Biofuels have become an increasingly important component of both U.S. agricultural and energy policies, with reaches in farming, sustainable energy production, and food security.

Building on our biofuel podcast with Colin Murphy of UC Davis and our sustainable aviation fuels article, Dirt to Dinner will look at the complex biofuels story with a new series of articles on the subject. Let’s start with the basics…

What are biofuels?

When driving your car, you might picture your engine consuming ancient crushed plants and sea creatures as the fuel bringing you to your destination. But do you also picture your engine burning liquid corn?

Biofuels are a sustainable fuel that affects all aspects of transportation.

Biofuels are a petroleum-alternative fuel that gives you the ability to drive, fly, or receive your Amazon delivery while using corn, soybeans, algae, beef tallow, or even used cooking oil as fuel in the gas tank.

Biofuels capture the solar energy that drives photosynthesis in plants and ultimately, animals, and converts it into energy. Emitting fewer carbon emissions than petroleum, the stock materials for biofuels are referred to as “biomass.”

Corn and soybean oil are major sources for the raw material needed to produce biofuels. But myriad other materials can also be sources of biomass, including wheat, sugarcane, canola and other naturally grown renewable crops and products.

What are the types of biofuels?

Biofuels are made into two products: ethanol and jet fuel.  Ethanol is made through fermentation, mainly from the sugar in corn and some plants. Diesel is made from fats in cooking oils, animal fats, and oilseeds.

The U.S. Energy Information Administration (EIA) notes these primary types of biofuels:

• Ethanol: an alcohol fuel blended up to 20% with petroleum gasoline for vehicles.
• Biodiesel: a biofuel usually blended with petroleum diesel for consumption. Biodiesel can be made from a variety of oily materials, animal fats, vegetable oils, recycled cooking oils, even algae. Regular diesel engines can handle up to 20% of biodiesel. This category represents the second-largest share of U.S. biofuel production and consumption at 9 percent in 2022.
• Renewable diesel: a fuel chemically like petroleum diesel fuel used as a drop-in fuel or a petroleum diesel blend. This means that it can replace 100% of petroleum diesel without damaging the engine – and it doesn’t freeze. A bonus in long, cold winters. It accounts for about 8 percent of total U.S. biofuel production and 9 percent of consumption (2022).
• Biogas: a fuel that can supply the power grid. This process breaks down material such as agricultural waste, manure, municipal waste, sewage, and food waste with an anaerobic digestor to create methane. This is like natural gas and is used as such.
• SAF: a sustainable aviation fuel that comes from corn, oilseeds, algea, fats, oils, and in the future, garbage. These ‘feedstocks’ are used to replace Jet A engine fuel. Today’s jet engines can only take on 50% of their fuel as SAF without changing their configuration. Right now, the market is not even 10%.
• “Other” biofuels: a catch-all grouping that covers such things as renewable heating oil, renewable naphtha, renewable gasoline, and other biofuels that are in various stages of development and commercialization. Biomass is rich in the complex hydrocarbons that characterize jet fuel and other products.

The biofuels industry often refers to the evolving mix of types in terms of “generations”.  First generation biofuels are made from edible biomass. Second generation biofuels are derived from non-edible biomass, including rice husks, straw and even sawdust. Third generation refers to algae biomass, and the fourth algae that is genetically engineered specifically for biofuel production.

How are biofuels used today?

Biofuels are used as energy sources, most commonly but not exclusively in transportation-related fuels.

The ethanol blended into gasoline probably is most visible and recognized biofuel for the average person. Some form of biofuel has been around almost from beginning of civilization, but the modern biofuel world has been built around the development of the internal combustion engine.

Ethanol was first used as far back as 1826 to power an engine, and its production actually taxed by the federal government to help fund the Civil War. It also proved to be an attractive fuel source during the 1920s and 1930s, and especially during World War II to help contend with gasoline shortages. (For additional detail on the history of ethanol, visit the Energy Information Administration at https://www.eia.gov.)

Beginning in the 1970s, anyone remember those long gas lines during the OPEC oil crisis?) and through to today, rising petroleum costs and ambitious environmental objectives have helped fuel legislative efforts to expand biofuels and in particular ethanol. Because of air pollution, and today’s global warming, numerous scientific and environmental groups made reduction in the use of fossil fuels a top priority.

For example, comments made in Science Direct seemed to summarize the case for finding alternative sources of energy – and the reasoning behind public policy that supported development of a viable ethanol industry:

Government-mandated use of ethanol has driven a steady expansion in ethanol demand. At this time, as much as 82 percent of the biofuel produced in the United States is in the form of ethanol, with 72 percent added gasoline for vehicle use. The remaining uses of ethanol are random categories such as solvents, cosmetics, pharmaceuticals, antifreeze, plastics…the list is endless.

Further growing biofuel’s demand is its utility in the energy space. Bioenergy helps generate heat and electricity, with sources generating an estimated 150 gigawatts of power in 2023, according to Statista. That’s the same amount of wind-power generated in the United States in 2023. Or to use a transportation analogy, the same power generated by 620,000 base-model Ford Mustangs!

A Growing Market

Crude oil daily production averaged 13,228 barrels a day in 2024 with biofuels accounting for 1,375 barrels, an uptick from 2023’s 1,299 and 2022’s 1,203 barrels.

In 2023, over 98 percent of U.S. gasoline contains at least 10 percent ethanol, representing about one-tenth of the fuel used in all U.S. vehicles.

Analysis by the consulting firm McKinsey predicts demand for sustainable fuels will quadruple by 2050, with the sustainable fuel making up as much as 37 percent of all energy used in the transportation sector.

The USDA estimates the value of exports of U.S. biofuels in 2024 reached $5.1 billion, with a three-year average of biofuel exports at $5.2 billion, with most going to Canada and Europe.

Fuel ethanol accounted for the largest share of gross and net exports of biofuels. But the value of biodiesel and blends enjoyed a noteworthy three-year average of $1.3 billion.

The Global Perspective

The rising global concern over climate change also helped spark an increase in use of biofuels around the world. The biggest biofuel-using countries all around the world are the United States, Brazil, Canada, and most European countries, Australia, China and Thailand.

The enormous productive capacity of the U.S. agricultural system has become a major factor in meeting the rising global demand for biofuels. Brazil also is a major player in global biofuel production and trade, capitalizing on its enormous growth in production of crops, notably soybeans.  (Soybean oil is an especially important source of biomass.)