What is Biofuel Energy? How to Start a Biofuel Plant?

. 7 min read
What is Biofuel Energy? How to Start a Biofuel Plant?

In 2015, 189 countries all over the world ratified the Paris Agreement with the central aim of limiting the rise of global temperatures in this century below 2 degrees Celsius. To reach this goal, the participating countries have agreed to invest in new technologies in order to harness energy. Climate change is the biggest existential threat to mankind and our way of life. It is experienced through shifts in temperature, rainfall, rise in sea levels and weather volatility. Climate change is on track to putting 100 million people back in extreme poverty by 2030.

Where to start?

Learning about how biofuel is created is essential to actually starting a biofuel plant. The most common types of biofuels used today are ethanol and biodiesel. These fuels are considered to be first generation biofuels. With increased breakthroughs in bioenergy technology, it is expected that biofuels will be made from non-food sources and provide advancements in hydrocarbon biofuels.

Choosing the right biofuel

You must choose which type of biofuel your plant will create. This decision will depend on a number of factors, from ease of production to access to raw materials. In 2018, the total amount of electricity generated from renewables was 6,586 TWh. Of this, bioenergy contributed 523 TWh. Biofuel is the energy derived from biomass. Biomass refers to plant and algae material, and animal waste. These materials are regularly replenished and hence, biofuel is considered a renewable source of energy.

Choosing the right Biofuel Source

Some of the sources of biofuel are already being used extensively to produce biofuels while others are still under development.

1. Algae: Algae can produce up to 300 times more oil per acre than conventional crops. It has been used experimentally as a new form of green jet fuel designed for commercial travel. However, the production of biofuels from algae is still not commercially viable.

2. Carbohydrates rich biomaterial: Produced from existing crops, it can be used in an existing gasoline engine. It is used extensively in the auto industry and for heating buildings.

3. Oil rich biomaterial: It is used in the creation of biodiesel fuel for automobiles, home heating, and experimentally as a pure fuel itself.

4. Agricultural waste: Very little processing is required even if it is low-tech. It naturally holds carbon dioxide rather than releasing it. The off-gasses have been used in home heating.

Once you have figured out which source of biofuel you are going to use, you can decide on the biofuel to produce. You have a few viable options, given today’s advancement in the technology. A biofuel plant’s technology and design depend on the fuel it is extracting. A biodiesel plant will vary from an ethanol plant. Plan to get the required amount of raw material from reliable sources and distributors. You should have enough space to store it safely for a given period of time.


Ethanol made by fermenting sugar extracted from sugar cane or sugar beets, or from sugar extracted from starch-laden crops. Ethanol can be used as a fuel for vehicles in its pure form, but it is usually used as an additive to improve vehicle emissions. Global production of first-generation bio-ethanol in 2006 was about 51 billion liters, with Brazil (from sugar cane) and the United States (from maize) contributing about 35% each to the total. China and India contributed 11% to global ethanol production in 2006.


Biodiesel can be used as a fuel for vehicles. However, it is usually used as a diesel additive to reduce levels of pollution. It is a fuel produced from vegetable oils, animal fats, or grease. Biodiesel has cleaner burning and less sulfur content than regular diesel. Commercially, biodiesel is produced by the transesterification of triglycerides in the presence of an alcohol and a catalyst. Glycerin is a major by-product of this process. Biodiesel must be purified, with all the glycerin removed before being used as a fuel.

Setting up the biofuel plant

The most important step in setting up a biofuel plant involves registering your company with the right authorities and obtaining the right licenses. You might require investors or sponsors for the company. You can also apply for a loan from a bank. If you get a loan from a government-run bank, you might be eligible for certain grants.

The money you have secured for establishing the biofuel plant will be used for the following:

  • Construction - Money required to build the actual plant and all the supporting infrastructure.
  • Maintenance - Money required to maintain the plant, its smooth running, and other operational charges like utilities.
  • Salaries - Hiring and training the right people can be the difference between success and failure.
  • Legal fees - You will need a competent legal team who can take care of the documentation of the plant. They have to have your plant registered with the right authorities and ensure that all financial charges are paid on time.
  • Soft costs like reports and studies - You will need to rely on reports and studies in order to decide where and how to produce the biofuel. These reports can include sourcing of the raw material, quality tests of the biofuel produced, and overall cost ratio of the product.

Educate yourself about the process of creating biofuel. You can also hire experts who can help you streamline your production to a more efficient standard. These experts can work as consultants or full-time employees.


Setting up your plant and producing the biofuel is only half the process. It is imperative to establish connections with clients who will buy the biofuel output from your plant. You might have a memorandum of understanding (MoU) with these companies, or even a contract. Make sure that you are able to produce the quantity of biofuel needed.

However, in some cases, you will also need to educate the public and other clients in order to increase demand for biofuel. This can be done on a local level, to educate people about the positives of switching to biofuel and the benefits they can reap. It can also be a larger campaign to inform or change the public perception of biofuel.

Here are a few points you should market heavily in order to drum up more interest in biofuels.

Easy to Use

Biofuels can be used in current vehicles without needing any changes. Most modern vehicles can even switch between biofuels and petroleum fuels conveniently.

Energy Security

Biofuels can be produced locally with little investment. They remove the dependency on other nations and allow countries to meet a large portion of their energy needs on their own.

Economic Development

Investment in biofuel technology invigorates local economies and provides hundreds, if not thousands, of new jobs. Developing economies can benefit greatly from opening their doors to biofuel production.

Reduction in Greenhouse Gas Emissions

Biofuels are cleaner than fossil fuels, as they do not produce as many pollutants or carcinogens. A switch to biofuels in transportation will see a significant reduction in emissions of greenhouse gases.

Energy Balance

Energy balance refers to the ratio of the energy used to produce and distribute the fuel compared to the energy produced by the energy source. Biofuels have a high energy balance, making them an efficient choice.


Biofuels are less toxic than regular fuels. In fact, they are less toxic than table salt. The fuels can be recycled and used for many different applications with minimal waste.


Starting and maintaining a biofuel plant requires dedication and a willingness to learn from experts. You should focus on developing a network of reliable sources for the raw material and an increasing network of clients who are willing to see the benefits of biofuel. Develop a simple, yet comprehensive, business plan before embarking on your mission to set up a biofuel plant.

Also read:

1) How to start a composting business?
2) How to start Refurbished Furniture Manufacturing Business?
3) What Is Rainwater Harvesting & How to Start This Business?
4) How to Start Recycling Business In India?
5) Biodiesel Manufacturers in India

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Q. What are biofuels used for?

Ans: Biofuels are used for transportation, energy generation, providing heat, charging electronics, cleaning oil spills, cooking, lubrication, and creating energy.

Q. Is biofuel efficient?

Ans: Studies show that biodiesel outperforms petrol, and conventional diesel in reducing carbon dioxide emissions and, perhaps more importantly, in overall fuel-efficiency.