How to Invest in Biofuels
Biofuels generally include a number of fuels that are created in some manner from renewable energy sources or biomass. Many biofuels are made from other commodities, such as sugar, starch, and vegetable oil.
Biofuels are not commodities in the traditional sense, most notably because the lack the fungibility that allows for large scale trading and integration into global financial markets. But these resources are intertwined with more traditional commodities such as crude oil and natural gas because interest in renewable fuel sources in increasing.
Because the biofuels market is young and still developing at a rapid pace, options for investing in these resources are limited. There are, however, a few choices for interested investors, including an ETN linked to a biofuels index.