The world is on the verge of unprecedented growth in the production and use of biofuels. Although biofuels supply only 2% of the world’s energy needs, rising oil prices, national security concerns, global climate concerns, the desire to increase farm incomes, and a host of new and improved technologies are propelling many governments to enact powerful incentives for the production and use of alternative sources of energy. This, in turn, is sparking a large new wave of interest and investment in biofuels.

The two most common biofuels are ethanol, currently produced from sugar or starch crops, and biodiesel, produced from vegetable oils or animal fats. Between 2000 and 2005, world production of ethanol more than doubled while production of biodiesel increased almost three-fold.

While Europe remains the largest consumer and producer of biodiesel, there was also explosive growth in the U.S., where production of biodiesel increased from 25 million gallons in 2004 to 250 million gallons in 2006, and where the number of commercial biodiesel plants increased from 22 in 2004 to 76 by mid-2007.

Biodiesel is a clean burning, non-toxic and biodegradable renewable fuel that is an alternative to petroleum diesel (see earlier discussion). Although primarily used as a land transportation fuel, biodiesel can also be used as heating oil and in a variety of other applications, including marine transportation, electrical generation, and farming equipment and mining operations. 

Within the biodiesel category, Jatropha has emerged in the last three years as the top choice for conversion to biodiesel. This plant can grow on marginal land and harsh climatic conditions and does not compete with sustenance crops for land. Jatropha also enjoys significantly higher yields than first-generation biofuel crops.