This study analyzed how production technology progress and economic structure reformation affect the transition to biofuel or hydrogen economy in Taiwan before 2040. A model, called "Taiwan general equilibrium model-Energy for biofuel and hydrogen (TAIGEM-EBH)", was the forecast tool, considering as well the role of four new energies, including bioethanol, biodiesel, hydrogen, and fuel cell production industries. When no effort was made to advance the biofuel and hydrogen production technologies, the energy structure in Taiwan will remain almost unchanged over time, with crude oil and coal the primary energy sources up to 2040. With technological advance to reduce production cost, bioethanol will become the dominating renewable energy source, with coal and oil the main primary energy sources as well. Only with a reformed economic structure resembling a developed country, the biofuels and hydrogen economy can be realized in Taiwan.