Biofuel Market Size – By Fuel, By Feedstock, By Application, Analysis, Share, Growth Forecast, 2025 – 2034

Biofuel Market Size

The global biofuel market was valued at USD 145.3 billion in 2024 and is estimated to grow at a CAGR of 10.7% from 2025 to 2034. Effort towards adoption low-carbon energy intensive solutions coupled with increasing concern towards sustainability efforts is fueling the industry growth. Biofuels is becoming to aid in the decarbonization of other sectors including emissions from transportation vehicles, electrical energy generation, and industrial manufacturing of various products, thus fostering its incorporation into the global energy market.
 

The increasing needs for environmental protection alongside swift adoption of sustainability initiatives by companies is forming a suitable market environment across the globe. The transportation and logistics sector has been quick to adopt biofuels owing to the increasing pressure faced by the automobile industries in cutting their carbon emissions and continuing sustainability, which in turn is fostering the industry growth. Biofuels are cost effective emission cutting medium, as the product is combined with existing fuels in place of buying new equipment. Additionally, biofuels are a sustainable CSR solution, which allows them to survive in an environmentally conscious market, catering to a persistent market share.
 

Biofuel Market Trends

Increasing energy security concerns and the existence of extensive environmental regulations, various industries are beginning to employ the use of biofuels for energy applications. Governments across the globe are taking steps to curb the greenhouse gas (GHG) emissions and this has resulted in an increase in the demand for biofuels. Biofuels are environmentally friendly compared to fossil fuels and thus fulfill the need for governmental regulations. Europe has implemented regulations regarding the use of fuels by vehicles which has for a considerable market for biofuels, in turn increasing the product consumption.
 

Increased use of biofuels and their blend together with the new technologies in biofuel production is transforming the overall energy-based industries. Due to the wide variety of biofuel blends such as ethanol and alcohol fuel, they are becoming preferred choices and are being used with internal combustion engines. For governments and companies these are an easy way to change from one energy source to the other as there are no major tax implications involved with changing the infrastructure, thus allowing for gradual reductions in carbon emissions om promotion of these unconventional fuels.
 

Biofuel Market Analysis

The ethanol market is projected to surpass USD 206 billion by 2034. The increased consumption of ethanol across the globe along with the blended fuel demand has rose due to government policies towards emissions reduction. Gasoline consumption across transportation sector has witnessed growth with ethanol’s blend proportion upwards as the government and industries have been encouraging reduction in GHG emissions caused by former fuel sources. Additionally, the biotechnologies for cellulosic ethanol made principally from non-food crops, including agricultural residuals and grasses are gaining attention. By meeting the core objectives of much environmental policy making, cellulosic ethanol helps to mitigate the impact of climate change and thereby add to the growth of ethanol production.
 

The coarse grain feedstock market will grow at a CAGR of over 10.5% by 2034. Ethanol is primarily made from coarse grains and the remain largest for the production across the globe. The growth in the consumption of renewable fuel blends resulted in increased production of corn ethanol, pushed by biofuel policies including the RFS. Corn-based ethanol production is becoming an increasingly affordable feedstock due to enhanced agricultural technology that is raising yields and lowering costs. Additionally, distillers’ grains, which are produced as ethanol byproducts, are ideal for animal feed, as a result, the economic attractiveness of corn-based ethanol plants is increasing, thereby spurring the feedstock market.
 

The U.S. biofuel market will exceed over USD 149 billion by 2034. The market is anticipated to grow owing to federal regulations such as the Renewable Fuel Standard (RFS) which encourages cultivation of ethanol and biodiesel nationwide. Ethanol which is largely derived from corn remains the largest portion of the market owing to its prevalent use in E10 and E15 fuels. The consumption of renewable diesel is also rising owing to the favorable state policies, for instance, the Californian Low Carbon Fuel Policy (LCFP), promoting the product adoption. In addition, the country has strictly dedicated to reducing carbon emissions in the transportation sector hence the growth in investment in cellulosic and other advanced biofuels will augment the business scenario in the country.
 

The Asia Pacific region is one of the fastest growing markets for biofuel owing to increasing energy consumption across China and India which arw mass producing ethanol to limit the amount of oil they need to import in order to cut down on air pollution. This region is also on the forefront of biodiesel production given the sheer number of palm oil resources in Indonesia. Additionally, the region is focusing on advanced biofuels to develop novel feedstock for biodiesel. The entire region of Asia Pacific is expected to rapidly grow for biofuel production which is primarily driven by government regulation and blending orders.
 

Biofuel Market Share

The biofuel industry presents a captivating spectacle, owing to a combination of established companies, startups, and strong government and corporate cooperation and partnerships. Immense production potential and strong distribution networks are brought in by the market players including Neste, Cargill, Archer Daniels Midland (ADM) and others. These key players are currently active in investing in advanced biofuel technologies, such as hydrotreated vegetable oil (HVO) and cellulosic ethanol, in order to meet the fast-growing demand for cleaner fuels.
 

Biofuel Market Companies

Major players operating in the biofuel industry are:

• ADM
• Borregaard
• BTG Bioliquids
• Cargill
• Chevron
• Clariant
• COFCO
• CropEnergies
• FutureFuel
• Munzer Bioindustrie
• My Eco Energy
• Neste
• POET
• Praj Industries
• The Andersons
• TotalEnergies
• UPM
• Verbio
• Wilmar International
• Zilor
   

Biofuel Industry News

• agreement for the development of 60,000 tons of Sustainable Aviation Fuel. This would assist Air Canada in accomplishing its goal of targeting the decreasing of carbon pollution of the airline from its operations contributing to the airline’s carbon targets for the aviation industry. This also marks an important milestone in advancing the development of greener aviation technologies supporting the commitments of both companies to be environmentally friendly.
   
• In October 2024, Terviva, a biofuel manufacturing company received an investment from Chevron to increase the utilization of the company’s production plants with biofuels produced from Pongamia trees. The partnership intends to expand the planting of Pongamia, a leguminous tree whose seeds are oily and have the potential to be converted into biodiesel, These plans are known to be enhanced by the company through the use of the funding that the company is being provided with as a way of enhancing the functionalities of the business by getting commercial growth with respect to biodiesel as a form of energy.
   

This biofuel market research report includes in-depth coverage of the industry with estimates & forecast in terms of volume (MToe) and revenue (USD Billion) from 2021 to 2034, for the following segments:

Market, By Fuel

• Biodiesel
• Ethanol
• Others

Market, By Feedstock

• Coarse Grain
• Sugar Crop
• Vegetable Oil
• Others

Market, By Application

• Transportation
• Aviation
• Others

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

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