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Biofuels basics

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 (biogas) 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.

Most of the biofuels in use today are liquid fuels including ethanol and biomass-based diesel fuels such as biodiesel, renewable diesel, and other biofuels, which includes sustainable aviation fuels. Biofuels used as transportation fuels are usually blended with petroleum fuels (gasoline and diesel fuel) made from crude oil, but some can be used in their pure form without any blending. Biodiesel and renewable diesel fuels can be used as replacements for distillate fuel for use in vehicles and for heating. Gaseous biofuels, which may be called biogas, biomethane, or renewable natural gas, can be used as transportation fuels and for heating fuels.

Using biofuels can reduce the need to import crude oil from other countries to make fuels for cars, trucks, trains, and planes. Biofuels are also cleaner-burning fuels and are considered to have lower carbon-dioxide emissions than fuels made from fossil fuels. For these reasons, the U.S. federal government and state governments have encouraged the production and use of biofuels for many years with various laws and financial incentives such as the federal Renewable Fuel Standard Program and California's Low Carbon Fuel Standard.

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

  • 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 United States leads the world in biofuels production and consumption

The United States is the world's largest producer and consumer of biofuels. In 2021, about 17.5 billion gallons of biofuels were produced in the United States and about 16.3 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.

Many countries in addition to the United States have developed policies to require or encourage use of biofuels, and world biofuel production and consumption have increased over time. In 1980, world total biofuel production and consumption was about 64,600 thousand barrels per day (or 2.7 million gallons per day), of which nearly all was produced and consumed in Brazil. In 2019, at least 42 countries produced and consumed biofuels: world total biofuels production equaled about 2.69 million barrels per day (or about 113 million gallons per day) and total biofuels consumption was about 2.57 million barrels per day (or about 108 million gallons per day). Five countries accounted for about 78% of total world bioufuels consumption in 2019.

World total biofuels consumption and top five biofuels consuming countries in 2019
  Million gallons per day Percentage share of world total
World total 107.8
United States 44.8 41.6%
Brazil 27.2 25.2%
Indonesia 4.5 4.2%
China 4.3 4.0%
France 3.4 3.2%
All others 23.5 21.8%


Ethanol is a clear, colorless alcohol that can be made from a variety of biomass materials called feedstocks (the raw materials used to make a product). Ethanol feedstocks include grains and crops with high starch and sugar content such as corn, sorghum, barley, sugar cane, and sugar beets. Ethanol can also be made from feedstocks with a high cellulose content including grasses such as switchgrass, trees, and agricultural and forestry residues such as corn cobs and stocks, rice straw, sawdust, and wood chips. Fuel ethanol is made by adding a denaturant to ethanol to make it undrinkable for use as a biofuel. Ethanol is made from these feedstocks in several ways.

USDA researchers adding yeast to begin ethanol fermentation
Microbiologist Nancy Nichols and biochemical engineer Bruce Dien add yeast to a bioreactor to begin ethanol fermentation. Bt and non-Bt corn hybrids were compared for ethanol yields. Photo by Scott Bauer.

Photo Credit: Scott Bauer, USDA Agricultural Research Service (public domain)

Fermentation is the most common method for producing ethanol

The most common ethanol production processes today use yeast to ferment the starch and sugars in corn, sugar cane, and sugar beets. Corn is the main feedstock for fuel ethanol in the United States because of its abundance and low price. The starch in corn kernels is fermented into sugar, which is then fermented into alcohol.

Sugar cane and sugar beets are the most common feedstocks used to make fuel ethanol in other parts of the world. Because alcohol is made by fermenting sugar, sugar crops are the easiest ingredients to convert into alcohol. Brazil, the world's second-largest fuel ethanol producer after the United States, makes most of its fuel ethanol from sugar cane. Most of the cars in Brazil can run on pure ethanol or on a blend of gasoline and ethanol.

