Biofuels can be directly or indirectly produced from living organisms or from biomass (commonly produced from plants, animals, microorganisms, and organic and food waste products). Biofuels may be solid, liquid or gaseous, however, a true biofuel must contain over 80% renewable materials.

Biofuels are typically classified by generations:

• First-generation biofuels are derived from basic feedstock and plants still used to feed humans and animals. (Examples include: bioethanol, biodiesel, vegetable oil, and biogas)
• Second-generation biofuels are produced from non-food sources. (Examples include: biohydrogen, biomethanol, biohydrogen diesel and mixed alcohols)
• Third-generation biofuels are typically produced from non-food sources. (Examples include: algae fuel and alcohols like bio-propanol or bio-butanol)

To learn more, go to:
http://www1.eere.energy.gov/biomass/abcs_biofuels.html
http://www.unep.fr/scp/rpanel/pdf/Assessing_Biofuels_Full_Report.pdf