Biofuels: Ethanol, Biodiesel and Renewable Diesel Explained

If you have filled up a car in the United States, you have almost certainly used a biofuel. Nearly all US gasoline is about 10% ethanol, according to the EIA. Trucks, buses and farm equipment are also running more and more on biodiesel and renewable diesel made from soybean oil, animal fat and used cooking oil.

This guide covers liquid biofuels: what they are, how each one is made, how much energy a gallon holds, what E10, E15 and E85 mean at the pump, and what the research says about their climate impact. For wood, pellets, biogas and other solid and gaseous forms of biomass, see our biomass energy guide.

What are biofuels?

Biofuels are liquid fuels and blending components made from biomass, meaning plant and animal material. The EIA’s definition says the term “usually applies to liquid fuels and blending components produced from biomass materials.” It can also cover methane from landfill gas and renewably produced hydrogen.

Biofuels are mostly used in transportation, as a partial or full replacement for gasoline, diesel and jet fuel. They matter because vehicles already designed for petroleum can burn them, often without any changes. Ethanol is blended into gasoline, while biodiesel and renewable diesel are blended into or replace diesel.

A plant stores solar energy as sugars, starches and oils when it grows. Fermenting the sugar gives ethanol, and chemically processing the oil gives diesel-type fuels. In both cases, the energy in the tank started as sunlight a season or two earlier, not millions of years ago as with crude oil.

Examples of biofuels: the US mix

The main examples of biofuels are ethanol, biodiesel and renewable diesel, followed by a small group of “other biofuels” that includes sustainable aviation fuel. The US produced about 18.7 billion gallons of biofuels in 2022 and consumed about 17.6 billion gallons, making it a net exporter of about 1 billion gallons (EIA).

Biofuel	Production 2022 (billion gal)	Consumption 2022 (billion gal)	Share of US consumption	Typical feedstocks
Ethanol	15.36	14.02	75%	Corn starch, sugarcane, sugar beets
Biodiesel	1.62	1.66	9%	Soybean oil, animal fats, used cooking oil
Renewable diesel	1.50	1.72	About 9%	Fats, oils and greases
Other biofuels (incl. SAF)	0.20	0.20	About 1%	Fats, oils, other

Sources: EIA, Biofuels explained (data from the February 2024 Monthly Energy Review); feedstocks from EIA and AFDC. The “other” share is calculated from the EIA volumes.

“Other biofuels” covers renewable heating oil, renewable naphtha, renewable gasoline and renewable jet fuel. The EIA notes that renewable jet fuel is also called sustainable aviation fuel (SAF), alternative jet fuel or biojet, and that definitions vary by program.

Types of biofuels: first, second and third generation

Biofuels are often grouped into “generations” by their feedstock rather than by the fuel itself. The terms are informal rather than official categories. Agencies such as the IEA tend to say “conventional” and “advanced” biofuels instead, so treat the table below as a rough guide.

Generation	Feedstock	Examples	Main issue
First	Food crops: corn, sugarcane, soybean and rapeseed oil	Corn ethanol, soy biodiesel	Competes with food for cropland
Second	Non-food biomass: crop residues, grasses, wood, waste oils	Cellulosic ethanol, waste-oil renewable diesel	Harder and costlier to process
Third	Algae	Algal oil fuels	Still mainly at the research and development stage (US DOE)

Cellulosic ethanol, made from the woody parts of plants, has been promised for decades. The EIA reports that by the end of 2022 the US had no commercial cellulosic ethanol production (EIA). Waste fats and used cooking oil have been more successful, because hydrotreating them into renewable diesel is now a proven commercial process.

The US Renewable Fuel Standard uses its own legal categories (conventional renewable fuel, advanced biofuel, biomass-based diesel and cellulosic biofuel), each with a minimum lifecycle greenhouse gas reduction (EPA).

History of biofuels

Biofuels are older than the oil industry’s dominance. In the 1850s, ethanol was a major US lighting fuel. A liquor tax imposed during the Civil War made it uncompetitive, and production only recovered after that tax was repealed in 1906 (EIA).

