Biofuel Energy: Types, How It Works, Pros and Cons

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Biofuel energy is energy from liquid or gas fuels made from plants, animal fats and organic waste instead of crude oil. The main biofuels are ethanol, made mostly from corn and blended into gasoline, and biodiesel and renewable diesel, made from vegetable oils, animal fats and used cooking oil. They power cars, trucks, planes and some home furnaces.

If you have filled up a gas tank in the U.S., you have almost certainly used biofuel: nearly every gallon of gasoline sold here is about 10% ethanol. That matters for your car, your lawn mower, your generator, and even your heating bill if you heat with oil in the Northeast. This guide explains what biofuels are, how they are made, how much the U.S. uses, what they cost, and the honest debate about how green they really are.

Biofuel energy at a glance

• What it is: fuels made from biomass, mainly ethanol, biodiesel, renewable diesel, sustainable aviation fuel and biogas.
• Where it comes from: in the U.S., mostly corn (ethanol) and soybean oil, animal fats and used cooking oil (diesel substitutes).
• Renewable? Yes, the crops and wastes are replenished, but growing and processing them uses energy, land and fertilizer.
• U.S. scale: biofuels were about 53% of all U.S. biomass energy in 2025, and biomass was about 5% of total U.S. energy use (U.S. EIA).
• Main upside: works in today’s engines and fuel stations, with lower tailpipe pollution and a homegrown supply.
• Main downside: needs a lot of farmland, and the real climate benefit of crop-based fuels is disputed.

How biofuels work

Plants capture sunlight and carbon dioxide and store the energy in sugars, starches and oils. Biofuel makers turn that stored chemical energy into a liquid that an engine can burn. When you burn it, the energy is released and the carbon goes back into the air, where the next crop can take it up again. That cycle is the core of the case for biofuels.

Ethanol, step by step

1. Corn kernels are ground, and enzymes turn the starch into sugar. (Brazil uses sugar cane, which skips this step.)
2. Yeast ferments the sugar into alcohol, the same basic process as brewing.
3. The alcohol is distilled and dried into fuel ethanol, then denatured so no one drinks it.
4. The ethanol is blended with gasoline, usually at 10% (E10).

According to the Alternative Fuels Data Center (AFDC) of the U.S. Department of Energy, about 94% of U.S. ethanol is made from corn starch. Ethanol has a higher octane rating than gasoline, so refiners blend it with lower-octane gasoline to make regular 87 octane. But it holds about 30% less energy per gallon than gasoline, which is why fuel economy drops a little with E10 and noticeably with E85.

Biodiesel and renewable diesel

Both start with fats and oils, mainly soybean oil, animal fats from meat processing and recycled cooking oil. They are made in different ways:

• Biodiesel is made by a chemical reaction called transesterification. It meets its own fuel standard (ASTM D6751) and is usually blended with petroleum diesel, most often up to B20 (20% biodiesel). It is a good solvent, which can degrade rubber in older fuel lines, and it can thicken in cold weather.
• Renewable diesel is made with hydrogen at high temperature (hydrotreating), the way refineries process crude oil. The result is chemically the same as petroleum diesel and meets the regular diesel standard (ASTM D975), so it can be used pure (R100) as a “drop-in” fuel and shipped through existing pipelines.

The same plants can also make sustainable aviation fuel (SAF), renewable jet fuel that is blended with conventional jet fuel. And biogas from landfills, manure and sewage can be cleaned into renewable natural gas, covered on our biomass energy page.

A short history of biofuels

• 1897: Rudolf Diesel invented his engine and experimented with vegetable oil as a fuel. Biodiesel is named after him.
• 1908: Henry Ford’s Model T was designed to run on a mixture of gasoline and alcohol.
• 1919–1933: Prohibition banned ethanol production, including for fuel, and cheap gasoline took over.
• 1970s: oil embargoes and price spikes revived interest in ethanol.
• 1990: Clean Air Act amendments required cleaner, oxygenated gasoline, which spurred E10 blending.
• 2005 and 2007: the Energy Policy Act created the Renewable Fuel Standard (RFS), and the Energy Independence and Security Act expanded it. It requires fuel refiners and importers to blend rising volumes of biofuel.

