Transportation Biofuel Market Size - By Fuel Type (Biodiesel, Ethanol), Feedstock (Coarse Grain, Sugar Crop, Vegetable Oil) & Forecast, 2023 - 2032

Transportation Biofuel Market Size

Transportation Biofuel Market was valued at USD 76.9 billion in 2023 and is anticipated to grow at 7.5% CAGR between 2024 and 2032, driven by the rising demand for environmentally friendly fuels in road transportation. Heightened awareness of renewable energy utilization and a growing emphasis on reducing greenhouse gas emissions are also key factors contributing to this expansion. Governments are playing an active role in reducing reliance on traditional fuels due to their environmental impact, and investment plans to develop biofuels as a major energy source are further shaping the industry landscape.
 

The market is poised for growth as feedstock diversity expands, accompanied by a rise in initiatives for advanced biofuels. The industry is undergoing a notable shift towards embracing a broader array of feedstocks beyond traditional sources like corn and sugarcane. Non-food feedstocks such as algae, waste cooking oil, and agricultural residues are gaining prominence, aiming to mitigate competition with food crops and enhance sustainability. In addition, there is a growing emphasis on advanced biofuels like cellulosic ethanol and renewable diesel, reflecting a noteworthy trend. These advanced biofuels offer higher energy efficiency and contribute to reduced greenhouse gas emissions compared to first-generation biofuels.
 

The increasing focus from consumers and regulatory bodies on sustainability and carbon reduction is fueling the demand for certified sustainable biofuels. Certifications such as RSB (Roundtable on Sustainable Biomaterials) and ISCC (International Sustainability & Carbon Certification) have gained significance, contributing to the market's growth. Moreover, continuous research and development initiatives are resulting in more efficient and cost-effective biofuel production processes. Innovations in enzyme technology and biorefinery approaches are enhancing yields and reducing production costs, reflecting advancements in the field.
 

COVID- 19 Impact

The COVID-19 pandemic had a substantial impact on the transportation biofuel market, primarily driven by reduced demand for transportation fuels as lockdowns and travel restrictions curtailed economic activity. Despite these short-term challenges, the pandemic underscored the importance of sustainability, potentially encouraging investments in biofuels as part of a green recovery strategy.
 

Transportation Biofuel Market Trends

Increasing focus on Sustainable Aviation Fuels (SAFs) coupled with favorable government support in product adoption is anticipated to stimulate the market growth. Growing interest in advanced biofuels like cellulosic ethanol and renewable diesel, which offer improved efficiency and lower greenhouse gas emissions will further influence the market growth. In addition, government regulations and incentives continue to shape the market dynamics, with many countries implementing mandates and subsidies to promote the adoption of biofuels in transportation. Feedstock options are expanding, incorporating non-food sources such as algae, waste oils, and agricultural residues, contributing to feedstock diversity and sustainability.
 

The transportation biofuel market is influenced by international trade dynamics, where exports and imports respond to market demand, trade agreements, and global economic factors. Ongoing technological innovations, including advancements in enzyme technology and biorefinery approaches, are enhancing yields and cost-effectiveness. In addition, consumer awareness and preferences are driving a demand for eco-friendly and sustainable transportation solutions, aligning with the broader goal of reducing environmental impact in the global transportation sector.
 

Transportation Biofuel Market Analysis

Based on fuel type, the ethanol fuel gained a highest market share in the year 2022 and is set to attain about 7.4% CAGR through 2032. Shift towards higher ethanol blends coupled with increasing interest in cellulosic ethanol will complement the business scenario over the projected timeline.
 

• Ethanol is increasingly used as a feedstock for producing alcohol-to-jet (ATJ) fuels, supporting the aviation industry's efforts to reduce its carbon footprint and transition to more sustainable aviation fuels.
   
• Government policies and regulations continued to play a pivotal role in promoting the use of ethanol as a biofuel. Renewable fuel standards and mandates encouraged the blending of ethanol into transportation fuels.
   
• The potential applications of ethanol extended beyond transportation, with research exploring its use in industrial processes, chemicals production, and even as a hydrogen source in fuel cell.
   
• A shift toward diverse feedstocks, including non-food sources including algae and waste materials, is becoming common, as a result, this diversification aimed to reduce the environmental impact and compete less with food crops.