Rudolf Diesel, who invented the diesel engine in 1897, experimented with vegetable oil as a fuel (EIA). In 1908 Henry Ford designed the Model T to run on a gasoline-alcohol mixture, but Prohibition banned ethanol from 1919 until 1933, and cheap gasoline won the market (EIA).

The oil shocks of the 1970s brought biofuels back. Brazil launched its National Alcohol Program (Proálcool) in 1975 to replace gasoline with sugarcane ethanol (Rogers, 2022). In the US, the Energy Policy Act of 2005 created the Renewable Fuel Standard, and the Energy Independence and Security Act of 2007 expanded it (EPA). A federal ethanol blenders’ tax credit between 2005 and 2011 also drove large increases in ethanol use (EIA).

The most recent shift has been from biodiesel to renewable diesel. In January 2023, US production capacity for renewable diesel and other biofuels reached 3 billion gallons a year and overtook biodiesel capacity for the first time (EIA).

Year	Milestone	Source
1850s	Ethanol is a major US lighting fuel	EIA
1897	Rudolf Diesel invents the diesel engine and later tests vegetable oil fuel	EIA
1906	Repeal of the Civil War-era liquor tax revives ethanol	EIA
1908	Ford’s Model T is designed to run on a gasoline-alcohol mix	EIA
1919–1933	Prohibition bans ethanol	EIA
1975	Brazil launches Proálcool	Rogers, 2022
2005	Energy Policy Act creates the Renewable Fuel Standard	EPA
2007	Energy Independence and Security Act expands the RFS	EPA
2008	Land-use “carbon debt” studies published in Science	doi:10.1126/science.1152747
January 2023	US renewable diesel capacity overtakes biodiesel capacity	EIA

How is ethanol made?

Ethanol is made by fermentation: yeast converts sugar into alcohol. In the United States, nearly all fuel ethanol comes from the starch in corn kernels (EIA). Brazil uses sugarcane.

A typical corn ethanol process works like this:

1. Grinding. Corn kernels are milled into a meal.
2. Starch to sugar. Water and enzymes break the starch down into simple sugars.
3. Fermentation. Yeast eats the sugars and produces ethanol and carbon dioxide.
4. Distillation. The ethanol is separated from the water and solids and dried to near-pure fuel alcohol.
5. Denaturing. A small amount of a denaturant is added so the fuel cannot be drunk (EIA).

Sugarcane is fermented directly, because its sugar does not need to be broken down from starch first.

How is biodiesel made?

Biodiesel is made by transesterification, a reaction between vegetable oils or animal fats and an alcohol (EIA). Chemically, biodiesel is a mono-alkyl ester (AFDC).

Soybean oil is the main US feedstock, followed by animal fats from meat processing and used cooking oil and yellow grease (EIA). Pure biodiesel is called B100. It meets its own specification, ASTM D6751, and is usually blended with petroleum diesel; the number after the “B” is the biodiesel percentage, so B20 is 20% biodiesel. Biodiesel’s physical properties are similar to those of petroleum diesel (AFDC).

What is renewable diesel?

Renewable diesel is a fuel made from fats and oils, such as soybean or canola oil, that is processed to be chemically the same as petroleum diesel (AFDC). Commercial plants make it by hydrotreating: reacting the oil with hydrogen at high temperature and pressure over a catalyst.

Because renewable diesel meets ASTM D975, the same specification as petroleum diesel, it can be used in existing diesel engines, pipelines and pumps without blending limits. The EIA calls it a “drop-in” fuel. Fats, oils and greases are the most common feedstocks.

Biodiesel vs renewable diesel

	Biodiesel	Renewable diesel
Chemistry	Fatty-acid (mono-alkyl) ester	Hydrocarbon, same as petroleum diesel
Process	Transesterification	Hydrotreating
Specification	ASTM D6751	ASTM D975
Use	Blended (B5, B20 and others)	Drop-in, can be used at 100%
Energy content (Btu/gal)	119,550 (B100)	123,710 (RD100)
US consumption 2022	1.66 billion gal	1.72 billion gal

Sources: AFDC, Renewable diesel; AFDC, Fuel properties; EIA.

