Biofuels are fuels derived from biological sources. The greenhouse gases produced when biofuels are burned were previously absorbed from the atmosphere by plants as they grew. Over their entire life cycle, biofuels are therefore CO2-neutral: the CO2 released is stored again by the growth of new plants. In contrast, fossil fuels release carbon that has been stored for millions of years in the form of oil, natural gas, and coal.

Different types of biofuels include biodiesel made from vegetable oils or animal fats, and bioethanol made from plants containing sugar or starch. There are also more advanced forms such as biogenic hydrogen and advanced biofuels made from non-edible biomass sources like algae or agricultural waste.

The use of biofuels in the transportation sector can help reduce greenhouse gas emissions, as transportation accounts for about 20 percent of Europe's CO2 emissions. Biofuels can be used in existing vehicle engines, making them a possible option for the transition to sustainable transport.