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In internal combustion engines, a significant share of the fuel energy is wasted via the heat losses. This study aims to understand the heat losses and analyze the potential of the waste heat recovery when biofuels are used in SI engines. A numerical model is developed for a single-cylinder, four-stroke and air-cooled SI engine to carry out the waste heat recovery analysis. To verify the numerical solution, experiments are first conducted for the gasoline engine. Biofuels including pure ethanol (E100), E15 (15% ethanol) and E85 (85% ethanol) are then studied using the validated numerical model. Furthermore, the exhaust power to heat loss ratio (Q˙ex/Q˙ht) is investigated for different compression ratios, ethanol fuel content and engine speed to understand the exhaust losses potential in terms of the heat recovery. The results indicate that heat loss to brake power ratio (Q˙ht/W˙b) increases by the increment in the compression ratio. In addition, increasing the compression ratio leads to decreasing the Q˙ex/Q˙ht ratio for all studied fuels. According to the results, there is a direct relationship between the ethanol in fuel content and Q˙ex/Q˙ht ratio. As the percentage of ethanol in fuel increases, the Q˙ex/Q˙ht ratio rises. Thus, the more the ethanol in the fuel and the less the compression ratio, the more the potential for the waste heat recovery of the IC engine. Considering both power and waste heat recovery, the most efficient fuel is E100 due to the highest brake thermal efficiency and Q˙ex/Q˙ht ratio and E85, E15 and E00 (pure gasoline) come next in the consecutive orders. At the engine speeds and compression ratios examined in this study (3000 to 5000 rpm and a CR of 8 to 11), the maximum efficiency is about 35% at 5000 rpm and the compression ratio of 11 for E100. The minimum percentage of heat loss is 21.62 happening at 5000 rpm and the compression ratio of 8 by E100. The minimum percentage of exhaust loss is 35.8% happening at 3000 rpm and the compression ratio of 11 for E00. The most Q˙ex/Q˙ht is 2.13 which is related to E100 at the minimum compression ratio of 8.