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Biofuels explained

The term biofuels usually applies to liquid fuels and blending components produced from biomass materials called feedstocks. Most biofuels are used as transportation fuels, but they may also be used for heating and electricity generation. Gaseous fuels produced from biomass that are used directly as a gas or converted to liquid fuels may qualify for use in government programs that promote or require use of biofuels.

The terminology for different types of biofuels used in government legislation and incentive programs and in industry branding and marketing efforts varies. For example, the names of biofuels may include preceding the type or use of the fuel with bio (such as biodiesel or biojet) or with the words advanced, alternative, clean, green, low-carbon, renewable, or sustainable (such as sustainable aviation fuel). The definitions for these biofuels may also differ depending on the language in government legislation and programs that require or promote their use and among industry and other organizations.

Production and consumption of biofuels in the United States have generally increased each year since the early 1980s. The increases are largely because of various government policies and programs intended to reduce the use of transportation fuels made from fossil fuels by promoting and/or requiring the use of biofuels. The Volumetric Ethanol Excise Tax Credit for blending ethanol into motor gasoline from 2005 through 2011 contributed to large increases in ethanol consumption during the period when the incentive was in effect. A tax credit of $1.00 per gallon currently in place for biodiesel and renewable diesel fuel blenders is helping to increase the use of those fuels. Major major government programs contributing to increases in U.S. biofuels production and consumption in the past 15 years are the federal Renewable Fuel Standard (RFS) Program and California’s Low Carbon Fuel Standard (LCFS). Oregon and Washington have also established clean fuel programs.

In 2021, about 17.5 billion gallons of biofuels were produced in the United States and about 16.8 billion gallons were consumed. The United States was a net exporter of about 0.8 billion gallons of biofuels in 2021, with fuel ethanol accounting for the largest share of gross and net exports of biofuels.

Most of biofuel consumption occurs as a blend with refined petroleum products such as gasoline, diesel fuel, heating oil, and kerosene-type jet fuel. However, some biofuels do not require blending with their petroleum counterparts and are referred to as drop-in biofuels.

The U.S. Energy Information Administration (EIA) publishes data on four major categories of biofuels that qualify for use in the federal RFS Program:1

  • Ethanol—an alcohol fuel that is blended with petroleum gasoline for use in vehicles and accounted for the largest shares of U.S. biofuel production (85%) and consumption (82%) in 2021.
  • Biodiesel—a biofuel that is usually blended with petroleum diesel for consumption and accounts for the second-largest shares of U.S. biofuel production (11%) and consumption (12%) in 2021.
  • Renewable diesel—a fuel chemically similar to petroleum diesel fuel for use as a drop-in fuel or a petroleum diesel blend with small but growing U.S. production and consumption. Renewable diesel's percentage shares of total U.S. biofuels production and consumption were about 3% and 5% respectively in 2021.
  • Other biofuels—include renewable heating oil, renewable jet fuel (sustainable aviation fuel, alternative jet fuel, biojet), renewable naphtha, renewable gasoline, and other emerging biofuels that are in various stages of development and commercialization.

Gaseous fuels that may be compressed for use as a gaseous biofuel or liquefied for use as a liquid biofuel include biogas (renewable natural gas) and hydrogen produced using renewable resources.

The table and graphs below provide annual data for the four types of biofuels for which EIA publishes data.

U.S. biofuels supply and disposition in 2021 (billion gallons)
Production Imports Exports Consumption
Fuel ethanol 15.01 0.06 1.25 13.94
Biodiesel 1.64 0.20 0.18 1.65
Renewable diesel 0.81 0.39 NA 1.16
Other biofuels 0.08 NA NA less than 1
Total 17.55 0.66 1.43 16.83
Source: U.S. Energy Information Administration, Monthly Energy Review, June 2022, preliminary data.
Note: Excludes stocks; NA is not available.

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1 U.S. Energy Information Administration, Monthly Energy Review, Renewable energy.

Last updated: July 19, 2022.