Cellulosic ethanol is a large potential source of fuel ethanol

Ethanol can also be produced by breaking down cellulose in plant fibers. Trees, grasses, and agricultural residues are potential feedstocks for cellulosic ethanol production. Trees and grasses require less energy, fertilizers, and water to grow than grains do, and they can also be grown on lands that are not suitable for growing food crops. Scientists have developed fast-growing trees that grow to full size in 10 years. Many grasses can produce two harvests a year for many years without annual replanting. This cellulosic ethanol is considered an advanced biofuel and involves a more complicated production process than fermentation. While there are large potential sources of cellulosic feedstocks, as of the end of 2020, there was no commercial production of cellulosic fuel ethanol in the United States.

United States Department of Agriculture (USDA) research geneticists study switchgrass as a source of ethanol.
Switchgrass can yield almost twice as much ethanol as corn, estimates geneticist Ken Vogel, who is conducting breeding and genetics research on switchgrass to improve its biomass yield and its ability to recycle carbon as a renewable energy crop. Photo by Brett Hampton.

History of ethanol

Model T car
Model T vehicle

Source: Stock photography (copyrighted)

In the 1850s, ethanol was a major lighting fuel. During the Civil War, a liquor tax was placed on ethanol to raise money for the war. The tax increased the price of ethanol so much that it could no longer compete with other fuels such as kerosene. Ethanol production declined sharply because of this tax, and production levels did not begin to recover until the tax was repealed in 1906.

The Model T ran on ethanol

In 1908, Henry Ford designed his Model T, a very early automobile, to run on a mixture of gasoline and alcohol. Ford called this mixture the fuel of the future. In 1919, when Prohibition began, ethanol was banned because it was considered an alcoholic beverage. It could only be sold when mixed with petroleum. Ethanol was used as a fuel again after Prohibition ended in 1933.

Most motor gasoline now contains fuel ethanol

Ethanol use increased temporarily during World War II when oil and other resources were scarce. In the 1970s, interest in ethanol as a transportation fuel was revived as oil embargoes, rising oil prices, and growing dependence on imported oil increased interest in alternative fuels. Since that time, ethanol use and production has been encouraged by tax benefits and by environmental regulations that require cleaner-burning fuels, which have led to large increases in fuel ethanol production and consumption.

In 2005, the United States Congress enacted a U.S. Renewable Fuel Standard (RFS) programRenewable Fuel Standard (RFS) that set minimum requirements for the use of renewable fuels, including ethanol. In 2007, the RFS renewable fuel use targets were set to rise steadily to a level of 36 billion gallons by 2022. Learn more about the history of ethanol in a timeline. Most motor gasoline now sold in the United States is about 10% fuel ethanol by volume.

Use of ethanol as a transportation fuel

Did you know?

The Ford Model T had an engine capable of running on either gasoline or ethanol.

Nearly all gasoline sold in the United States contains fuel ethanol.
gasoline pump

Source: Stock photography (copyrighted)

Pump label required for E15.
E15 label

Source: U.S. Environmental Protection Agency (public domain)

E10, E15, and E85

Gasoline fueling pumps that dispense motor gasoline containing fuel ethanol in the United States identify or label the gasoline according to its ethanol content. There are three basic labelling categories according to the maximum level of the ethanol blend: E10, E15, and E85. A blend of 10% ethanol and 90% gasoline (by volume) is known as E10 gasoline. Motor gasoline with up to 15% ethanol content is called E15. Most of U.S. fuel ethanol consumption occurs in E10 gasoline or less.

E85 is a gasoline-ethanol blend containing 51% to 83% ethanol, depending on geography and season. E85 is defined as an alternative fuel. Although most E85 use in the United States occurs in the Midwest, there are about 4,180 public E85 fueling stations located around the country.

While all models of vehicles sold in the Unites States can use E10, currently, only light-duty vehicles with a model year 2001 or newer can use gasoline blends higher than E10 unless they are a flexible-fuel (flex-fuel) vehicle. Flex-fuel vehicles can run on any mixture of ethanol and gasoline up to E85. Flex-fuel vehicles may be identified by a badge or plaque on the body of the vehicle with terms such as E85, Flex Fuel, or FFV.