Types of biofuels and blends

Fuel	What it is	Who can use it
E10	10% ethanol, 90% gasoline; in over 98% of U.S. gasoline (AFDC)	Any gasoline vehicle
E15	10.5% to 15% ethanol	Cars and light trucks from model year 2001 and newer
E85 (flex fuel)	51% to 83% ethanol, depending on season and region	Flexible fuel vehicles (FFVs) only
B5 / B20	Up to 5% / 6% to 20% biodiesel in diesel	B5 in any diesel engine; B20 in most, check your warranty
R100	Pure renewable diesel	Diesel engines, as a drop-in fuel
SAF	Renewable jet fuel, blended with conventional jet fuel	Aircraft
Bioheat	Heating oil blended with biodiesel	Oil-fired home furnaces and boilers

The Renewable Fuel Standard sorts fuels by how much they cut life-cycle greenhouse gas emissions compared with the petroleum fuel they replace: at least 20% for conventional biofuel (mostly corn ethanol), 50% for biomass-based diesel and other advanced biofuels, and 60% for cellulosic biofuel made from grasses, wood and crop residues.

Where biofuels are used today

In the United States, EIA’s most recent full breakdown shows about 18.7 billion gallons of biofuels produced and 17.6 billion gallons consumed in 2022. Ethanol made up most of it, about 14 billion gallons consumed, followed by renewable diesel (about 1.7 billion gallons) and biodiesel (about 1.7 billion gallons). The U.S. exports ethanol too, about 1.3 billion gallons in 2022. Production capacity keeps changing: EIA reported that at the start of 2025, fuel ethanol plants accounted for about 73% of U.S. biofuel capacity, and that total capacity grew only about 3% during 2024. Several refineries have been converted to renewable diesel, and some can now switch part of their output to sustainable aviation fuel.

Measured as energy, EIA says biofuels supplied about 2,569 trillion Btu in 2025, more than half of all U.S. biomass energy, most of it in transportation.

Around the world, the International Energy Agency (IEA) estimates biofuels were about 5.6% of liquid transport fuel demand (by volume) in 2023 and expects that to reach 6.4% by 2030. Brazil is the world’s second-largest ethanol producer after the U.S., making most of its ethanol from sugar cane. The IEA says the U.S., Europe, Brazil, Indonesia and India account for 85% of expected biofuel growth, and that aviation and shipping will make up more than 75% of new biofuel demand by 2030, because those are the hardest parts of transport to electrify.

Biofuels at home: what they mean for you

Making your own fuel isn’t a realistic home project, but biofuels touch your household in four practical ways.

1. Your car

Any gasoline car can use E10. E15 is approved for model year 2001 and newer cars and light trucks. Only flexible fuel vehicles should use E85; check your owner’s manual if you’re not sure. Because ethanol carries less energy, you will usually go fewer miles per gallon on higher blends, so compare the price per mile, not just per gallon. In the AFDC’s April 2026 price survey, the national average was about $3.31 a gallon for E85 and $3.62 for E15, versus $4.09 for regular gasoline. Diesel drivers can typically use B20 without changes, but check your warranty first.

2. Small engines and your backup generator

Lawn mowers, chainsaws, boats and portable generators often sit for months. E15 is approved only for 2001-and-newer cars and light trucks, not for small engines, so check your manual for the highest ethanol blend it allows and what it says about storing fuel, such as using a fuel stabilizer or ethanol-free fuel. And because a generator burns gasoline, run it only outdoors, at least 20 feet from the house with the exhaust pointed away, as the Consumer Product Safety Commission advises; CPSC says portable generators cause more than half of the 200-plus U.S. deaths a year from accidental, non-fire carbon monoxide poisoning linked to consumer products. For quieter backup power, see our energy storage guides.

