The term biofuel is referred to as liquid or gaseous fuels that are produced from biomass. Biofuel is generally considered as offering many priorities, including sustainability, reduction of greenhouse gas emissions, regional development, social structure, agriculture and security of supply. A variety of biofuel can be produced from biomass resources including liquid fuels, such as ethanol, methanol, biodiesel, Fischer-Tropsuch diesel; and gaseous fuel, such as hydrogen and methane. Liquid biofuel is primarily used to fuel vehicles, fuel engine or fuel cell for electric generation. It can also be used for lighting and cooking proposes by using lamps and cooking stoves. There are several reasons for biofuel to be considered as relevant technologies by both developing and developed country. They include energy security region, environmental concern, foreign exchange saving, and socioeconomic issues related to the rural sector. Advantages of biofuel are the followings: a) biofuel is easily available from common biomass sources (b) biofuel has considerable environmental friendliness potential (c) there are many benefits to the environment, economy and consumers in using biofuel, and (d) they are biodegradable and contribute to sustainability.

Biofuel can be produced in two ways. First, by growing high in sugar or starch rich crops and ferment it to produce ethanol. Second, by growing plants such as oil palm, soybean, algae, or Jatropha those containing high amounts of vegetable oil and converting it to biodiesel. The major sources of bio-diesel and bio-ethanol are given in the chart below: