In recent years, upward increase of energy consumption and fossil fuel usage as the main source of energy along with its limitations and also concerns about its environmental impacts proves the significance of finding alternative sources. Thus, wide-ranging studies, projects and researches have been conducted on the issue around the world. Generally, this research aims at introducing diverse biofuel production methods as an essential alternative for fossil fuels. Accordingly, this article not only gives details about biofuels and their advantages and disadvantages in different phases of production and their differences but also inspects the obstacles and limitations of the so-called industry from different perspectives. Different countries’ policies about the biofuel production will also be discussed. The findings of the study indicate that despite various obstacles, biofuel production industry will be having a noticeable growth in developed countries, its non-pollutant essence and energy safety issues being the reasons for such a development.