Advanced Biofuel Market Size - By Fuel Type (Cellulosic Ethanol, Biodiesel, Biobutanol), By Feedstock (Agriculture, Forestry, Waste), By Application, & Forecast, 2025 – 2034

Advanced Biofuel Market Size

The global advanced biofuel market was valued at USD 1.46 billion in 2024 and is estimated to grow at a CAGR of 13.9% from 2025 to 2034. Shifting focus from foreign oil to complement the energy security will increase the product requirement particularly, in nations looking to broaden their energy portfolio and guarantee a more robust energy system. Increasing uptake of biofuels with lower greenhouse gas emissions and other environmental benefits will accelerate the market growth.
 

Growing government support in terms of funds, incentives, and policies to promote advanced biofuel adoption will fuel the advanced biofuel market growth. In January 2025, the Bioenergy Technologies Office from the U.S. Department of Energy, together with the US Environmental Protection Agency, set aside USD 6 million to finance three projects, to enhance advanced biofuel development and maintain strategic positions in innovation.
 

Ongoing integration of agricultural byproducts, algae, and waste oils, coupled with other non-food biomass sources, will enhance the supply chain sustainability, thereby propelling the fuel adoption. Furthermore, technologies that enable higher yields and efficient conversion processes, making biofuels more commercially viable boosting the advanced biofuel market outlook.
 

Increasing technological developments for producing advanced biofuels such as cellulosic ethanol will encourage the industry growth. For instance, in March 2024, Terragia Biofuel, a startup that set out to revolutionize the biofuel market, received seed funding of USD 6 million. Led by Engine Ventures and Energy Impact Partners, the investment will support the commercialization of its innovative biological process for converting cellulosic biomass into ethanol and other chemical products.
 

Advanced Biofuel Market Trends

• Rising government favorable policies and incentives to encourage the production and consumption of advanced fuels including the Renewable Fuel Standard (RFS) in the U.S., the Renewable Energy Directive (RED) in the EU, and tax incentives such as the Investment Tax Credit (ITC) and Production Tax Credit (PTC) will fuel the product penetration. These policies stimulate investment as well as promote research and development in the biofuels sector.
   
• Rising global funding in biofuel projects, with programs including the U.S. Department of Energy’s Bioenergy Technologies Office (BETO) and the EU Innovation Fund will improve the product adoption. In February 2024, in line with President Biden’s Investing in America initiative, the U.S. EPA along with the U.S. DOE declared a funding opportunity announcement worth USD 9.4 million to propel the development of advanced biofuels.
   
• Heightened corporate commitment towards attaining net zero carbon emissions, in sectors such as aviation, shipping, and logistics, is expected to elevate the demand for advanced biofuels that have minimal infrastructure modifications. In addition, oil-importing nations are beginning to produce biofuels domestically to reduce dependence on crude oil which promotes energy security but also uplifts the rural economy through bio-refineries, positively enhancing the advanced biofuel market outlook.
   
• Key players are focused toward process innovation and technology upgradation which will drive the industry scenario. In January 2024, Advanced Biofuel Solutions, commenced operations at its demonstration plant in Swindon which incorporates a 22 GWh waste-to-syngas production line. The plant operated by ABSL uses RadGas technology, which efficiently generates biofuels from waste.
   

Advanced Biofuel Market Analysis

• The advanced biofuel industry was valued at USD 1,236.3 million, USD 1,341.7 million and USD 1,468.5 million in 2022, 2023 and 2024 respectively. The industry is segmented into cellulosic ethanol, biodiesel, biobutanol and others based on fuel type.
   
• The cellulosic ethanol segment is anticipated to value more than USD 2.4 billion by 2034 on account of its abundance and sustainability, contributing to lower greenhouse gas emissions compared to traditional gasoline. Rising progress in technology, with a focus on making the fuel more efficient and cost-effective, will further propel fuel adoption.
   
• Established players play a vital role in cellulosic ethanol expansion across various application and regions. In May 2023, EcoCeres, completed its first shipment of cellulosic ethanol made entirely from agricultural waste to the European market. The shipment includes 850 tons of ethanol derived primarily from corn cobs, offering over 80% reduction in greenhouse gas emissions compared to fossil fuels.
   
