This publication examines the positives and negatives involved in the development of biofuels in Paraguay. Having analyzed the conditions for the production of biofuels in Paraguay, the report concludes that there are development opportunities for biodiesel and ethanol. Ethanol currently carries substantial technical and economic advantages due to sugar cane cultivation developed in the country over decades, but the immediate domestic market is limited. Therefore, further development of the sector is most likely reliant on the development of new international markets.