First-generation biofuels are biofuels made from sugar, starch, vegetable oil or animal fats using conventional technology. The basic feedstock's for the production of first generation biofuels are often seeds or grains such as sunflower seeds, corn or soybeans which are pressed to yield vegetable oil that can be used for producing biodiesel. These feedstock's could instead enter the animal or human food chain, and as the global population has risen their use in producing biofuels has been criticised for diverting food away from the human food chain, leading to food shortages and price rises.

Second-generation biofuels use non-food crops as the feedstock, these include waste biomass, the stalks of wheat, corn, wood, and special-energy-or-biomass crops (e.g. Miscanthus). Second generation (2G) biofuels use biomass to liquid technology, including cellulosic biofuels. Many second generation biofuels are under development such as biohydrogen, biomethanol, DMF, Bio-DME, Fischer-Tropsch diesel, biohydrogen diesel, mixed alcohols and wood diesel. Cellulosic ethanol production uses non-food crops or inedible waste products and does not divert food away from the animal or human food chain. Lignocellulose is the "woody" structural material of plants. This feedstock is abundant and diverse, and in some cases (like citrus peels or sawdust) it is in itself a significant disposal problem

Algae fuel, also called oilgae or third generation biofuel, is a biofuel from algae. Algae are low-input, high-yield feedstock's to produce biofuels. Based on laboratory experiments, it is claimed that algae can produce up to 30 times more energy per acre than land crops such as soybeans, but these yields have yet to be produced commercially. With the higher prices of fossil fuels (petroleum), there is much interest in algaculture (farming algae). One advantage of many biofuels over most other fuel types is that they are biodegradable, and so relatively harmless to the environment if spilled. Algae fuel still has its difficulties though, for instance to produce algae fuels it must be mixed uniformly, which, if done by agitation, could affect biomass growth.