What Is Biofuel?

Biofuel is a type of renewable energy source derived from microbial, plant, or animal materials. Examples of biofuels include ethanol (often made from corn in the United States and sugarcane in Brazil), biodiesel (sourced from 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 can be solid, liquid, or gaseous. They are most useful in the latter two forms as this makes it easier to transport, deliver, and burn cleanly.

Key Takeaways

  • Biofuels are a class of renewable energy derived from living materials.
  • The most common biofuels are corn ethanol, biodiesel, and biogas from organic byproducts.
  • Energy from renewable resources puts less strain on the limited supply of fossil fuels, which are considered nonrenewable resources.

Understanding Biofuel

Global demand for energy is expected to continue growing substantially and it's widely recognized that alternative, sustainable solutions need to be found to address those needs. Lots of people in the energy industry believe biofuel could be the answer, viewing it as vitally important to future energy production because of its clean and renewable properties.

Biofuel functions similarly to nonrenewable fossil fuels. Both burn when ignited, releasing energy that can be used to power cars or heat homes. The main difference between them is that biofuels can be grown indefinitely and generally cause less damage to the planet.

Many of the world's major oil companies are now investing millions of dollars in advanced biofuel research, including Exxon Mobil Corp. (XOM). America's largest oil company is focusing on advanced biofuels that do not compete with food or water supplies, with most of its allocated funds dedicated to transforming algae and plant waste into fuel that can be used for transportation.

ExxonMobil has invested more than $300 million in biofuel research over the last decade.

Despite its enthusiasm, ExxonMobil did warn, however, that fundamental technology improvements and scientific breakthroughs are still necessary in both biomass optimization and the processing of biomass into viable fuels.

Limitations of 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. 

Biofuels have also become a point of contention for conservation groups, who argue that bio-crops would go to better use as a source of food rather than fuel. Specific concerns center around the use of large amounts of arable land that are required to produce bio-crops, leading to problems such as soil erosion, deforestation, fertilizer run-off, and salinity.

The Algae Alternative

To help mitigate the problem of large arable land use, companies such as ExxonMobil are turning to water-based solutions in the form of algae production. Exxon claims that algae can be cultivated on land unsuitable for other purposes with water that can’t be used for food production.

In addition to using non-arable land and not requiring the use of freshwater, algae could potentially yield greater volumes of biofuels per acre than other sources. The other advantage to using algae over other bio-sources is that it can be used to manufacture biofuels similar in composition to today’s transportation fuels. This would go a long way to replacing the conventional fossil fuels of gasoline and diesel.