Biofuel is the general term used to classify all type of fuels or fuel mixtures derived from biological sources, including biomass. These sources have the potential of powering small towns and regions where plentiful of biomass is created from crops and agricultural waste.

The most used type of fuel for commercial power generation is biomass. The production process includes the collection of crop waste or other biomass, and the ignition of that source which heats and converts water to steam, and that steam driving a turbine and generating electricity.

Due to the burning involved in biomass power stations, it is not considered to be entirely sustainable, and it releases considerable amounts of carbon dioxide and other pollutants. Hence this is primarily used in areas where biomass resource is exceptionally high, or places that this resource is more economical as compared to other sources. Although, various other forms of biofuels (such as types of algae power for example) are under development and experimentation, that has the potential of being completely clean and sustainable.