Biofuels are biologically-created fuels which are more renewable than fossil fuels, and generally considered more environmentally-friendly. They are often created using by-products of other processes, such as used cooking oil. Because of their different characteristics, most gasoline-powered vehicles aren't able to run on biofuels without some modifications.
Types of Biofuels
There are many types of biofuels, some of which are extracted from plants, others from animal by-products or unicellular organisms. The source of the fuel determines qualities, cost, and availability.
The current most-used biofuel is corn-based ethanol, which is often added to standard gasoline. The ratio of gasoline to ethanol is often expressed as a percent with the letter "E" before the percent of gasoline, which would mean a 15% ethanol, 85% gasoline mix would have the title "E85".
The most popular biofuel in Europe, bio-diesel is mostly combustable fluids extracted from natural fat and vegetable oils. This method is also popular because it uses material which would otherwise be thrown away.
Biofuels based on algae are still being developed, but have shown potential for future use. The main issues at the moment are mass-production and cost per gallon. This fuel is an oil-like substance that can be drained from certain species of algae.
Vehicles That Run on Biofuels
Most cars that run on biofuels have been modified to do so, since there are very few production cars that run on biofuels straight out of the factory. However, both Ford and Volvo produce a few cars compatable with biofuels, particularly bio-diesel.