Biofuels are acting as a renewable replacement for petroleum fuels due to some environmental and economic benefits. They are prepared by blending a major portion of diesel fuel and a certain minor percentage of bio-oils, which provides less greenhouse gas (GHG) compared to pure diesel. Recently, bioethanol has been the most widely used biofuel for transportation. Bioethanol can be produced from different kinds of agricultural raw materials classified into three categories: simple sugars, starch, and lignocellulose. Use of bioethanol-blended gasoline fuel for automobiles can significantly reduce petroleum use and exhaust GHG emission. Bioethanol from sugar cane, produced under the proper conditions, is essentially a clean fuel and has several clear advantages over petroleum-derived gasoline in reducing GHG emissions and improving air quality in metropolitan areas. However, there remains a compromise between GHG emission and saving of fossil fuel energy by introducing bioethanol either totally or as a blending component of engine fuel. Thus, considering biofuel as a replenishable energy source, the future pathway of energy management could be planned.