Most biofuels are made from fermenting things like sugar crops or natural plant oils. Other things like wood can be made into biofluel as well.
Sugar crops, such as sugar beets or sugar cane, can be transformed through fermentation into ethanol, which is a liquid fuel used in transportation. Algae, palm and soybean oils can also be burned directly in a diesel engine to produce biodiesel. Wood can be used as fuel when it is directly burned in specialized furnaces.
Some companies have begun growing specialized plants that produce larger amounts of natural oils. This oil goes through a refining process and is then mixed with mineral diesel and can be used in any diesel vehicle. Fermented sugar crops release a natural ethanol when processed. This natural ethanol gets mixed with gasoline, and the mixture will work in any gas-powered engine.
There are reasons why these types of biofuels have not caught on yet. Ethanol tends to be more corrosive than gasoline, so it is limited for use in cars and trucks and cannot be used in airplanes or boats. As of 2014, scientists continue looking for ways to make biofluels a viable alternative to fossil fuels.