There has been great concern Worldwide about the continued greenhouse gas emission, particularly CO2 into the atmosphere from the combustion of fossil fuels (especially those derived from petroleum). The depletion of the ozone layer is a consequence of such emission. To limit the ultimate CO2 level in the atmosphere, many countries have embarked on the search for an alternative fuel source for decades. Of the successes recorded so far, only three–ethanol, biodiesel and wood waste and other biomass have been commercially exploited in most advanced countries. In Nigeria, concerted efforts are currently on by both individuals and the organized private sector to produce biodiesel from oil seeds-bearing plants such as jastropha. In this paper, the technologies of ethanol and biodiesel production as well as the efficiencies of these fuels when compared to petroleum fuels are discussed. The paper also reviews the environmental advantages of these biofuels over fossil fuels and the factors that may mitigate its full development in Nigeria.