The vegetable oil feedstock segment is likely to showcase 7.8% growth rate from 2024 to 2032. The biofuel industry is undergoing a transition marked by a diversification of feedstocks. While vegetable oils like soybean oil and palm oil have traditionally served as primary sources, there is a rising interest in exploring non-food feedstocks such as algae, waste cooking oils, and agricultural residues. This shift aims to diminish competition with food crops and elevate sustainability standards, thereby contributing to the transportation biofuel market growth.
 

• Research and development efforts are focused on producing advanced biofuels, including renewable diesel and renewable jet fuel, from vegetable oils. These advanced biofuels offered higher energy efficiency and reduced greenhouse gas emissions compared to first-generation biofuels.
   
• Biofuels produced from vegetable oils continued to find opportunities in emerging markets where there was a focus on reducing greenhouse gas emissions and ensuring energy security.
• Vegetable oil feedstocks are considered to produce sustainable aviation fuels (SAF), as the aviation industry aimed to reduce its carbon emissions.
   
• The industry explored the use of waste vegetable oils from restaurants and food processing as a source for biofuel production, aligning with the principles of the circular economy.

The North America transportation biofuel market will grow at a CAGR of over 7.4% through 2032. The U.S. Environmental Protection Agency (EPA) continued to implement the Renewable Fuel Standard (RFS), which mandated the blending of biofuels into the nation's transportation fuel supply. The RFS set specific targets for advanced biofuels, driving demand for their production. In addition, government policies and incentives at the federal and state levels continued to promote the use of biofuels, such as tax credits and renewable energy standards. These policies aimed to boost biofuel adoption and production.
 

• Biodiesel, particularly renewable diesel, saw growing production and consumption. Renewable diesel, derived from feedstocks like vegetable oils and animal fats, was gaining popularity due to its reduced carbon footprint.
   
• The industry placed greater emphasis on sustainability, including the responsible sourcing of feedstocks and reducing the environmental impact of biofuel production.
   
• North America's biofuel industry sought opportunities in emerging markets and industries like aviation and marine transportation, where biofuels are being explored as a sustainable fuel source.
   
• Increased consumer awareness of environmental and sustainability issues influenced biofuel demand and purchasing decisions. Biofuel producers responded by promoting the environmental benefits of their products.
   

Transportation Biofuel Market Share

The transportation biofuel industry is marked by both established global players and regional companies. Public-private partnerships and collaborations between research institutions, government agencies, and biofuel companies played a role in advancing the industry's research and development efforts.  In addition, competition is driving innovation and efficiency, benefiting customers in terms of better technology and competitive pricing across the application segment:
 

Transportation Biofuel Market Companies

• Chevron Corporation
• Neste
• Wilmar International Ltd
• BTG International Ltd
• Cargill
• VERBIO AG
• Borregaard AS
• POET, LLC
• ADM
• My Eco Energy
• FutureFuel Corporation
• Münzer Bioindustrie GmbH
• The Andersons, Inc.
• GreenJoules
• CropEnergies AG
• UPM
• CLARIANT
• TotalEnergies
• Praj Industries
• COFCO
   

Transportation Biofuel Market News

• In September 2023, the government of India decided to invest over 900 million through India Oil Company in the 2G (second generation) ethanol space. The investment is an attempt towards adopting cleaner energy sources, thereby minimizing greenhouse gas emissions.
   
• In November 2022, United Airlines Ventures (UAV) announced a strategic investment in NEXT Renewable Fuels (NEXT) for permitting a biofuel refinery in Port Westward, Oregon, with expected production beginning in 2026. NEXT's primary facility offers a strategically advantageous position and valuable assets for the distribution of biofuel across the West Coast. This could potentially enhance United Airlines' supply of sustainable aviation fuel.
   

This transportation biofuel market research report includes in-depth coverage of the industry with estimates & forecast in terms of ‘Mtoe’ & USD Million’ from 2019 to 2032, for the following segments:

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Market, By Fuel Type

• Biodiesel
• Ethanol
• Others

Market, By Feedstock

• Coarse Grain
• Sugar Crop
• Vegetable Oil
• Others

The above information has been provided for the following countries across the regions.

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