However, biofuels are also seen to have its limitations. The feedstock for biofuel production has to be replaced rapidly and the production of biofuel must be designed and implemented such that the maximum amount of fuel is supplied at the cheapest cost. All the while providing maximum environmental benefit. Broadly speaking, the first generation biofuel production processes is simply not enough to supply us on a sustainable basis, accounting for only more than a few percent of our energy requirements. The reasons for this are as follows: second generation processes can supply us with more biofuel, together with better environmental gains. But the major barrier to the development of second generation biofuel processes is their capital cost. Establishing second generation biodiesel plants has an estimated cost of around USD500 million.
In practice, biofuels are neither carbon neutral nor carbon negative. This is because energy is required to grow crops and process them into fuel. Examples of energy use would be during the production of biofuels like manufacturing fertilizers, fuel to power machinery, and fuel for transportation. The amount of fuel used during biofuel production has a large impact on the overall greenhouse gas emissions savings achieved by biofuels.