Biofuel

What is 'Biofuel'

Biofuel is 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.

BREAKING DOWN '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. Animal Mortality Insurance

    Financial protection for businesses in which animals play a valuable ...
  2. Fuel Tax Credit

    A federal subsidy that allows businesses to reduce their taxable ...
  3. Biothermal Energy

    The concept of utilizing composting material to generate heat ...
  4. Black Liquor Tax Credit

    A term coined by the forest-products industry to describe an ...
  5. Biodiesel

    A fuel derived from organic oils, such as vegetable oil, rather ...
  6. Energy Derivatives

    A derivative instrument in which the underlying asset is based ...
Related Articles
  1. Markets

    3 Economies Benefiting From Biofuels

    Learn about what the largest biofuel-producing countries are achieving and how these fuels are helping their economies through jobs and waste reduction.
  2. Markets

    Debunking Biofuels: Do They Really Raise Food Prices?

    Learn about the two sides of the argument on the effect biofuels have on food prices and about other factors that affect food prices.
  3. Investing

    The 5 Countries That Produce the Most Sugar

    Learn what countries benefit the most from the world's obsession with sweets and what the possibilities of clean fuels from sugar could mean for them.
  4. Markets

    The Basics of FuelCell's Cost Share Carbon Reduction Project (FCEL)

    Discover how FuelCell Energy's carbon capture project with the Department of Energy works and how it could lead to cleaner air and huge profits.
  5. Insights

    NB SRI Team In Support of Limiting Methane Emissions

    On March 10, 2016, the US and Canada announced that the two countries would aim to cut methane (CH4) emissions in the oil and gas sector by 40-45% over the next decade.
  6. Insights

    Pixar Vs. Everyone Else: Who Is the Next Animation Star? (DIS, CMCSA)

    Find out who is quickly closing in on Disney and Pixar for the animated movie crown. What companies offer investors an opportunity in the crowded market.
  7. Markets

    How Oil and Ethanol Combine to Make Valero Rich (VLO, PSX)

    Despite a lagging oil sector, Valero continues to have good results with its ethanol and oil refinery businesses.
  8. Trading

    What Is A Derivative?

    A derivative is a security whose price is dependent upon or derived from one or more underlying assets. Learn more on how investors can use this financial instrument in their trading strategies.
  9. Markets

    Why European Energy Business Is in Decline

    We look at what's hitting the European energy business and the outlook for the sector in the mid- to long-term.
  10. Managing Wealth

    The Top 4 Oil Companies That Protect the Environment (XOM, SUN)

    Read about some of the most environmentally conscious oil companies that have actual track records of investments in research and cleanup.
RELATED FAQS
  1. If my home runs power off the grid, what is the specific environmental impact?

    Going off the grid, or using solar energy, can result in much more than saving the homeowner money. It can help the planet ... Read Answer >>
  2. 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 ... Read Answer >>
  3. How big is the derivatives market?

    Examine the potential size of the total derivatives market, and learn how different calculations can reduce the estimate ... Read Answer >>
  4. How much of the United States' energy comes from oil and gas?

    Examine the energy sources for the United States, and learn how much of the total U.S. energy supply comes from the oil and ... Read Answer >>
  5. What are the main substitutes for oil and gas energy?

    Read about some of the major substitute sources of energy that compete with fossil fuels -- oil, natural gas and coal -- ... Read Answer >>
  6. What expiry months are typically available for derivatives?

    Discover more about the derivatives market and learn about the varying expiration months for derivatives in different financial ... Read Answer >>
Hot Definitions
  1. GBP

    The abbreviation for the British pound sterling, the official currency of the United Kingdom, the British Overseas Territories ...
  2. Diversification

    A risk management technique that mixes a wide variety of investments within a portfolio. The rationale behind this technique ...
  3. European Union - EU

    A group of European countries that participates in the world economy as one economic unit and operates under one official ...
  4. Sell-Off

    The rapid selling of securities, such as stocks, bonds and commodities. The increase in supply leads to a decline in the ...
  5. Brazil, Russia, India And China - BRIC

    An acronym for the economies of Brazil, Russia, India and China combined. It has been speculated that by 2050 these four ...
  6. Brexit

    The Brexit, an abbreviation of "British exit" that mirrors the term Grexit, refers to the possibility of Britain's withdrawal ...
Trading Center