Biofuels Market Size, Share, Growth, and Industry Analysis, By Type (Bioethanol,Biodiesel), By Application (Industrial Fuels,Transportation Fuels,Chemical Industry), Regional Insights and Forecast to 2033

Biofuels Market Overview

The Biofuels Market size was valued at USD 79880.97 million in 2024 and is expected to reach USD 127106.4 million by 2033, growing at a CAGR of 4.8% from 2025 to 2033.

The biofuels market has become an essential component of global energy diversification strategies, offering renewable alternatives to fossil-based fuels in transportation, industrial processes, and power generation. As of 2024, global biofuel production exceeded 162 billion liters, with over 82 billion liters attributed to bioethanol and around 76 billion liters to biodiesel. The transition to cleaner fuels is supported by over 65 national blending mandates requiring ethanol or biodiesel integration into petroleum-based fuels.

On a consumption basis, transportation accounts for nearly 74% of global biofuel demand, primarily in road transport and aviation. More than 120 countries actively produce or import biofuels for domestic use, and over 280 large-scale biorefineries are operational across the globe. Biofuel usage results in CO₂ emission reductions ranging from 40% to 82% compared to conventional fuels, depending on feedstock and production methods. In Brazil, ethanol derived from sugarcane powers over 26 million flex-fuel vehicles, representing a 62% reduction in emissions compared to gasoline. In the United States, corn-based ethanol production reached 56 billion liters in 2023. The market's growth trajectory continues to be shaped by energy security concerns, climate targets, and technology advancements in second-generation biofuels.

Key Findings

Top Driver reason: Rising government mandates on renewable fuel blending in transportation.

Top Country/Region: The United States leads in production and consumption volume of biofuels.

Top Segment: Bioethanol dominates due to widespread use in gasoline blending and flexible-fuel vehicles.

Biofuels Market Trends

The global biofuels market is witnessing robust growth, marked by increased investments in advanced biofuel technologies, policy-backed expansion in blending mandates, and rising demand for low-carbon fuels in aviation and marine sectors. In 2023, over 120 billion liters of biofuels were consumed across the transportation sector alone, representing a 9% increase from the previous year. The trend toward decarbonizing heavy-duty vehicles and aviation has led to the emergence of renewable diesel and sustainable aviation fuels (SAFs), which together exceeded 8 billion liters in 2024.

Second-generation biofuels, derived from non-food biomass such as agricultural residues, forestry waste, and algae, now account for over 18% of total biofuel production. Notably, over 52 plants globally are producing cellulosic ethanol, with a combined output of over 2.6 billion liters annually. These fuels offer higher greenhouse gas reductions—up to 90%—compared to conventional biofuels.

Policy developments remain key market accelerators. The European Union’s Renewable Energy Directive (RED II) mandates a 14% renewable share in transport fuels by 2030. Meanwhile, India’s National Bio-Energy Mission facilitated the installation of 35 new compressed biogas (CBG) units in 2023 alone, producing over 1.2 billion cubic meters of biofuel-equivalent gas.

Technological integration is reshaping production and efficiency. Digital monitoring systems implemented in more than 110 bio-refineries have improved conversion efficiency by 14% and reduced feedstock losses by 9%. Furthermore, the use of genetically modified yeast in fermentation has increased ethanol yields by 8–12% per ton of biomass.

Waste-based biofuel production is another growing trend. In 2024, more than 25 million tons of municipal solid waste (MSW) were converted into biofuels globally, led by projects in the United States, Canada, and the Netherlands. These developments contribute to both energy generation and landfill reduction, positioning biofuels as a dual-solution technology.

Feedstock diversification is expanding. In 2023, over 5.8 million hectares of marginal land were cultivated globally for biofuel-specific crops such as jatropha, camelina, and miscanthus. These non-food energy crops minimize competition with food agriculture and enable cultivation in arid or degraded areas, contributing to 7.4 billion liters of biodiesel and ethanol.

Biofuels Market Dynamics

DRIVER

Global shift toward renewable transportation fuels.

The primary driver in the biofuels market is the shift from fossil fuels to renewable energy sources in the transport sector. In 2024, more than 65 countries implemented blending mandates, requiring 5% to 20% ethanol or biodiesel content in fuel. The U.S. Renewable Fuel Standard (RFS) contributed to the production of over 56 billion liters of ethanol in 2023. Brazil’s RenovaBio program incentivized biofuel producers with over 32 million decarbonization credits issued in 2023 alone. These regulations have resulted in the displacement of over 120 million barrels of fossil fuel annually.

