This contribution discusses the state of the art and the challenges in producing biofuels, as well as the need to develop chemical conversion processes of CO2 in Brazil. Biofuels are sustainable alternatives to fossil fuels for providing energy, whilst minimizing the effects of CO2 emissions into the atmosphere. Ethanol from fermentation of simple sugars and biodiesel produced from oils and fats are the first-generation of biofuels available in the country. However, they are preferentially produced from edible feedstocks (sugar cane and vegetable oils), which limits the expansion of national production. In addition, environmental issues, as well as political and societal pressures, have promoted the development of 2nd and 3rd generation biofuels. These biofuels are based on lignocellulosic biomass from agricultural waste and wood processing, and on algae, respectively. Cellulosic ethanol, from fermentation of cellulose-derived sugars, and hydrocarbons in the range of liquid fuels (gasoline, jet, and diesel fuels) produced through thermochemical conversion processes are considered biofuels of the new generation. Nevertheless, the available 2nd and 3rd generation biofuels, and those under development, have to be subsidized for inclusion in the consumer market. Therefore, one of the greatest challenges in the biofuels area is their competitive large-scale production in relation to fossil fuels. Owing to this, fossil fuels, based on petroleum, coal and natural gas, will be around for many years to come. Thus, it is necessary to utilize the inevitable CO2 released by the combustion processes in a rational and economical way. Chemical transformation processes of CO2 into methanol, hydrocarbons and organic carbonates are attractive and relatively easy to implement in the short-to-medium terms. However, the low reactivity of CO2 and the thermodynamic limitations in terms of conversion and yield of products remain challenges to be overcome in the development of sustainable CO2 conversion processes.