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

  • Report ID: GMI7043
  • Published Date: Oct 2023
  • Report Format: PDF

Biofuel Market Size

Biofuel Market was valued at USD 167.2 billion in 2022 and is set to grow at a 6.6% CAGR between 2023 and 2032. Increased demand for eco-friendly fuels in road transportation along with heightened awareness of renewable energy utilization, and a growing emphasis on reducing greenhouse gas emissions are significant factors propelling the market growth. For instance, in January 2023, The U.S. Department of Energy (DOE) unveiled a USD 118 million funding initiative supporting 17 projects aimed at expediting the production of eco-friendly biofuels to meet the transportation and manufacturing demands of the United States.

Biofuel Market

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Expanding feedstock diversity along with increasing advanced biofuel initiatives will favor the biofuel market growth. The industry is witnessing a shift toward a more diverse range of feedstocks in addition to traditional sources including corn and sugarcane, non-food feedstocks such as algae, waste cooking oil, and agricultural residues were gaining prominence. This diversification aimed to reduce competition with food crops and improve sustainability. In addition, increasing focus on advanced biofuels, such as cellulosic ethanol and renewable diesel, is witnessing an increasing notable trend where the product offer higher energy efficiency and reduced greenhouse gas emissions compared to first-generation biofuels.

Growing consumer and regulatory emphasis on sustainability and carbon reduction is driving the demand for certified sustainable biofuels. Certifications like RSB (Roundtable on Sustainable Biomaterials) and ISCC (International Sustainability & Carbon Certification) gained importance, in turn adding growth prospects to the market. In addition, ongoing research and development efforts are leading to more efficient and cost-effective biofuel production processes. Innovations in enzyme technology and biorefinery approaches were improving yields and lowering production costs.

COVID- 19 Impact

The COVID-19 pandemic had a substantial impact on the biofuel industry, 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.

Biofuel Market Trends

The global biofuel industry is expected to observe substantial growth, driven by the emergence of new applications that offer lucrative opportunities for key industry players. Biofuels are poised to become a cost-effective and dependable source of jet fuel, owing to innovative production methods developed by biofuel researchers and scientists. These methods facilitate the efficient conversion of biomass into jet fuel, opening up new avenues for the biofuel industry. In addition, the implementation of carbon pricing mechanisms, such as carbon taxes and cap-and-trade systems, created economic incentives for businesses to reduce carbon emissions, which further promoted biofuels adoption.

The biofuel sector has seen significant cost reductions due to technological advancements, making it a compelling alternative to fossil fuels owing to the introduction of novel feedstock sources for biofuel production, in turn anticipated to bolster the industry's growth. Moreover, a growing emphasis on the circular economy and waste-to-energy approaches is contributing to the use of biofuels produced from organic waste materials, thereby complementing the business scenario.

Biofuel Market Analysis

 Biofuel Market Size, By Fuel Type, 2021 - 2032 (USD Billion)

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Based on fuel type, the ethanol fuel dominated highest market share in the year 2022 and is likely to showcase 6.2% growth rate up to 2032. Shift towards higher ethanol blends coupled with increasing interest in cellulosic ethanol will complement the business scenario.

  • 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.
 Biofuel Market Revenue Share, By Feedstock, 2022

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Based on feedstock, the vegetable oil feedstock is slated to register around 6.5% growth through 2032. The biofuel market an experiencing a shift toward the diversification of feedstocks where vegetable oil, such as soybean oil and palm oil, are traditional sources, there was growing interest in using non-food feedstocks, like algae, waste cooking oils, and agricultural residues. This diversification aimed to reduce competition with food crops and enhance sustainability, thereby fueling the 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.
North America Biofuel Market Size, 2021 - 2032 (USD Billion)

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The North America biofuel market is estimated to witness 6.2% CAGR 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.

Biofuel Market Share

The 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:

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

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 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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By Fuel Type

  • Biodiesel
  • Ethanol
  • Others

By Feedstock

  • Coarse Grain
  • Sugar Crop
  • Vegetable Oil
  • Others

By Application

  • Transportation
  • Aviation
  • Others

The above information has been provided for the following regions 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


Authors: Ankit Gupta, Shashank Sisodia

Frequently Asked Questions (FAQ) :

The market valuation of biofuel was worth USD 167.2 billion in 2022 and is set to grow at a rate of over 6.6% through 2032, backed by the increased demand for eco-friendly fuels in road transportation.

Vegetable oil feedstock is slated to register at a 6.5% CAGR through 2032. Vegetable oil feedstocks are considered to produce sustainable aviation fuels (SAF), fulfilling the aviation industry’s aim to reduce carbon emissions.

North America biofuel market is estimated to observe 6.2% growth rate up to 2032, as the U.S. Environmental Protection Agency (EPA) continues to implement the Renewable Fuel Standard (RFS), which mandates the blending of biofuels into the nation's transportation fuel supply.

Chevron Corporation, Neste, Wilmar International Ltd., BTG International Ltd, Cargill, VERBIO AG, Borregaard AS, and POET, LLC among others.

Biofuel Market Scope

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Premium Report Details

  • Base Year: 2022
  • Companies covered: 20
  • Tables & Figures: 610
  • Countries covered: 20
  • Pages: 450
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