For production is done by using these two methods

For the
production of second generation biofuels biomass are used but biomass are
categories into three main categories ;non homogeneous like  feed stock as a low value are included like
municipal solid waste. Second category  is
homogeneous: like white wood chips which have price value between  US$100 to US$120/t. and third category
is quasi homogeneous, in which   forest and agriculture residues are included
and have US$60 and US$80/t; price.( From first- to third-generation biofuels).
the  process of conversion for second
generation production is done by using these two methods like: bio or thermo
pathways. Gasification is included 
in  the thermo-  conversion in which the conversion  of carbonaceous to gaseous products through a
process of partial oxidation  . In  gasification of biomass the lignocellulosic structure
of biomass is break down by giving temperature into following component like
carbon dioxide, carbon monoxide and hydrogen which are main components but some
amount of methane is also produced and different types of gases.( Bioconversion
of synthesis gas to second generation biofuels: A review) .

Second method is biological conversion in which organisms
that are hydrogenogenic  are used to
produced hydrogen by the oxidation of CO. and energy for this method is
provided by transfer of the electron from CO to water (H2O) which is
indicated in the following reaction:

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H2O +CO ? CO2 + 2H+ + 2e-

2e- + H+? ? H2                 

Electrons and protons are provided by carbon monoxide and
energy is provided for the cell growth by hydrogenise enzyme and following  is overall reaction:

CO + H2O ? CO2 + H2

G = ?20.1 kJ/mol.

4.46 kcal/mol CO is produced 
by the biological method while e 61.1 kcal/mol CO is produced by the
aerobic conversion by using following reaction:

O2 +C O ? CO2

(Bioconversion of synthesis gas to second generation
biofuels: A review).

It is thought that emission of carbon is reduced by the
second generation, efficiency of energy is increased and it is also mentioned
that third and forth generation biofuels are  being explored. In the same way there are some
drawback of second generation  biofuels
like cost problem,it means second generation biofuels cannot produced on large
scale at commercial level due to the high cost.( Second-generation biofuels and
local bioenergy systems).it is very difficult to determine the investment cost
on the non mature methods like second generation biofuel  but it is based on investment opportunity and
we can define the IO as annual investment which which we have done is equal to
the net earning.( Assessment of the energy and economic performance of second
generation biofuel production processes using energy market scenarios).

Third generation biofuels:

Yeast ,
fungi and algae are used as a source for the production of third generation
biofuel. There are three mechanisms available 
for the production of algae like: mixotrophic , photoautotrophic and
heterotrophic. All these processes are natural. Oil that is removed from the
algae is converted into different types of fuels like: ethanol, carosene,
gaseous transportation fuel , and aviation fuel by using appropriate methods.(
A viable technology to generate third-generation biofuel). Fuel that is
collected from seaweed is considered as a third generation biofuel. In seaweeds
lignin is not present and  level of lipid
content and cellulose is low. But high solid content  are present in seaweed.( What is the gross
energy yield of third generation gaseous biofuel sourced from seaweed?).we can
also say that third generation of biofuel is an advanced biofuel due te
advanced processes used for its production 
and as an advanced feedstock.( Design of a Multifunctional Reactor for
Third Generation Biofuels Production).

large amount
of production is gathered from the microalgae and can be refined on non-araable
land. Micro algae can be grown on sea , fresh , brackish or even waste water
and can gather upto 60 percent oil per dry weight under stress conditions.().
Algae has ability to grow throughout the year therefore its oil production rate
is higher as compared to other oil seed crops. Nitrogen and phosphorus can be
used as a nutrient for the growth og algae. Due to its higher production of oil
then others it can be converted into the biodiesel by using different
techniques.( Scope of algae as third generation biofuels). Micro algae have more
photosynthetic capacity than other terrestrial plants. Per year oil that
is produced by the algae is 47000–308000 L ha1. But if we compare it with palm
oil than the production of biodiesel from palm is 5950 per year.( Biodiesel
from microalgae: A critical evaluation from laboratory to large scale
production). Microalgae involves in various activities to control the pollution
of environment. By study some previous research papers knowledge gaps are
present between strain selection, hybrid technological options and algal types
to control the pollutions during the production of feedstock.( Microalgae for
third generation biofuel production, mitigation of greenhouse gas emissions and
wastewater treatment: Present and future perspectives e A mini review).
Biodiesel that is produced from microalgae increase the efficiencies and reduce
the cost of biodiesel. Lipid content that are present in the microalgae are
mostly neutral because they are highly saturated. Microalgae fix the carbon
dioxide in the environment and reduce the level of carbon dioxide in the
atmosphere.( Microalgae as a sustainable energy source for biodiesel
production: A review). Biodiesel that is produced from current technologies is
two to three times costly as compared to the gasoline and diesel. The cost of
biodiesel is US$0.5 per liter but the price of normal diesel is US $0.35 per
liter. Therefore it is considered that the production of biodiesel is costly
than other oils production.( A comprehensive review on biodiesel as an
alternative energy resource and its characteristics).