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The global energy crisis affects all of us. With a growing global population and finite fossil fuel supplies, we must find new energy sources. Alternative energy sources must be prioritized. Biofuels like biodiesel, biohydrogen, biomethanol, and bioethanol have come a long way in recent decades. These alternative fuels are from low-cost, renewable sources like algal, microbial, and plant biomass. Several governments, including India, are improving their renewable energy production capabilities. The main obstacles to rapid biofuel adoption are time and cost. For biofuel to truly become a viable alternative to fossil fuels, nanotechnology has recently provided the much-needed impetus. Nanomaterials' unique structural behavior, such as small size (nanoscale size), has increased their use in biofuel production. It improves efficiency and reduces the time required to convert waste into biofuels. This review addresses the latest information on various types of nanoparticles, and challenges faced and the future prospects of emerging applications of nanoparticles in biofuel production.