Advancements and Challenges in Second‐ and Third‐Generation Biofuels: A Comparative Analysis of Lignocellulosic and Algal Feedstocks

ABSTRACT Advanced biofuels derived from nonfood biomass are increasingly recognized as strategic components of low‐carbon energy systems, particularly for sectors where direct electrification remains difficult. Second‐generation biofuels from lignocellulosic residues and third‐generation biofuels from algal and aquatic biomass offer complementary pathways for reducing dependence on fossil fuels while supporting waste valorization, carbon mitigation, and circular bioeconomy development. However, existing reviews often examine lignocellulosic or algal biofuels separately, with limited integrated comparison of their feedstock constraints, conversion technologies, energy requirements, life cycle performance, techno‐economic feasibility, and commercialization readiness. This review addresses this gap by critically comparing second‐ and third‐generation biofuels across feedstock availability, biochemical and thermochemical conversion routes, catalytic upgrading, hydrothermal processing, biorefinery integration, LCA/TEA outcomes, and policy drivers. Lignocellulosic systems benefit from abundant agricultural and forestry residues and relatively mature conversion platforms but remain constrained by biomass recalcitrance, pretreatment severity, enzyme cost, and logistics. Algal systems offer high productivity, metabolic flexibility, CO 2 utilization, and wastewater integration but face major barriers related to cultivation cost, harvesting, dewatering, and low net energy performance. This review further highlights emerging low‐energy and wet‐biomass routes, including hydrothermal liquefaction, hydrothermal carbonization, anaerobic digestion, and integrated resource‐recovery strategies. Overall, second‐ and third‐generation biofuels should be viewed not as competing options but as complementary pathways whose sustainability depends on source‐specific feedstock management, process integration, coproduct valorization, renewable energy inputs, and supportive policy frameworks.