BioFuels

Corn ethanol

Pluses: May reduce U.S. reliance on oil imports and enable moderate reduction in emissions of greenhouse gases compared with oil. Fosters the building of biofuels infrastructure.

Minuses: Ethanol is energy intensive to produce, and the recent boom has pushed corn prices to more than $5 a bushel (from $2 in 2006). That is increasing the cost of everything from beef to soft drinks. The biofuels craze is helping drive up grain prices worldwide as farmers devote more acres to corn and less to other crops. Over 450 pounds of corn are needed to fill a 25-gallon tank with ethanol_ enough calories to feed a person for a year.

Biodiesel

Pluses: Made from vegetable oils like soy and canola and animal fat, biodiesel provides 90% more energy than is required to produce it. Compared with petroleum-based diesel fuel, biodiesel is estimated to cut greenhouse-gas emissions 40% to 80%.

Minuses: Like corn ethanol, biodiesel's production from food crops boosts "agflation." European demand has been blamed for inducing farmers in Southeast Asia to burn and replant the rain forest with palm plantations, which has released large amounts of greenhouse gases. Production is limited at the moment_ just 250 million gallons in 2006.

Sugar-cane ethanol

Pluses: Sugar cane yields more ethanol per acre than corn, and it requires less energy to produce; hence, it is regarded as greener than corn ethanol. Sugar isn't a food staple, so making ethanol from it hasn't driven up food prices as has the production of large amounts of corn ethanol. Brazil makes nearly as much ethanol from sugar cane as the U.S. does from corn; cane provides nearly half of Brazil's transportation fuel from plants grown using about 1% of its arable land.

Minuses: Growing sugar cane requires a warm, rainy climate, which limits its potential as a global fuel source.

Cellulosic ethanol

Pluses: Made by breaking down wood chips, farm waste, and nonfood crops like grasses, cellulosic ethanol wouldn't require diverting the use of cropland. Scientists are making progress at breaking down plants' tough cellulose and lignin molecules, the key to turning nonfood biomass into fuel.

Minuses: Still costly and difficult to make, ethanol produced from nonfood plants is more energy intensive than that made from corn and sugar cane. By one estimate, putting all the grassland in the U.S. into fuel production could replace only about 10% of petroleum.

Algal biofuel

Pluses: The fastest-growing plants, algae theoretically can produce 30 times more energy per acre than other biofuel options. A particularly rich mix of byproducts can be made in algal-biofuels operations (everything from nutraceuticals to feedstocks for making plastics), potentially abetting their cost-effectiveness. This is the biofuels' dark horse.

Minuses: Unlike cellulosic ethanol, the biomass for making a lot of fuel from algae doesn't yet exist; it has to be grown from scratch. Harvesting is still expensive. Cost-effectively producing algal biofuels on a large scale may be many years away.

Source : http://money.cnn.com/galleries/2008/fortune/0804/gallery.green_biofuels.fortune/index.html