Biodiesel usually costs over 0.5 US$/l, compared to 0.35 US$/l for petroleum-based diesel (Demirba§ et al., 2009). It is reported that the high cost of biodiesel is mainly due to the cost of virgin vegetable oil (Krawczyk, 1996; Connemann & Fischer, 1998). For example, the soybean oil price is currently 1.27 $/l while the palm oil price is 1.18 $/l (World-Bank, 2011). Biodiesel from animal fat is currently the cheapest option (0.4-0.5 US$/l), while the traditional transesterification of vegetable oil is, at present, around 0.6-0.8 US$/l (Bender, 1999). Zhang et al. (2007) stated that there is no global market for ethanol. Within the reasons for this, crop types, agricultural practices, land labour costs, production plant sizes, processing technologies and government policies can be cited. The cost of ethanol production in a dry mill plant currently totals 0.44 US$/l. Corn represents 66% of operating costs while energy (electricity and natural gas) to fuel the production plant represents nearly 20% of operating costs. Nevertheless, ethanol from sugar cane, produced mainly in developing countries with warm climates, is generally much cheaper to produce than ethanol from grain or sugar beet (Bender, 1999). For this reason, in countries like Brazil and India, sugar cane-based ethanol is becoming an increasingly cost-effective alternative to petroleum fuels. On the other hand, ethanol derived from cellulosic feedstock using enzymatic hydrolysis requires much greater processing than from starch or sugar-based feedstock, but feedstock costs for grasses and trees are generally lower than for grain and sugar crops. If targeted reductions in conversion costs are achieved, the total cost of producing cellulosic ethanol in EOCD countries could fall below that of grain ethanol. Estimates show that ethanol in the EU becomes competitive when the oil price reaches 70 US$/barrel, while in the USA it becomes competitive at 50-60 US$/barrel. For Brazil and other efficient sugar producing countries such as Pakistan, Swaziland and Zimbabwe, the competitive ethanol price is much cheaper, between 25-30 US$/barrel. However, anhidrous ethanol, blendable with gasoline, is still more expensive, although prices in India have declined and are approaching the price of gasoline. Although the feedstock costs represent the majority of biofuels’ cost, the production plant size can reduce the final cost of the fuel. Thus, the generally larger USA conversion plants produce biofuels, particularly ethanol, at lower cost than plants in Europe. Production costs are much lower in countries with a warm climate such as Brazil, with less than half the costs of Europe. But, in spite of the reduced costs of production, ethanol from Brazil is competitive with gasoline owing to the huge sugar cane production and the cogeneration of electricity (Demirba§ et al., 2009).