How much energy is in a gallon of biofuel?

A gallon of ethanol holds about two-thirds of the energy of a gallon of gasoline, while biodiesel and renewable diesel come much closer to petroleum diesel. The table uses lower heating values from the US Department of Energy’s Alternative Fuels Data Center. We converted Btu to kWh at 3,412 Btu per kWh, the same factor used in our BTU to kWh converter.

Fuel	Energy (Btu/gal)	Energy (kWh/gal)	Gasoline gallon equivalents per gallon
Gasoline / E10	112,114–116,090	32.9–34.0	1.00
Ethanol (E100)	76,330	22.4	0.67
Biodiesel (B100)	119,550	35.0	1.05
Biodiesel blend (B20)	126,700	37.1	1.11
Renewable diesel (RD100)	123,710	36.3	1.08
Petroleum diesel (low sulfur)	128,488	37.7	1.12

The kWh column makes a useful comparison with electric cars. A gallon of gasoline holds roughly 33 to 34 kWh of chemical energy, but a combustion engine turns only part of it into motion. If you want to compare fuel costs with charging, our EV charging cost calculator and the guide to the cost to charge an electric car cover the electric side.

E10, E15 and E85: what the pump labels mean

Ethanol reaches drivers as a blend. The number after the “E” is the maximum ethanol percentage (AFDC).

Blend	Ethanol content	Which vehicles can use it
E10	Up to 10%	Any conventional gasoline vehicle; sold in every state
E15	10.5% to 15%	Model year 2001 and newer light-duty vehicles
E85 (flex fuel)	51% to 83%, depending on location and season	Flexible fuel vehicles only

Lower energy per gallon is why drivers notice fewer miles per gallon on E85. On E10 the difference is small, because only a tenth of the fuel is ethanol.

Are biofuels renewable?

Yes. Biofuels are renewable because their feedstocks, such as corn, soybeans, animal fats and used cooking oil, are produced again every year. Petroleum formed over millions of years and is not replaced on any human timescale. The broader comparison is in our guide to renewable vs nonrenewable energy.

“Renewable” describes the source, not the emissions. Growing, fertilizing, harvesting and processing crops all use energy, and the EIA notes that ethanol and renewable diesel plants still use some fossil-fuel heat (EIA). Whether a biofuel is good for the climate is a separate question.

Are biofuels carbon neutral? What the research says

Biofuels are not automatically carbon neutral. Under international convention, the CO2 from burning biofuels is not counted in national greenhouse gas totals, because the next crop can absorb it again. The EIA notes that the real net effect depends on how the fuel is produced and whether emissions from cultivating cropland are counted (EIA).

Peer-reviewed estimates for US corn ethanol show how much that accounting choice matters:

• Net energy. Hill et al. (2006) found that corn ethanol yields 25% more energy than is used to make it, while soybean biodiesel yields 93% more. They also found that biodiesel cuts greenhouse gases more than ethanol does (PNAS).
• Improving efficiency. An Argonne National Laboratory study (Lee et al., 2021) estimated that corn ethanol’s carbon intensity fell from 58 to 45 gCO2e per megajoule between 2005 and 2019, a 23% reduction driven by higher corn yields, less fertilizer per bushel and more efficient plants (Argonne; doi:10.1002/bbb.2225).
• Land conversion. Lark et al. (2022) estimated that the Renewable Fuel Standard expanded corn cropland. Once the resulting soil-carbon losses are counted, they found corn ethanol’s carbon intensity is likely at least 24% higher than gasoline’s (PNAS). The USDA and ethanol industry groups have disputed the land-use method.
• Carbon debt. Fargione et al. (2008) calculated that converting rainforest, peatland, savanna or grassland to grow biofuel crops creates a “biofuel carbon debt” of 17 to 420 times the fuel’s annual greenhouse gas savings (Science). Searchinger et al. (2008) found that counting indirect land-use change nearly doubled corn ethanol’s emissions over 30 years compared with gasoline (Science).

