Biofuels are fuels derived from biomass - recently living organisms or their metabolic by-products. Agricultural products specifically grown for use as biofuels include corn, sunflower and soybeans, primarily in the United States, as well as flaxseed and rapeseed, primarily in Europe.

In the developing world, the physic nut (jatropha curcas) and the Indian beech (pongamia pinnata) are favoured for their drought resistance and ability to grow in marginal soils, thereby reducing demand for arable soils and water required for food production.

Biofuels are used as a direct replacement for energy and industrial fuels such as HFO, or can be easily processed into biodiesel, an alternative to petroleum-based diesel fuel.
 
 
Biodiesel is a renewable fuel that can replace petrodiesel in current engine specifications without alteration and can be transported and sold using existing infrastructure. Biodiesel is non-flammable, and in contrast to petroleum diesel it is non-explosive, with a flash point of 150°C for biodiesel as compared to 64°C for petrodiesel. Unlike petrodiesel, it is biodegradable and non-toxic, and releases far less toxic and other emissions when burned as a fuel.

Chemically, it is a fuel comprised of a mix of mono-alkyl esters of long chain fatty acids. A lipid transesterification production process is used to convert the base vegetable oil to the desired esters and remove free fatty acids (de-gumming). The most common form uses methanol as an additive to produce methyl esters, though ethanol can be used to produce an ethyl ester biodiesel. A by-product of the transesterification process is the production of glycerol, which is traditionally used in the cosmetics and food industry.

After processing, unlike straight vegetable oil, biodiesel has very similar combustion properties to petroleum diesel, and can replace it in most current uses. However, it is most often used as an additive to petroleum diesel, improving the otherwise low lubricity of pure ultra low sulphur petrodiesel fuel.