Biofuel is defined by Wikipedia

Biofuel is defined as solid, liquid or gas fuel derived from recently dead biological material and is distinguished from fossil fuels, which are derived from long dead biological material. Theoretically, biofuels can be produced from any (biological) carbon source; although, the most common sources are photosynthetic plants. Various plants and plant-derived materials are used for biofuel manufacturing. Globally, biofuels are most commonly used to power vehicles, heating homes cornstoves and cooking stoves. Biofuel industries are expanding in Europe, Asia and the Americas.

Types

First generation biofuels
'First-generation biofuels' are biofuels made from sugar, starch, vegetable oil, or animal fats using conventional technology.[10] The basic feedstocks for the production of first generation biofuels are often seeds or grains such as wheat, which yields starch that is fermented into bioethanol, or sunflower seeds, which are pressed to yield vegetable oil that can be used in biodiesel.

Second generation biofuels
Main article: Second generation biofuels
Supporters of biofuels claim that a more viable solution is to increase political and industrial support for, and rapidity of, second-generation biofuel implementation from non food crops, including cellulosic biofuels.[23] Second-generation biofuel production processes can use a variety of non food crops. These include waste biomass, the stalks of wheat, corn, wood, and special-energy-or-biomass crops

Third generation biofuels
Main article: Algae fuel
Algae fuel, also called oilgae or third generation biofuel, is a biofuel from algae. Algae are low-input, high-yield feedstocks to produce biofuels. It produces 30 times more energy per acre than land crops such as soybeans.[25] With the higher prices of fossil fuels (petroleum), there is much interest in algaculture (farming algae). One advantage of many biofuels over most other fuel types is that they are biodegradable, and so relatively harmless to the environment if spilled.[26][27][28]

Fourth generation biofuels
An appealing fourth generation biofuel is based on the conversion of vegoil and biodiesel into gasoline. [29]

Craig Venter's company Synthetic Genomics is genetically engineering microorganisms to produce fuel directly from carbon dioxide on an industrial scale.[30]

http://en.wikipedia.org/wiki/Biofuel

Liquid biofuels have been used since the early days of the car industry. Nikolaus August Otto, the German inventor of the internal combustion engine, conceived his invention to run on ethanol. Rudolf Diesel, the German inventor of the Diesel engine, designed it to run on peanut oil. Henry Ford originally designed the Ford Model T, a car produced from 1903 to 1926, to run completely on ethanol. However, when crude oil became cheaply available (thanks to oil reserves discovered in Pennsylvania and Texas), cars began using fuels derived from mineral oil: petroleum or diesel.

http://en.wikipedia.org/wiki/Biofuel