Biofuel

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.

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.

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