As demand for oil increases, production from large oil fields is declining at 4-5% annually, and the world production of oil is expected to peak around 2010. In the meantime, there is one liquid fuel that is renewable and can be used in vehicles without major modification of the engine-it is biofuel (biomass fuel). Ethanol is an alcohol-based fuel produced by fermenting and distilling crops such as corn, barley, wheat, and the like. There are a few issues to be discussed regarding the use of ethanol biofuel: (i) there is a possibility that more energy is used to grow and process the raw material (e.g. corn) into ethanol than is contained in the ethanol itself, (ii) it is unclear whether the adoption of ethanol fuel will increase greenhouse gas; and (iii) a common objection to biofuel production is that it could divert agricultural production away from food crops (i.e. Subsidized food burning). After analysis of these issues., biofuel production from wood (forest) residues is considered a Sustainable approach to a renewable energy-based society. Copyright (C) 2008 John Wiley & Sons, Ltd.