Biofuels in the transport sector have been known as alternatives to gasoline and diesel for a long period of time. However, the use of these fuels in significant amounts has only recently commenced. The development in Sweden can be traced to a desire to decrease oil dependency and emissions of green house gases. Biofuels have the potential to contribute to that these goals are met. Sweden's national goal 2003 concerning the use of biofuels was 3 percent of all fuels in the road transport sector. The actual use reached 2.5 percent. Within the EU the goal is set to 5.75 percent by the end of 2010. The biofuels that are most commonly discussed in national and international perspectives are reviewed in his report. The aim of the report is to provide an overview of trends, use and potentials for biofuels. A distinction is made between those biofuels that are commercially available today (first generation) and those that will be introduced in the future (second generation). First, a general overview of the fuels' production processes and properties is given, and then of production costs and lifecycle perspectives. Effects of biofuels on the environment are discussed and also use and potentials in Sweden, Europe and in the world.