Explanation:

Statement 1 and 2: Biofuels are produced through contemporary biological processes, such as agriculture and anaerobic digestion, rather than a fuel produced by geological processes such as those involved in the formation of fossil fuels, such as coal and petroleum, from prehistoric biological matter.
This prehistoric matter can be plant or animal. So, 2 is incorrect. Moreover, bio-fuels can be based on both aerobic and anaerobic digestion.
Learning: The two most common types of biofuels in use today are ethanol and biodiesel.

Cars are a major source of atmospheric carbon dioxide, the main greenhouse gas that causes global warming. But since plants absorb carbon dioxide as they grow, crops grown for biofuels should suck up about as much carbon dioxide as comes out of the tailpipes of cars that burn these fuels.
And unlike underground oil reserves, biofuels are a renewable resource since we can always grow more crops to turn into fuel.