Biofuel is any fuel that derives from biomass - recently living organisms or their metabolic byproducts, such as manure from cows. It is a renewable energy source, unlike other natural resources such as petroleum, coal and nuclear fuels. The carbon in biofuels was recently extracted from atmospheric carbon dioxide by growing plants, so burning it does not result in a net increase of carbon dioxide in the Earth's atmosphere. As a result, biofuels are seen by many as a way to reduce the amount of carbon dioxide released into the atmosphere by using them to replace non renewable sources of energy.

Agricultural products specifically grown for use as biofuels and waste from industry, agriculture, forestry, and households - including straw, lumber, manure, sewage, garbage and food leftovers - can be used for the production of bioenergy. Currently, most biofuel is burned to release its stored chemical energy. Research into more efficient methods of converting biofuels and other fuels into electricity utilizing fuel cells is an area of very active work. Bioenergy covers about 15% of the world's energy consumption. Most bioenergy is consumed in developing countries and is used for direct heating, as opposed to electricity production. However, Sweden and Finland supply 17% and 19% respectively, of their energy needs with bioenergy, quite high for industrialized countries. Biomass can be used both for centralized production of electricity and district heat, and for local heating.

See also Ethanol, Biodiesel.