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

Transportation Biofuel Market Size

The global transportation biofuel market was valued at USD 101.9 billion in 2024 and is estimated to grow at a CAGR of 10.7% from 2025 to 2034. The rise in the concern for eco-friendly energy sources as well as the commitment to reducing carbon emissions in the transportation sector are major factors driving the growth of the market. This, alongside the development of second and third generation biofuels and improvements in biofuel production practices, enhances yield efficiencies and tackles food security and resource competition.
 

The biofuel market is experiencing the adoption of emerging technologies in the diversification such as the inclusion of agricultural residues, algae and waste oils which assists in building a circular economy. The blending of biofuels with traditional fuels enables the use of pre-existing biofuel infrastructure easing the adoption of biofuels in modern vehicles.
 

Transportation Biofuel Market Trends

Efforts towards achieving net-zero emissions are enhancing private sector financial backing and corporations’ willingness, which in turn facilitates biofuel commercialization, especially in the sustainable aviation transport, marine transport, and heavy-duty industries. More collaboration between biofuel producers and motor vehicle manufacturers is aiding the market penetration by developing vehicles.
 

The market is witnessing a shifting focus on scalability by expanding production with modular technologies and decentralized biorefineries. There is also increased demand, elevated consumer awareness, willingness to adopt greener alternatives and strategic partnerships which aid in fostering innovation enhancing market access. Traditional approaches are also fostered with the adoption of life cycle assessment or sustainability certification frameworks Which will enhance trust in biofuel products.
 

Transportation Biofuel Market Analysis

The ethanol market will cross USD 191 billion by 2034. This growth could be attributed to the rise in ethanol effectively combines fuels and rigorous government policies to emission reduction. The blending of gasoline with ethanol is being favored as the government and industries try to reduce the GHG emissions from the burning of fossil fuels. Moreover, ethanol feedstock is being increasingly used in the manufacturing of alcohol to jet (ATJ) fuels, which contributes to the objectives of the aviation sector to lessen its carbon emissions and adopt appropriate sustainable aviation fuel strategies.
 

The coarse grain feedstock market is expected to expand at a rate of more than 10.5% from 2025 to 2034. The ethanol industry relies heavily on corn being one of the leading coarse grains, making it the primary feedstock of ethanol production. This need is accompanied by the Renewable Fuel Blends Policy which intends to replace fossil fuels with renewable fuels. The policy has the Renewable Fuel Standard (RFS) has also played a part in this growth. Advanced technological innovations in agriculture have improved the output of crops and reduced the cost of production, establishing which brings ethanol as a cheaper feedstock for Coarse grains.
 

U.S. transportation biofuels market is projected to cross USD 98 billion by 2034. The growth is fueled by federal policies including the Renewable Fuel Standard (RFS), which mandates more ethanol or biodiesel consumption. Produced from corn, ethanol is the major product and is extensively used in E10 and E15 fuel blends. At the same time, renewable diesel production is picking up steam due to state policies like California's Low Carbon Fuel Standard (LCFS). Additionally, there is an increasing investment on advanced transportation biofuels including cellulosic ethanol as net-zero emissions goal on the transport sector becomes more achievable.
 

Higher adoption of biofuels for transportation is also being boosted by accelerated industrialization, urbanization, and energy consumption in the Asia Pacific region. Nations including China and India are increasing ethanol output to reduce oil imports and combat air pollution. The region is also strengthening its position as a major biodiesel producer owing to palm oil's widespread availability in Indonesia. The strengthening efforts to develop next generation biofuels for greater sustainability compared to traditional feedstock is further bolstering the market outlook. The supportive government policies and blending mandates are why the Asia Pacific region is anticipated to be a major market for the future growth of transportation biofuels.
 

Transportation Biofuel Market Share

The biofuel market for transportation is quite active shaped by a mix of existing industrial operators, pioneering entrepreneurs, and strong partnerships between governments and businesses. These players include top companies including Neste, Cargill, and Archer Daniels Midland (ADM) that utilize their large production volumes and distribution channels to stay competitive in the market. These firms have put long term investment strategies into action which focus on developing new technologies associated with advanced biofuel production, particularly HVO and cellulosic ethanol, to satisfy the increased demand for environmentally friendly fuels.
 

Transportation Biofuel Market Companies

Major players operating in the transportation 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
   

Transportation Biofuel Industry News

• In November 2024, Neste entered into a contract with air Canada to supply 60,000 tons of Sustainable Aviation Fuel (SAF). The agreement is intended to assist Air Canada with their carbon reduction measures while keeping with the airline’s decarbonization objectives for the aviation business. This collaboration is a crucial step forward in enabling the industry transition to more environmentally friendly aviation practices and demonstrates the commitment both companies have towards sustainability.
   
• In October 2024, Montana Renewables received a conditional commitment from the Department of Energy's Loan Programs Office for a loan guarantee of 1.44 billion US dollars. The funding will be utilized for the construction of a renewable fuels manufacturing plant meant to produce SAF, renewable diesel and other sustainable products, making a positive contribution to the renewable fuel economy of the country.
   

This transportation 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

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