Biofuels Market Size, Share, Trends and Report – 2034

Biofuels Market Outlook

According to the report by Expert Market Research (EMR), the global biofuels market reached a size of approximately 176.61 billion liters in 2024. Aided by the rising global demand for cleaner and renewable energy sources and the increasing initiatives towards reducing carbon emissions, the market is projected to grow at a CAGR of 4.50% between 2025 and 2034, attaining a volume of nearly 274.27 billion liters by 2034.

Biofuels, derived from renewable biological resources such as crops, agricultural residues, and waste materials, are gaining traction as substitutes for conventional fossil fuels. These fuels include ethanol, biodiesel, and advanced biofuels, which serve as sustainable alternatives in transportation, power generation, and industrial applications. The growing emphasis on decarbonisation, energy independence, and sustainability has positioned biofuels as a critical component of the global energy transition.

Biofuels Market Size

The global biofuels market has witnessed consistent growth, underpinned by rising consumption in both developed and emerging economies. In 2024, the market stood at 176.61 billion liters, highlighting its significant role in the global energy mix. With strong policy support, increasing research and development in advanced biofuel technologies, and greater adoption in the transportation and aviation sectors, the market is projected to expand steadily to 274.27 billion liters by 2034.

The scale of investment from both public and private stakeholders has further supported the development of production facilities, feedstock supply chains, and blending mandates, thereby driving overall market expansion.

Biofuels Market Share

Ethanol currently holds the largest share in the global biofuels market, particularly due to its extensive usage as a gasoline blend. Countries such as the United States and Brazil dominate ethanol production and consumption, accounting for a substantial portion of the global market. Biodiesel follows ethanol in terms of market share, driven by its widespread use in the European Union and Asia-Pacific.

Advanced biofuels, though currently representing a smaller market segment, are expected to capture a larger share during the forecast period, aided by growing investments in technologies that enable the use of non-food feedstock such as algae, municipal solid waste, and lignocellulosic biomass.

Geographically, North America and Latin America remain the key markets for biofuels, while Europe leads in the adoption of biodiesel. The Asia-Pacific region is also emerging as a fast-growing market, supported by rising energy demand and policy measures promoting renewable energy integration.

Biofuels Market Trends

Several key trends are shaping the growth of the global biofuels market:

• Adoption of Low-Carbon Fuels in Aviation: Sustainable aviation fuels (SAFs), a subset of advanced biofuels, are gaining global attention as airlines aim to achieve net-zero emissions targets by 2050.

• Second-Generation and Advanced Biofuels: There is a rising emphasis on biofuels derived from non-food crops, agricultural residues, and waste to address concerns around food security and land use.

• Global Policy Support: Governments worldwide are mandating higher biofuel blending levels with conventional fuels to reduce greenhouse gas emissions. For instance, India’s target to achieve 20% ethanol blending by 2030 is influencing global demand.

• Technological Integration: Advanced biorefineries are being developed to co-produce biofuels, biochemicals, and bioenergy, maximising feedstock utilisation.

• Green Financing and Investments: Increasing investments from venture capitalists, energy companies, and government agencies in biofuel technologies and infrastructure are accelerating industry expansion.

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Drivers of Growth

The global biofuels market is being propelled by several key drivers:

• Environmental Sustainability: With climate change at the forefront of global discussions, biofuels are being promoted as alternatives that reduce greenhouse gas emissions compared to fossil fuels.

• Energy Security: Biofuels offer countries a way to reduce dependence on crude oil imports, thereby enhancing energy independence.

• Rising Transportation Fuel Demand: With transportation accounting for a large share of global energy consumption, biofuels provide a renewable alternative that can be easily integrated into existing infrastructure.

• Government Incentives and Regulations: Subsidies, tax incentives, and mandatory blending targets are encouraging both production and consumption of biofuels.

• Technological Progress: Advances in feedstock development, enzyme engineering, and biorefining are making biofuel production more efficient and cost-effective.

Technology and Advancement

Technological innovations play a pivotal role in shaping the future of the biofuels industry. Advancements include:

• Cellulosic Ethanol Production: The development of technologies that can convert lignocellulosic biomass into ethanol is expanding the feedstock base beyond food crops.

• Algae-Based Biofuels: Microalgae cultivation is being explored for biodiesel and jet fuel production, given its high oil yield and minimal land requirements.

• Hydrotreated Vegetable Oils (HVOs): These next-generation biofuels are being utilised as drop-in fuels for diesel engines and aviation without requiring modifications.

• Integrated Biorefineries: Facilities designed to produce multiple outputs—such as biofuels, bioplastics, and electricity—are improving economic viability and reducing waste.

• Artificial Intelligence and Digitalisation: Predictive analytics and AI are being deployed to optimise feedstock supply chains and refinery operations.

Biofuels Market Segmentation

The market can be divided based on product, form, feedstock, application and region

Competitive landscape

Some of the major players explored in the report by expert market research are as follows:

• Archer Daniels Midland Company
• Shell Plc
• Wilmar International Ltd.
• Cargill, Incorporated
• Chevron Corporation
• BP Plc
• Green Plains Inc.
• Abengoa S.A.
• Gevo, Inc.
• POET, LLC
• Others

Challenges and Opportunities

Challenges:

• Feedstock Availability: Reliance on crops like sugarcane, corn, and soy raises concerns around land use and food security.

• High Production Costs: Advanced biofuels remain more expensive compared to conventional fuels.

• Infrastructure Limitations: Limited blending and distribution infrastructure pose logistical challenges in many regions.

• Market Volatility: Crude oil price fluctuations and inconsistent policy frameworks impact long-term investments.

Opportunities:

• Circular Economy Integration: Utilising agricultural waste, forestry residues, and municipal solid waste presents opportunities for sustainable biofuel production.

• Aviation Sector Demand: The rising adoption of SAFs presents a significant growth avenue.

• Emerging Markets: Rapid industrialisation and urbanisation in Asia and Africa create strong demand prospects for biofuels.

• Green Hydrogen Synergies: The integration of biofuels with hydrogen and carbon capture technologies can unlock new pathways for decarbonisation.

Biofuels Market Forecast

The global biofuels market is expected to witness steady expansion over the coming decade. From 176.61 billion liters in 2024, the market is projected to grow at a CAGR of 4.50%, reaching approximately 274.27 billion liters by 2034.

Growth will be particularly strong in regions implementing stringent emissions reduction targets and promoting renewable energy adoption. North America and Brazil will continue to dominate ethanol production, while Europe will sustain leadership in biodiesel. Meanwhile, Asia-Pacific will emerge as a critical growth hub, propelled by policy initiatives, increasing energy demand, and expanding automotive industries.

The industry’s future will depend heavily on the scalability of advanced biofuels and the commercialisation of cost-effective technologies. As energy diversification and decarbonisation remain global priorities, biofuels are set to play a critical role in the world’s transition to a low-carbon economy.

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