The studies agree on one thing: the feedstock decides the result. Fuels made from wastes and residues, such as used cooking oil, tallow and crop residues, avoid most of the land problem. Fuels from food crops grown on newly cleared land carry the most risk. For air quality, pure biofuels generally produce fewer particulates, sulfur dioxide and air toxics than petroleum fuels. Biodiesel may slightly raise nitrogen oxides, and ethanol blends have higher evaporative emissions that contribute to smog (EIA).

Advantages and disadvantages of biofuels

Pros	Cons
Work in existing engines and fuel infrastructure (E10, B20, renewable diesel as a drop-in)	Ethanol has about a third less energy per gallon than gasoline (AFDC)
Renewable feedstocks, grown or collected every year	Crop-based fuels compete with food for cropland
Fewer particulate, SO2 and air toxic emissions when burned (EIA)	Land conversion can cancel the climate benefit (Fargione; Lark)
Can use wastes such as used cooking oil and animal fats	Ethanol blends raise evaporative emissions; biodiesel may raise NOx (EIA)
Reduce oil imports; US is a net biofuel exporter (EIA)	Advanced cellulosic fuels have not reached commercial scale (EIA)
Renewable jet fuel can be blended up to 50-50 with petroleum jet fuel (EIA)	Growth has relied on mandates and tax credits (EIA)

Biofuels vs electric vehicles

Biofuels and electric vehicles are both ways to cut oil use in transport, but they suit different jobs. Biofuels need no new vehicles: E10 already goes into nearly every gasoline car, and renewable diesel can fill a truck fleet overnight. Electric cars need new vehicles and charging, but can run on electricity from clean energy sources such as wind and solar.

For aviation, sustainable aviation fuel is the biofuel route: ASTM D7566 allows up to a 50-50 blend of biomass-derived components with petroleum jet fuel (EIA). The renewable energy sources guide shows how biofuels fit with the other renewables.

Scientific references

1. Hill, J., Nelson, E., Tilman, D., Polasky, S., & Tiffany, D. (2006). “Environmental, economic, and energetic costs and benefits of biodiesel and ethanol biofuels.” Proceedings of the National Academy of Sciences, 103(30), 11206–11210. doi:10.1073/pnas.0604600103
2. Fargione, J., Hill, J., Tilman, D., Polasky, S., & Hawthorne, P. (2008). “Land Clearing and the Biofuel Carbon Debt.” Science, 319(5867), 1235–1238. doi:10.1126/science.1152747
3. Searchinger, T., Heimlich, R., Houghton, R. A., Dong, F., et al. (2008). “Use of U.S. Croplands for Biofuels Increases Greenhouse Gases Through Emissions from Land-Use Change.” Science, 319(5867), 1238–1240. doi:10.1126/science.1151861
4. Lee, U., Kwon, H., Wu, M., & Wang, M. (2021). “Retrospective analysis of the U.S. corn ethanol industry for 2005–2019: implications for greenhouse gas emission reductions.” Biofuels, Bioproducts and Biorefining, 15(5), 1318–1331. doi:10.1002/bbb.2225
5. Lark, T. J., Hendricks, N. P., Smith, A., Pates, N., Spawn-Lee, S. A., Bougie, M., et al. (2022). “Environmental outcomes of the US Renewable Fuel Standard.” Proceedings of the National Academy of Sciences, 119(9), e2101084119. doi:10.1073/pnas.2101084119

Bottom line

Biofuels are renewable liquid fuels made from crops, fats and wastes. In the US they mean mostly corn ethanol in gasoline, plus fast-growing volumes of biodiesel and renewable diesel. Together they reached about 17.6 billion gallons of consumption in 2022 (EIA). They work in today’s engines, but ethanol carries less energy per gallon, and the climate benefit ranges from strong for waste-based fuels to doubtful for crops grown on newly converted land.

For other forms of plant-based energy, see biomass energy. For the whole renewable picture, start at our renewable energy homepage.