There has been growing interest in recent years in the production of liquid fuels from grain and dedicated energy crops (often sugar crops). Biofuels are the only renewable source of liquid transportation fuels. The fuels can be in the form of ethanol or biodiesel. Ethanol is the more common application and has been used extensively in the United States and Brazil. Biodiesel is produced in large quantities in Europe, mainly Germany.

Biodiesel

Biodiesel is extracted from seed crops such as rape, soy, palm, coconut and jatropha. It can also be produced from waste vegetable oils. Market penetration is relatively small but interest is great. The technology is commercially available, and at current high oil prices biodiesel can be competitively produced in many countries. Biodiesel is most often used in 5% to 20% blends (B5 and B20) with conventional diesel but use in its pure form (B100) is growing.

Focus on Jatropha: A new use for the plant Jatropha curcas, also called physic nut, is the production of non-edible Jatropha oil, for making biodiesel. Jatropha trees are very hardy in semi-arid regions, and can thriove with only small amounts of water on marginal lands not suitable for food cultivation. The cakes remaining after the oil is pressed out can be used for cooking, for fertilizing, and sometimes even as animal feed, while the seed husks can be used to as a solid fuel for boilers. Large plantings and nurseries of this tree have been undertaken in a wide range of countries from India to South Africa and the Caribbean basin (which is where the plant originated).

Ethanol

Ethanol producers use specific types of enzymes to convert starch crops such as corn, wheat, barley and cassava to fermentable sugars. Some crops, such as sugar-cane and sugar beets, naturally contain fermentable sugars.

Ethanol has a higher octane than gasoline, but its energy content is only about two-thirds the energy content of gasoline. Most new cars are designed to run on a blend of gasoline and ethanol. "Gasohol" is a mixture of 90-percent unleaded gasoline and 10-percent denatured ethanol. Ethanol is generally blended with gasoline at concentrations of 5-10 per cent. The addition of oxygenates, such as ethanol, to gasoline can reduce the emission of unburned hydrocarbons.With modification, spark ignition engines can run on 100-percent ethanol. The major automobile manufacturers in the United States now produce flexible fuel vehicles that can use either E-85 fuel (85-percent ethanol and 15-percent gasoline) or gasoline. Some three-quarters of new cars sold in Brazil are flex-fuel vehicles.