3. Heating oil becomes “Bioheat”

If you heat with oil, you may already be burning biodiesel. New York State law requires all heating oil sold for buildings to contain at least 10% biodiesel from July 1, 2025, rising to 20% from July 1, 2030. Ask your fuel dealer what blend they deliver and whether your burner’s maker approves it; a licensed heating technician can check older equipment.

4. Driving on less fuel altogether

The cleanest gallon is the one you don’t burn. An electric vehicle charged at home skips liquid fuel entirely; see our electric vehicles section. Note that the federal EV purchase credit ended on September 30, 2025, and the federal credit for home EV chargers ends for chargers placed in service after June 30, 2026, so check state and utility rebates on DSIRE (dsireusa.org) instead.

Products for using today’s fuels at home

Ethanol-blended gasoline is what most of us put in mowers and generators. This real product, sold on Amazon, is one way to keep ethanol out of small engines that sit unused. Prices are what we saw in October 2026 and change often; always follow your engine maker’s fuel instructions.

If your mower, trimmer or other 4-cycle tool sits for long stretches, or its manual warns against ethanol blends, canned ethanol-free fuel is a simple option. TruFuel 4-Cycle (about $21 for two 32 oz cans, seen October 2026) is made for 4-cycle outdoor power equipment. It costs far more per gallon than pump gas, so most people keep it for small tools and seasonal storage, not for a large generator.

Check the TruFuel 4-Cycle price on Amazon

Biofuel pros and cons

Pros	Cons
Works in today’s engines and fuel stations (E10, B20, renewable diesel)	Ethanol has about 30% less energy per gallon than gasoline, so mileage drops on high blends
Renewable, homegrown supply that reduces oil imports	Corn and soy fuels use large areas of farmland, fertilizer and water
Fewer particulates, sulfur dioxide and air toxics than petroleum fuels (EIA)	Biodiesel may raise nitrogen oxide emissions; ethanol blends raise evaporative emissions
Waste-based fuels (used cooking oil, animal fats) have lower life-cycle emissions	The climate benefit of corn ethanol is disputed once land-use change is counted
Can cut emissions in hard-to-electrify planes, ships and trucks	Depends on government mandates and credits; cellulosic fuels are still not commercial at scale

Environmental impact: how green are biofuels?

Air pollution. EIA says pure biofuels generally produce fewer particulates, sulfur dioxide and air toxics than their petroleum counterparts. There are trade-offs: burning biodiesel may produce more nitrogen oxides than petroleum diesel, and ethanol-gasoline blends increase evaporative emissions from fuel tanks and equipment, which add to ground-level ozone (smog).

Climate. This is where scientists disagree. Argonne National Laboratory, using its GREET life-cycle model, found that the carbon intensity of U.S. corn ethanol fell 23% from 2005 to 2019 as farms and plants became more efficient, to about 45 grams of CO₂-equivalent per megajoule (plus 7.4 for land-use change), compared with about 93 for average gasoline. That is a cut of more than 40%. A 2022 study in the Proceedings of the National Academy of Sciences (Lark and colleagues) reached a very different answer: counting the grassland and other land plowed up for corn under the RFS, it estimated corn ethanol’s carbon intensity was likely at least 24% higher than gasoline’s. Other researchers have challenged that study’s methods. The honest summary: the benefit depends heavily on how much new land is cleared, and fuels made from true wastes have the clearest advantage.

Land and water. The same PNAS study estimated that the RFS expanded U.S. corn planting by 8.7% and raised national fertilizer use by 3% to 8%, with more runoff into rivers. EIA notes that the federal government supports fuels made from cellulosic biomass, which need less fertilizer and pesticide, and from used cooking oil and animal fats, which have lower life-cycle emissions because they are already by-products.

Safety. Biofuels are flammable like the fuels they replace. Store gasoline blends only in approved containers, away from living spaces and ignition sources.

How much do biofuels cost?

At the pump, the AFDC’s Clean Cities price report for April 1–15, 2026 found these national averages:

Fuel	Average retail price, April 2026 (AFDC)
Regular gasoline	$4.09 per gallon
E15	$3.62 per gallon
E85	$3.31 per gallon
Diesel	$5.55 per gallon
B20	$5.30 per gallon
B99–B100	$5.28 per gallon

These are snapshots, and prices vary a lot by region and week. Remember the energy difference: E85 holds much less energy per gallon than gasoline, so a lower sticker price doesn’t always mean a cheaper trip. B20, by contrast, contains only about 1% to 2% less energy than diesel, according to the AFDC, so its price per mile is close to its price per gallon.

Behind the pump, biofuel economics are tied to government programs. Under the RFS, refiners and importers of gasoline and diesel must each year retire tradable credits called Renewable Identification Numbers (RINs); one RIN stands for one ethanol-equivalent gallon of renewable fuel. That system is what pushes biofuels into the fuel supply, so changes in RFS volumes matter for the industry.

The future of biofuels

As more cars go electric, the growth in biofuels is shifting to places batteries struggle: long-haul trucks, ships and planes. The IEA expects aviation and shipping to drive most new biofuel demand through 2030. In the U.S., EIA reports that some converted refineries can already shift part of their renewable diesel output to sustainable aviation fuel; Phillips 66’s Rodeo plant in California, for example, can shift about 150 million gallons a year.

The long-promised next step, cellulosic ethanol from grasses, wood chips and crop residues, still hasn’t scaled. EIA notes that as of the end of 2022, the U.S. had no commercial cellulosic ethanol production because of technical and economic hurdles. Expect steady, policy-driven growth in renewable diesel and SAF rather than a sudden switch.

How biofuels compare with other options

Option	Renewable?	Works in today’s cars?	Main use
Biofuels (ethanol, biodiesel)	Yes	Yes, in blends	Cars, trucks, planes, heating oil
Petroleum (gasoline, diesel)	No	Yes	Most transportation
Hydrogen	Depends on how it is made	Only in fuel-cell vehicles	Industry, some trucks and buses
Electricity (EVs)	Depends on the grid; can be solar at home	Only in EVs and plug-in hybrids	Cars, increasingly trucks and buses

Biofuel energy FAQs

What are the main types of biofuels?

Ethanol, biodiesel and renewable diesel are the big three in the U.S., with ethanol by far the largest. Others include sustainable aviation fuel, renewable heating oil and biogas (renewable natural gas). In 2022, ethanol was about three-quarters of U.S. biofuel consumption, according to EIA.

Can I put E15 or E85 in my car?

E15 is approved for cars and light trucks from model year 2001 and newer. E85 is only for flexible fuel vehicles, which your owner’s manual will identify. Because E15’s approval covers only 2001-and-newer cars and light trucks, don’t use it in motorcycles, boats or small engines unless the maker approves it.

Are biofuels better for the environment than gasoline?

For local air pollution, generally yes: fewer particulates, sulfur dioxide and air toxics. For climate, it depends. Argonne’s model finds corn ethanol cuts life-cycle emissions by more than 40% versus gasoline, while a 2022 PNAS study found it may be worse once land clearing is counted. Waste-based fuels like used cooking oil have the clearest benefit.

What is the difference between biodiesel and renewable diesel?

Both come from fats and oils, but biodiesel is made by transesterification and is chemically different from petroleum diesel, so it is usually blended up to 20%. Renewable diesel is hydrotreated into the same molecules as petroleum diesel, so it can be used pure and shipped in existing pipelines.

Does ethanol lower gas mileage?

Yes, a little. Ethanol holds about 30% less energy per gallon than gasoline, according to the Department of Energy’s Alternative Fuels Data Center. With E10 the drop is small; with E85 in a flex fuel vehicle it is much larger, so compare cost per mile, not just the price per gallon.

Can I use biofuel to heat my home?

Yes, if you heat with oil. Bioheat is heating oil blended with biodiesel, and New York now requires at least 10% biodiesel in heating oil, rising to 20% in 2030. Ask your dealer about blend levels and have a licensed technician confirm your burner is approved for them.

Keep exploring

Biofuels are one branch of biomass energy, which is one of many renewable energy sources. See how they all fit together in our guide to the types of energy, or learn the fundamentals in Energy 101.