Biomass is harvested as part of a constantly replenished crop. This maintains a closed carbon cycle with no net increase in atmospheric CO2 levels. There are five basic categories of material, that is, virgin wood, forestry materials, materials from arboricultural activities or from wood processing; energy crops: high-yield crops grown specifically for energy applications; agricultural residues: residues from agriculture harvesting or processing; food waste, from food and drink manufacture, preparation and processing, and postconsumer waste; industrial waste and coproducts from manufacturing and industrial processes.

Feedstocks that are used directly in a manner that is given to us by nature fall under the category of natural feedstocks. The first-generation biofuels use the edible biomass for producing biofuels. Some of them are sunflower seeds, jojoba oil, soya bean oil, safflower seeds for biodiesel production, and corn and sugar cane for producing ethanol. In contrast, the second-generation biofuels are produced from non edible feedstocks like lignocellulosic feedstocks which include agro residue (stalk, husk), forest residue (branch, twigs, bark, leaves), and several others.

In addition to growing currently available feedstocks on available land to produce biofuels, the realization of dedicated energy crops with enhanced characteristics would represent a significant step forward. The genetic sequences of a few key biomass feedstocks are already known, such as Poplar (Tuskan et al., 2006), and there are more in the sequencing pipeline. This genetic information gives scientists the knowledge required to develop strategies for engineering plants with far superior characteristics, such as diminished recalcitrance to conversion (Himmel et al., 2007).

Another area where genetic engineering could produce dramatically positive results is the development of perennial feedstocks that can reach high-energy densities over a short time with minimal fertilization and water consumption. By combining the known targeted climates and soil types present in the available conservation reserve program (CRP) and mar­ginal lands with tailored feedstocks, it may be possible to develop grasses and short-rotation woody crops that maximize carbon and nitrogen fixation within these ecosystems. In addition to modifying the intrinsic polysaccharide/lignin composition and central metabolism of the feedstock itself, several research groups are attempting to express enzymes that are capable of breaking down cellulose into glucose directly within plants.