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Energy supply and environmental change are the challenges facing humanity today. The need to develop new, carbon neutral forms of energy is now urgent. Bio-energy is a promising option that offers both energy sustainability and greenhouse gas emissions mitigation. In 2005 biomass provided 13.4% of current world energy needs, mainly as a heating and cooking fuel in rural communities, However, even with the increasing contribution from industrially produced biomass fired heat and power, the use of bio-diesel from oil crops and ethanol derived from maize and sugar-cane, the overall percentage contribution of bio-energy to world energy needs diminishes with time. Increasing bio-energy use to supplement the world΄s energy needs will require the growing of energy crops on a large scale, entailing changes to agricultural and forestry production techniques and the identification of new bio-energy feed-stocks. The use of ethanol from maize and sugar cane to replace petrol has more than tripled in 6 years and biodiesel from the esters of oil from crops such as palm, soya and oil seed rape now contributes 4% of Europe΄s diesel needs. However these first generation biofuels use valuable arable land and food crops in competition with human food needs and are not efficient energy producers per hectare of land nor do they effectively mitigate greenhouse gas emissions. Ligno-cellulosic ethanol, bio-butanol, bio-gas and biodiesel from gas to liquid bio-refineries using native grasses, Miscanthus, wood processing waste and short rotation coppice willow and non-food oil seed plants such as Jatropha enable non arable land and non food crops to be used for second generation biofuels. In addition, autotrophic algae have been shown to exceed productivity of many oil crops in using sunlight and carbon dioxide for oil accumulation.Microbial oils can also be used as feedstock for biodiesel productions with -advantages like short life cycle, less labour intensive, less seasonal, geographical and climatic variability and easy scale up. This paper reviews first and second generation bio-energy systems for producing biofuels and investigates the potential of biotechnology to improve the sustainability and profitability of existing and future biofuels bio-energy systems. [ABSTRACT FROM AUTHOR]