Bioethanol is mainly produced by fermentation of sugar. It can also be manufactured by the chemical reaction of ethylene with steam.

  The main sources of sugar required to produce ethanol comes from fuel or energy crops mainly corn, maize and wheat crops, waste straw, willow and popular trees, sawdust, reed canary grass, cord grasses, Jerusalem artichoke, myscanthus and sorghum plants. There is also ongoing research into the use of municipal solid wastes to produce ethanol fuel.

  Ethanol or ethyl alcohol (C₂H₅OH) is a clear colorless liquid; it is biodegradable, low in toxicity and causes little environmental pollution if spilt. Ethanol burns to produce carbon dioxide and water. Ethanol has a high octane fuel and has replaced lead as an octane enhancer in petrol. By blending ethanol with gasoline we can also oxygenate the fuel mixture so it burns completely and reduces polluting emissions. Ethanol fuel blends are widely sold in the United States. The most common blend is 10% ethanol and 90% petrol (E10). Vehicle engines require no modifications to run on E10 and vehicle warranties are also unaffected. Only flexible fuel vehicles can run on up to 85% ethanol and 15% petrol blends.