• The biodiesel segment is expected to grow at a CAGR of over 13.3% through 2034, on account of its lower carbon footprint and alignment with global net-zero targets and climate action commitments. Increasing demand for biodiesel blending requirements  to reduce reliance on petroleum diesel coupled with rising hydrotreated vegetable oil (HVO) and co-processing at refineries will support the fuel adoption.
   
• The biobutanol segment is expected to grow at a CAGR of over 14.6% till 2034. The segment is at an initial stage of growth and rising government support to achieve the full potential of the fuel will complement the product penetration. In November 2021, the U.S. Department of Energy’s ARPA-E has awarded USD 1.6 million to researchers from University of Illinois, Ohio State University College of Engineering, and Southern Illinois University Edwardsville.
   

• Based on application, the advanced biofuel market is segmented into transportation, aviation and others. The transportation segment holds a market share of 73.6% in 2024. Rising nations and corporations’ commitment to achieve net-zero emissions by 2050 will escalate the product adoption, offering a significant CO? reduction compared to fossil fuels, making them an essential component of sustainable transportation strategies.
   
• Growing sectors including trucking, rail, and shipping, turning towards biofuels as a practical solution with higher energy density and compatibility with existing infrastructure, will facilitate the product adoption. For instance, in July 2022, Hapag-Lloyd partnered with DHL Global Forwarding, the freight division of Deutsche Post DHL Group, to transport shipments using advanced biofuels. Initially, 18,000 TEU of DHL’s cargo will be moved using biofuels derived from used cooking oil and other waste materials.
   
• Aviation is set to grow at a CAGR of over 14.5% by 2034. Growing government support by introducing regulations and incentives to promote the use of sustainable aviation fuel (SAF) will create lucrative opportunities for the product adoption.
   
• Ongoing expansions in boosting SAF production driven by government support will stimulate the product adoption. In May 2022, in a significant move for the biofuels industry, SGP BioEnergy partnered with the Government of Panama to establish Biorefineria Ciudad Dorada. With an expected completion timeline of five years, the facility aims to churn out an impressive 180,000 barrels per day of advanced biofuels, prominently featuring SAF.
   
• Additionally, rising tax credits, subsidies, and investment incentives at national and regional levels will further fuel the development of biofuel infrastructure and encourage airlines to adopt SAF. Ongoing advances in biofuel production technologies, including improved feedstock processing, enzymatic conversion, and fermentation techniques to make biofuels more efficient and scalable for aviation use will enhance the product penetration.
   

• As of 2024, North America holds more than 36% of the market share, which is expected to improve further by 2034. The U.S. advanced biofuel market was valued at USD 415 million, 451.3 million, and 495 million in 2022, 2023 and 2024 respectively.
   
• Abundance of agricultural feedstocks, such as corn, soybean, and agricultural waste coupled with increasing concerns about climate change will enhance the product adoption. Additionally, rising government policies such as the Renewable Fuel Standard (RFS), established by the U.S. Environmental Protection Agency (EPA), mandate the blending of renewable fuels, including advanced biofuels, into the nation's fuel supply which will support the market growth.
   
• Presence of key players in the country offering advanced biofuels, such as cellulosic ethanol and algae-based biofuels in line with the acquisition of advanced biotechnology companies will complement the industry outlook. In January 2022, ExxonMobil is bolstering its foothold in advanced biofuels, targeting a reduction in greenhouse gas emissions from transportation. The energy giant has taken a 49.9% stake in Biojet AS.
   
• Asia Pacific advanced biofuel market is expected to reach more than USD 810 million by 2034. Countries in the region are setting decarbonization targets, with commitments to achieve net-zero emissions. Furthermore, rising investments in bio-refineries and technological advancements in biomass conversion processes will make the product more commercially viable, accelerating their adoption.
   