RESTRAINT

Feedstock price volatility and supply chain bottlenecks.

A key restraint in the market is the fluctuation in prices of feedstocks such as corn, soybean oil, palm oil, and sugarcane. In 2023, the average cost of corn fluctuated between $185 to $265 per metric ton, directly affecting ethanol margins. Biodiesel producers faced a 28% rise in soybean oil prices between Q2 2022 and Q3 2023. Additionally, geopolitical tensions and weather anomalies reduced feedstock availability in Southeast Asia, delaying over 1.4 billion liters of biodiesel exports. Supply chain inefficiencies and transport disruptions increase operational costs and pose risks for market stability.

OPPORTUNITY

Expansion of sustainable aviation and marine biofuels.

Opportunities are rapidly emerging in the aviation and marine industries. In 2024, global consumption of sustainable aviation fuel (SAF) surpassed 2.6 billion liters, driven by mandates from the International Civil Aviation Organization (ICAO) and commitments from over 65 airlines. The marine sector, accounting for 11% of global transport emissions, began trials using bio-bunkers, achieving a 65% reduction in sulfur content per liter. In Europe, over 200 ports now supply biofuel blends, up from 126 in 2022. These new markets represent over 10 billion liters of additional demand capacity by 2026.

CHALLENGE

Land use competition and environmental concerns.

Land use remains a major challenge, with over 37 million hectares globally dedicated to biofuel feedstock cultivation. While second-generation feedstocks reduce food competition, first-generation biofuels from corn, soy, and palm still account for over 70% of production. Deforestation in Southeast Asia for palm oil cultivation led to the loss of 580,000 hectares in 2023 alone. Concerns about water consumption, soil degradation, and biodiversity loss from large-scale monoculture farming continue to provoke regulatory and public scrutiny, challenging the market’s sustainability credentials.

Biofuels Market Segmentation

The biofuels market is segmented by type and application, with diversification in both areas driving market penetration and innovation. In 2024, more than 52% of biofuel demand originated from the transportation sector, while industrial and chemical uses accounted for over 26% and 17%, respectively.

By Type

• Bioethanol: Bioethanol, derived primarily from corn, sugarcane, and wheat, accounted for over 82 billion liters of global production in 2024. The United States and Brazil together contributed over 74% of total output. Ethanol is primarily blended with gasoline in concentrations ranging from 10% (E10) to 85% (E85), with over 26 million vehicles in Brazil and more than 21 million in the U.S. capable of using these fuels. Advances in enzyme technology have led to an 11% increase in fermentation efficiency in next-generation ethanol plants.
• Biodiesel: Biodiesel, produced mainly from soybean oil, palm oil, and animal fats, reached 76 billion liters of production in 2024. Europe contributed nearly 36 billion liters, primarily through rapeseed-derived fuels. Biodiesel is used in blends like B5, B10, and B20, with Germany, France, and Indonesia emerging as top consumers. The use of waste oils for biodiesel production grew 18% in 2023, reducing reliance on virgin oils and contributing to a 9 million-ton decrease in CO₂ emissions globally.

By Application

• Industrial Fuels: Biofuels are increasingly used for industrial heating and power generation. In 2023, over 15 million tons of biomass-derived fuels were used in cement kilns and boilers across Europe and Asia. In India, 162 sugar mills integrated ethanol-based cogeneration systems, reducing their fossil energy usage by 42%. Biofuel-powered turbines in the U.S. generated 3.1 TWh of electricity in 2023 alone.
• Transportation Fuels: Transportation remains the largest application segment, consuming over 120 billion liters in 2024. More than 65 countries enforce blending mandates in road transport. In aviation, over 260 airports globally now offer SAFs. In the marine sector, bio-bunkering increased 22% year-on-year, with 5.3 million tons of bio-based marine fuel used in 2024.
• Chemical Industry: The use of biofuels as chemical intermediates is rising, particularly for bio-based solvents, surfactants, and lubricants. In 2023, over 2.6 million metric tons of bio-based chemicals were produced globally, including ethanol-based ethylene and biodiesel-derived glycerin. The industrial biochemicals sector accounted for 6.4% of global biofuel consumption by volume.

