The higher rate of depletion in petroleum products call for an alternative fuel thus biofuels are becoming hugely popular. biofuel have many attributes like they are helping mitigating climate change and are very reliable they can also be used as additives and can be used in many engines type and on top of that it is carbon neutral. The discussion covers various aspects of green fuel usage and its sources. Then the first, second and third generation of biofuel and different innovative sources of raw organic materials like energy crops, forest biomass, Agriculture residues, Industrial waste, municipal solid waste, plant cell wall engineering, algae from which we can extract the green fuel. Further, a clear picture of manufacturing of bioethanol is mentioned with various illustrations are mentioned. The processes involved are grinding in hammer then cooking and liquefaction followed by fermentation, distillation as last stage to increase of ethanol concentration, and additionally the production of biodiesel through photo bioreactor. Then, the current trends in the application and up gradation of biofuel s are explained with its numerous applications in different industries.