefit measures the consumer's benefit of consuming an additional unit of a good or service, while marginal revenue ... Read Full Answer >>
Related Articles
  1. 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.
  2. Mutual Funds & ETFs

    Investing In Oil And Gas UITs

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

    Clean Or Green Technology Investing

    Innovations in energy and consumption grow as companies adopt them to reduce costs.
  4. 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.
  5. Options & Futures

    Top 10 Green Industries

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

    Spotlight On The Solar Industry

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

    The Biofuels Debate Heats Up

    Interest in these new energy sources is growing. Should you buy in?
  8. Savings

    20 Ways To Pay Less At Costco

    There are plenty of little-known Costco shopping hacks that can save you big bucks at the register, and help you avoid the notorious spending hangover.
  9. Stock Analysis

    Costco, Target or Walmart: Which is the Best Bet?

    These three retailers have all been long-term winners. It that likely to continue? If so, which is the best bet?
  10. Charts & Patterns

    Should Investors Get Into Oil Now?

    Oil has enjoyed a steady climb after a violent plunge. Where is it going next, and how can investors profit?

You May Also Like

Hot Definitions
  1. Yield Curve

    A line that plots the interest rates, at a set point in time, of bonds having equal credit quality, but differing maturity ...
  2. Productivity

    An economic measure of output per unit of input. Inputs include labor and capital, while output is typically measured in ...
  3. Variance

    The spread between numbers in a data set, measuring Variance is calculated by taking the differences between each number ...
  4. Terminal Value - TV

    The value of a bond at maturity, or of an asset at a specified, future valuation date, taking into account factors such as ...
  5. Rule Of 70

    A way to estimate the number of years it takes for a certain variable to double. The rule of 70 states that in order to estimate ...
  6. Risk Premium

    The return in excess of the risk-free rate of return that an investment is expected to yield. An asset's risk premium is ...
Trading Center