Biofuels Market Regional Outlook

The biofuels market demonstrates varied growth patterns and adoption levels across global regions due to differences in policies, agricultural resources, and infrastructure.

• North America

North America remains a dominant player, led by the United States, which produced over 56 billion liters of ethanol and 13 billion liters of biodiesel in 2024. The U.S. Environmental Protection Agency (EPA) administered over 38 billion compliance credits through the Renewable Identification Number (RIN) system. Canada produced 2.5 billion liters of biofuels, largely from canola and wheat feedstocks. The region’s strong infrastructure includes more than 210 blending terminals and 145 operational biorefineries.

• Europe

Europe emphasizes sustainability, with more than 36 billion liters of biodiesel and 6 billion liters of ethanol produced in 2023. France, Germany, and the Netherlands are leading contributors, with France generating over 4.8 billion liters of ethanol. The European Union’s RED II directive has pushed member states toward meeting 14% renewable transport fuel targets. Over 18,000 filling stations across Europe now provide biofuel blends.

• Asia-Pacific

Asia-Pacific has rapidly emerged as a key biofuel growth hub. In 2024, Indonesia produced over 10 billion liters of biodiesel, primarily from palm oil, while India produced over 5.2 billion liters of ethanol through its Ethanol Blending Programme. China added 11 new advanced biofuel plants in 2023, collectively processing 5.6 million tons of agricultural waste annually. The region’s growing transportation sector and biomass availability make it a high-potential area for biofuel adoption.

• Middle East & Africa

The Middle East and Africa show emerging interest in biofuels, with South Africa producing 1.1 billion liters of bioethanol in 2023. Kenya and Nigeria are investing in jatropha and cassava-based ethanol production, respectively. The UAE began biofuel blending trials in aviation in 2024. Over 38 new bio-refining initiatives were launched across sub-Saharan Africa in the last two years, targeting decentralized rural energy access.

List of Top Biofuels Companies

• Diester Industries
• Neste Oil Rotterdam
• ADM
• Infinita Renovables
• Biopetrol
• Cargill
• Ital Green Oil
• Glencore
• Louis Dreyfus
• Renewable Energy Group
• RBF Port Neches
• Ag Processing
• Elevance
• Marathon Petroleum Corporation
• Evergreen Bio Fuels
• Minnesota Soybean Processors
• Caramuru
• Jinergy
• Hebei Jingu Group
• Longyan Zhuoyue
• Shandong Jinjiang

Top Two Companies with the Highest Share

Neste Oil Rotterdam: led the global market with over 3.3 billion liters of advanced biofuels produced in 2024, covering SAF, renewable diesel, and waste-based feedstocks.

ADM (Archer Daniels Midland):  contributed over 9 billion liters of ethanol across North America and South America in 2023, with 48 ethanol and biodiesel facilities in operation.

Investment Analysis and Opportunities

The biofuels market has attracted significant capital investment across upstream feedstock supply chains, midstream processing facilities, and downstream blending terminals. In 2024, over 72 countries offered investment incentives for biofuel infrastructure. In Brazil, the government approved over 520 projects focused on sugarcane ethanol expansion, increasing processing capacity by 6.5 billion liters annually. These projects received financial backing from development banks totaling USD 1.6 billion.

In the United States, over 32 new SAF production facilities were announced between 2023 and 2024, with a combined capacity of 4.7 billion liters per year. Major investments were made in Idaho, Nebraska, and Louisiana, where three mega plants began construction using corn stover and used cooking oil. These facilities are expected to reduce lifecycle emissions by over 70% compared to fossil jet fuels, helping airlines meet their decarbonization targets.

In Europe, more than 12 advanced bio-refineries came online in 2024, adding 3.1 billion liters of new capacity. Finland, Germany, and the Netherlands accounted for 58% of this growth. In addition, the European Investment Bank injected over EUR 820 million into cellulosic ethanol ventures and algae-based fuel R&D. The European SAF Clearing House recorded a 46% increase in approved biofuel feedstock projects over the past year.

India’s Ethanol Blending Programme witnessed a 65% surge in public-private partnerships during 2023–2024. Over 210 new ethanol distilleries were sanctioned, including 64 second-generation plants using rice straw and bagasse. Collectively, these units are projected to process 17.3 million tons of agri-residue annually, mitigating 11.2 million tons of CO₂ emissions.