• In Europe advanced biofuel market is likely to exceed USD 1.93 billion by 2034. Rising ambitious renewable energy targets under the Renewable Energy Directive (RED II), which aims for 32% of total energy consumption from renewable sources by 2030 will fuel the product penetration. Increasing prioritization of sustainable solutions by European consumers and companies will boost product demand.
   

Advanced Biofuel Market Share

• Top four players, including BP, Clariant, ExxonMobil and Gevo account for nearly 40% of the advanced biofuel industry. These businesses are heavily investing in R&D to improve biofuel production technologies. Advancements in enzyme technology, fermentation processes, and feedstock conversion are making biofuels more efficient and cost-effective.
   
• Moreover, key players are expanding their feedstock base to include non-food and waste-based materials. This reduces competition with food crops, ensures a sustainable supply of raw materials, and helps meet global sustainability targets. Companies are forming partnerships with biofuel startups, feedstock suppliers, and research institutions to secure raw materials and enhance production capabilities.
   

Advanced Biofuel Market Companies

• BP, a growing company in advanced biofuel industry, reported operating cash flow reached USD 27.3 billion in 2024. The company increased its dividend by 10% and executed USD 7 billion in share buybacks. In February 2024, BP Europe advocated for changes to the EU’s biofuel regulations, seeking to expand the list of crops classified as ‘advanced’ biofuels. The company aims to include more crop-based feedstocks in the EU’s definition, allowing their use in aviation as sustainable alternatives to fossil fuels.
   
• Exxon Mobil Corporation reported Q4 2024 earnings of USD 7.6 billion, equivalent to USD 1.72 per diluted share. The company generated USD 12.2 billion in operating cash flow, with free cash flow totaling USD 8.0 billion. ExxonMobil and Porsche are collaborating to test advanced biofuels and low carbon eFuels. Porsche's motorsports engines will use Esso Renewable Racing Fuel, first tested in the 2021 Porsche Mobil 1 Supercup. Initially, the fuel will be primarily advanced biofuels, with a shift to eFuel by 2022.
   

Advanced Biofuel Market Companies

Eminent players operating in the advanced biofuel industry are:

• Advanced Biofuel Solutions
• BP
• Clariant
• ExxonMobil
• Gevo
• GranBio
• Green Plains
• Iogen
• POET
• Solix Biofuels
   

Advanced Biofuel Industry News

• In August 2024, to align with recent biofuel advancements and attract more investment, the Union Cabinet approved modifications to the Pradhan Mantri JI-VAN Yojana (PMJY). The revised scheme extends the implementation timeline to 2028-29 and now includes advanced biofuels from lignocellulosic feedstocks such as agricultural residues, forestry waste, synthesis gas, and algae. The scheme will prioritize projects with new technologies and innovations to support multiple feedstocks and technologies.
   
• In July 2023, Indian Oil Corporation Limited (IOCL) and Praj Industries Limited signed a term sheet to enhance advanced biofuel production in India, as per a BSE filing by IOCL. The agreement covers multiple biofuels, including sustainable aviation fuel (SAF), ethanol, compressed biogas (CBG), biodiesel, and bio-bitumen.
   
• In April 2021, Clariant is partnering with Indonesia's Pertamina to evaluate the potential of advanced biofuels. They are exploring the use of Clariant's Sunliquid technology to convert regional feedstocks in Indonesia into cellulosic ethanol, an advanced biofuel.
   

This advanced biofuel market research report includes an in-depth coverage of the industry with estimates & forecast in terms of revenue and volume in “USD Million & MT” from 2021 to 2034, for the following segments:

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Market, By Fuel Type

• Cellulosic Ethanol
• Biodiesel
• Biobutanol
• Others  

Market, By Feedstock

• Agriculture
• Forestry
• Waste
• Others

Market, By Application

• Transportation
• Aviation
• Others

The above information has been provided for the following regions and countries:

• North America
  • U.S.
  • Canada
• Europe
  • Germany
  • France
  • Spain
  • UK
  • Italy
• Asia Pacific
  • China
  • India
  • Indonesia
  • Australia
• Middle East & Africa
  • Saudi Arabia
  • South Africa
• Latin America
  • Brazil
  • Argentina