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Alternative fuels are taking accelerated steps toward overpowering traditional fuels for meeting energy demands. The low-carbon energy nature of biofuel makes it of higher priority due to climate change and increasing CO2 emissions from traditional fuels. Both the developing and industrialized nations have serious considerations for developing technologies for biofuel production. It can be clearly seen that the United States is the leader in biofuel production and stalls high as compared to any other nation. The issue of food security related to biofuel production is much more complex than anticipated in the past and requires deeper commitments for making policies regarding agriculture and export. Nanotech has emerged as one of the very handy tools for enhancing biofuel production and providing cost-effective and process-optimized methods of biofuel production. Nanoparticles have been used for enzyme immobilization, harvesting microalgae, and the development of photocatalysts. Cellulose, which in itself is a raw material for biofuel production, has been employed for nanostructured cellulose as it imparts valuable applications for biofuel production. Nanotech is an emerging area of research for efficient biofuel production.

The energy of the sun converted to chemical energy by photosynthetic plants drives the life on earth. Energy has become an important aspect of the development of human civilization. Presently 80% of the energy demand is fulfilled by the fossil fuels which are non-renewable and has a reserve up to a few years. Moreover, the combustion of fossil fuels has increased the concentration of greenhouse gases effecting the climate and ecosystem. Renewable sources of energy like biofuels are promising alternatives to reduce the dependence on fossil fuels. Butanol is one such biofuel which has shown to blend in with the present fuel like petroleum, fulfilling the energy demands of transportation and industries. Butanol was initially being produced by the crop plants hence threatening the food security. Microalgae, an easily grown photosynthetic organism, has shown its capacity to enhance and increase the production of butanol without affecting the crop fields as well as the ecology. It can be grown in large quantities in a small cost-efficient manner and then can be digested by Clostridium sp. to produce butanol through the ABE method. Apart from Clostridium, E.coli has shown its competency in genetically modifying it to concentrate on butanol production.

Cellulose, a product of photosynthesis in plants, is a vital raw material for various industrial processes such as in the paper industry, textile industry, food industry, and others. Cellulose is also used in the production of biofuel. To be utilized at an industrial level, cellulose is degraded into a simple sugar because it is a polymer. Cellulase is the enzyme that catalyzes the breakdown of cellulose into useful forms by glycosidic activity. It is a group of enzymes termed cellulosome that contains cellobiohydrolases, endoglucanases, and β-glucosidase, which work in a synchronous manner to convert cellulose into cellobiose and glucose. Conventional industrial synthesis of cellulase calls for optimizing the production process that increases the cost of cellulose. However, with the advancement of genetic engineering, the cost of production is lowered. This chapter is a brief discussion of how genetic engineering is used not only for increasing the production of cellulose but also for enhancing its activity by modulating various genetic factors like the promoter, transcription factors, repressors, and also the use of accessory proteins. Epigenetics, which is an emerging area that alters the expression rate of a gene, has been found to be useful in increasing the production of cellulase. Apart from manipulating the sequence of a cellulase gene/protein to produce its variant in fungi like that in Trichoderma reesei, it has been shown by many that cellulase can be expressed in plants and causes the degradation of cellulolytic material quite efficiently without pretreating it.

Energy is required for socio-economic and cultural development of every complex societies of the world. Basic source of energy and primary global economic center is petroleum which is a fossil fuel. Through millions of year of deposition, under high stress, fossils are transformed to important components that drives the major operations on earth. It is estimated that gasoline and natural gas may get depleted in 35 - 40 years whereas the coal reserves is for 100 years. Biofuel is considered as an excellent alternative fuel for automotive. Biofuel is a liquid, gas or solid fuel derived from biomass. Not only does environmental concerns makes biofuel a market competitor, but economic concerns serves the process as well. Although biofuel production is attempted from food crops, but algae has come up as a strong competitor to be used as a biomass for biofuel production. At present the production process is facing many obstacles for its commercialization. In the light of nanotechnology all these obstacles finds a solution for increasing and commercialization of the process. Here, how algae and nanotechnology are used for biofuel production has been discussed.