Because ethanol contains about 67% of the energy content of gasoline per gallon, use of ethanol blends results in lower vehicle fuel economy (miles traveled per gallon) relative to gasoline that does not contain ethanol. For example, vehicle fuel economy may decrease by about 3% when using E10.

Biodiesel, renewable diesel, and other biofuels

Biofuels that have physical properties similar to and can be used for the same purposes as petroleum distillate fuels include biodiesel, renewable diesel, renewable jet/aviation fuel, and renewable heating oil. Biodiesel and renewable diesel are mostly produced for use in diesel engines, but they can also be used as heating fuels. While these fuels are made from biomass or materials derived from biomass, they differ in how they are produced and in their physical properties.

Biodiesel was one of the first biofuels to be used

Rudolf Diesel, the inventor of the diesel engine in 1897, experimented with using vegetable oil as fuel in his engines. The fuel made from vegetable oils and animal fats that we call biodiesel today is named after him because it is mostly used in diesel engines (as is petroleum diesel fuel).

Biodiesel is produced by transesterification of vegetable oils and animal fats. In this process, the feedstock chemically reacts with an alcohol (usually methanol) in the presence of a catalyst such as lye. The products are glycerin and biodiesel fuel or FAME (fatty acid methyl esters). Vegetable oils (mainly soybean oil) are the main feedstocks for U.S. biodiesel production. Other major U.S. biodiesel feedstocks include animal fats from meat processing plants and used/recycled cooking oil and yellow grease from restaurants. Rapeseed oil, sunflower oil, and palm oil are major feedstocks for biodiesel production in other countries. Algae are potential sources for biofuels. Algae contain pockets of fat that help keep them afloat, which can be collected and processed into biofuels. The feedstocks used for biodiesel production can affect the physical properties and uses of biodiesel.

  • The major sources of feedstock (raw material) for making biodiesel in the United States and their percentage shares of total biodiesel feedstocks in 2019 were:
  • soybean oil57%
  • corn oil14%
  • recycled waste oils, fats, and greases11%
  • canola oil10%
  • animal fats l8%

Rapeseed oil, sunflower oil, and palm oil are major feedstocks for biodiesel produced in other countries.

Use of biodiesel

A biodiesel fueling pump
A standard gas and biodiesel pump.

Source: Stock photography (copyrighted)

A bus powered by biodiesel made from soybean oil
A photograph of a bus powered by soybean oil biodiesel

Source: Stock photography (copyrighted)

Biodiesel is most often blended with petroleum diesel in ratios of 2% (referred to as B2), 5% (B5), or 20% (B20). Biodiesel can also be used as pure biodiesel (B100). Biodiesel fuels can be used in regular diesel engines without making any changes to the engines. Biodiesel blends are also used as heating oil.

Until 2001, only small amounts of biodiesel were consumed in the United States. Since then, biodiesel consumption has increased substantially, largely because of the availability of various government incentives and requirements to produce, sell, and use biodiesel. In 2021, biodiesel was second to fuel ethanol as the most produced and consumed biofuel in the United States, and it accounted for about 9% of total U.S. biofuels production and for 10% of total U.S. biofuels consumption.

Renewable diesel and other biofuels

Renewable diesel and other (non-fuel ethanol) biofuels can be produced from nearly any biomass feedstock, including those used for biodiesel production, through a variety of processes such as hydrotreating, gasification, pyrolysis, and other biochemical and thermochemical technologies. (Learn more about these processes.)

Renewable diesel fuel

Renewable diesel is a biomass-based diesel fuel similar to biodiesel, but with important differences. Renewable diesel is a hydrocarbon that is chemically equivalent to petroleum diesel and can be transported in petroleum pipelines and sold at retail stations with or without blending with petroleum diesel. It can be produced from cellulosic biomass materials such as crop residues, wood and sawdust, and switchgrass.

Because renewable diesel is chemically the same as petroleum diesel, it may be used in its pure form—called R100—as a drop-in biofuel, and it can be transported in petroleum pipelines and sold at retail stations with or without blending with petroleum diesel. Renewable diesel production uses a hydrogenation process rather than the esterification process used to produce biodiesel. Because renewable diesel is a drop-in fuel, it can be blended, transported, and even co-processed with petroleum diesel. Renewable diesel-petroleum diesel blends are labelled with an R followed by the percentage (by volume) of the renewable diesel content. For example, a blend of 20% renewable diesel and 80% petroleum diesel is called R20.

