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The short and easy answer is "it depends." The production of biofuels depends on the type of biofuel being produced. When biomass is converted directly into liquid fuels, those fuels are called "biofuels;" therefore, "biofuel" is not a single type of fuel. Rather, it is a category of fuels. Two of the most common types of biofuels are ethanol and biodiesel.

Ethanol is a renewable fuel that is made from multiple types of plants. Ethanol is a type of alcohol, and it is blended with gasoline to produce fuels with higher octanes. E10 and E85 are both common ethanol blends and "flex fuel" vehicles are designed to run on the E85. These fuels also produce less carbon monoxide and contribute to lower smog emissions. Generally, ethanol is made from plant starches and sugars, and the most common method for production is fermentation. Organisms like bacteria and yeast naturally metabolize the plant sugars and produce ethanol.

Biodiesel burns cleaner than standard petroleum based diesel fuels. It is produced from sources like new and used vegetable oils as well as animal fats. The fuel is produced by transesterification. It is a fairly simple process and involves combining a catalyst (like sodium hydroxide), alcohol, and recycled cooking grease, animal fat, or vegetable oil. Like ethanol, the biodiesel is commonly blended with standard petroleum diesel fuel; however, there are engines that are capable of running on pure biodiesel.

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