Of late, decrease in mineral oil supplies has stimulated research on use of biomass as an alternative energy source. Climate change has brought problems such as increased drought and erratic rains. This, together with a rise in land degeneration problems with concomitant loss in soil fertility has inspired the scientific world to look for alternative bio-energy species. Euphorbia tirucalli L., a tree with C3/CAM metabolism in leaves/stem, can be cultivated on marginal, arid land and could be a good alternative source of biofuel. We analyzed a broad variety of E. tirucalli plants collected from different countries for their genetic diversity using AFLP. Physiological responses to induced drought stress were determined in a number of genotypes by monitoring growth parameters and influence on photosynthesis. For future breeding of economically interesting genotypes, rubber content and biogas production were quantified. Cluster analysis shows that the studied genotypes are divided into two groups, African and mostly non-African genotypes. Different genotypes respond significantly different to various levels of water. Malate measurement indicates that there is induction of CAM in leaves following drought stress. Rubber content varies strongly between genotypes. An investigation of the biogas production capacities of six E. tirucalli genotypes reveals biogas yields higher than from rapeseed but lower than maize silage.