Biofuels are regarded as one of the most viable options for reduction of CO2 emissions in the transport sector. However, conventional plant-based biofuels (e.g., biodiesel, bioethanol)’s share of total transportation-fuel consumption in 2016 was very low, about 4%, due to several major limitations including shortage of raw materials, low CO2 mitigation effect, blending wall, and poor cost competitiveness. Share of biofuels to meet the target of 2 degree scenario (2DS) is predicted to be about 31% of transport energy. Advanced biofuels such as cellulosic, microalgal, and electro biofuels produced from the inedible feedstocks, are considered to be a promising solution to the problem of how to cope with the growing biofuel demand. However, there are still many challenging issues to be resolved for commercialization of the advanced biofuels. Current status and major challenging issues associated with the advanced biofuels will be covered.