U.S. renewable diesel fuel production and consumption have increased substantially since 2011. Imports have also increased to make up the differnce between U.S. production and consumption.

Other biomass-based, non-ethanol biofuels

Other biomass-based, non-ethanol biofuels includes renewable jet fuel, which may be called sustainable aviation fuel (SAF), alternative jet fuel (AJF), or biojet depending on the context or fuel standard under which it can be used. Other non-fuel ethanol biofuels include renewable naphtha, renewable gasoline, renewable propane (a by-product of renewable diesel and SAF production), and other emerging biofuels. Another aviation biofuel that is being tested for use is alcohol-to-jet (ATJ) (or ethanol-to-jet [ETJ]). Although other biofuels make up a small share of total U.S. biofuels consumption, other biofuels production and consumption have increased a lot in recent years.

Biofuels and the environment

Biofuels may have fewer effects on the enviroment than fossil fuels

Production and use of biofuels is considered by the U.S. government to have fewer or lower negative effects on the environment compared to fossil-fuel derived fuels. There are also potential national economic and security benefits when biofuel use reduces the need to import petroleum fuels. Government programs that promote and/or require biofuels use, such as the U.S. Renewable Fuel Standard (RFS) and California's Low Carbon Fuel Standard (LCFS), define the types of biofuels and processes or low-carbon pathways by which biofuels can be produced in order for them to qualify for use under the programs. While biofuels have environmental benefits, their production and use do have effects on the environment.

Pure ethanol and biodiesel are nontoxic and biodegradable, and if spilled, they break down into harmless substances. However, fuel ethanol contains denaturants to make fuel ethanol undrinkable. Similar to petroleum fuels, biofuels are flammable (especially ethanol) and must be transported carefully.

When burned, pure biofuels generally produce fewer emissions of particulates, sulfur dioxide, and air toxics than their fossil-fuel derived counterparts. Biofuel-petroleum blends also generally result in lower emissions relative to fuels that do not contain biofuels. Biodiesel combustion may result in slightly higher amounts of nitrogen oxides relative to petroleum diesel.

Ethanol and ethanol-gasoline mixtures burn cleaner and have higher octane levels than gasoline that does not contain ethanol, but they also have higher evaporative emissions from fuel tanks and dispensing equipment. These evaporative emissions contribute to the formation of harmful, ground-level ozone and smog. Gasoline requires extra processing to reduce evaporative emissions before blending with ethanol.

Burning biofuels results in emissions of carbon dioxide (CO2), a greenhouse gas. However, according to international convention, CO2 emissions from biofuel combustion are excluded from national greenhouse gas emissions inventories because growing the biomass feedstocks used for biofuel production may offset the CO2 produced when biofuels are burned.

The effect that biofuel use has on net CO2 emissions depends on how the biofuels are produced and whether or not emissions associated with cropland cultivation are included in the calculations. Growing plants for fuel is a controversial topic because some people believe the land, fertilizers, and energy used to grow biofuel crops should be used to grow food crops instead. In some parts of the world, large areas of natural vegetation and forests have been cleared or burned to grow soybeans and palm oil trees to make biodiesel. The processes for producing ethanol, renewable diesel, renewable heating oil, and renewable aviation fuel require a heat source, and most producers of these biofuels currently use fossil fuels. Some U.S. ethanol producers burn corn stalks for heat and ethanol producers in Brazil use sugar cane stalks (called bagasse) to produce heat and electricity.

The U.S. government is supporting efforts to produce biofuels with methods that use less energy than conventional fermentation and that use cellulosic biomass, which requires less cultivation, fertilizer, and pesticides than growing corn or sugar cane. Cellulosic ethanol feedstock includes native prairie grasses, fast-growing trees, sawdust, and even waste paper. However, there is currently no commercial cellulosic ethanol production in the United States because of technical and economic challenges.