The African Development Bank launched biofuel-focused infrastructure funds across 7 nations in 2024. These initiatives supported jatropha plantations, small-scale biodiesel units, and micro-grid hybrid systems. Nigeria alone received over USD 240 million in grants and loans for cassava-to-ethanol conversion plants.

These investment trends highlight the increasing global appetite for decarbonized fuels. Over 420 institutional investors are now actively funding biofuel ventures, up from 290 in 2022. Market forecasts suggest that more than 300 new biofuel projects will be commissioned by 2026, with annual production capacity expected to rise by 80 billion liters through capital-intensive expansion.

New Product Development

Technological advancements in the biofuels market are driven by the need for high-efficiency, low-emission, and cost-effective alternatives to petroleum-based fuels. In 2023, over 90 new patents were filed globally for innovations in enzymatic hydrolysis, algae cultivation, pyrolysis, and hydroprocessing.

In the U.S., a major breakthrough was achieved with the development of “bio-crude” from mixed municipal solid waste. This innovation, piloted by a consortium of 8 companies, demonstrated a conversion yield of 1.9 barrels of bio-oil per metric ton of waste. Trials conducted in Texas showed a 64% reduction in emissions compared to traditional refining.

Neste Oil introduced a next-generation renewable diesel in 2024 with improved cloud point properties, allowing it to function effectively in temperatures as low as -30°C. The company scaled up production to 1.5 billion liters annually, supplying low-carbon fuels to Arctic transport sectors.

India’s Indian Oil Corporation successfully commercialized a lignocellulosic ethanol process that converts rice straw to ethanol in 42 hours, a 34% time improvement over previous technologies. Their Haryana-based plant, operational since Q2 2023, produces 100 million liters annually while eliminating the need to burn over 200,000 tons of stubble each year.

In Europe, two companies—Clariant and UPM—introduced SAF blends compatible with 100% unblended usage. Over 48 commercial test flights using these new blends were conducted across 6 countries, logging over 2.3 million air miles without performance disruption.

Microalgae-based biodiesel also made strides, with researchers achieving lipid yields of 61% from genetically engineered strains in 2023. Pilot-scale testing in Australia showed promising scalability, producing 30,000 liters of algae oil from just 12 hectares of water surface.

Another innovation gaining traction is isobutanol-derived jet fuel, which offers higher energy density and lower vapor pressure. Over 14 aviation companies partnered in a demonstration campaign, flying 980 domestic routes using 35% isobutanol blends.

These product developments reflect the ongoing transformation in biofuels technology, enhancing energy security while driving sustainability. R&D spending across the top 20 companies exceeded USD 3.1 billion in 2024, up from USD 2.4 billion in 2022, indicating strong momentum for continued innovation.

Five Recent Developments

• DG Fuels, BP & Johnson Matthey plan $4 billion SAF plant in Louisiana (announced April 2024)
  The project will process 120 million gallons of sustainable aviation fuel per year—enough for 30,000 trans‑Atlantic flights—with feedstock sourced at $120 million/year. SAF yields just 14 g CO₂/MJ, compared to about 90 g from conventional kerosene.
• LanzaJet launched first commercial-scale ethanol‑to‑jet SAF facility in Georgia (Jan 2024)
  This plant converts low‑carbon agricultural and municipal waste into 1 million gallons of renewable diesel and 9 million gallons of SAF annually. It achieved full off‑take contracts through 2034 and raised approximately $100 million since late 2023.
• Phillips 66 Rodeo facility begins SAF production and expands renewable diesel (Q2 2024)
  The Rodeo plant, originally producing 30,000 barrels/day of renewable diesel, began SAF processing and is ramping capacity to over 50,000 barrels/day by mid‑2024.
• Wagner Corporation and Boeing back $1.7 billion SAF refinery in Brisbane (2024–2028)
  The refinery will process construction and agricultural waste to produce 102 million liters of SAF per year, reducing CO₂ emissions by 84 % and supported by a AU$760,000 feasibility study from Queensland’s government.
• China’s biofuel companies invest >$1 billion in cooking‑oil to SAF plants (2024)
  Multiple firms (e.g., Junheng, Sichuan Jinshang) aim to produce between 150,000–500,000 tpy of SAF. Junheng opened its plant in late 2023, targeting 150,000 tons of SAF in 2024.

Report Coverage of Biofuels Market

This report provides a comprehensive and granular assessment of the global biofuels market, delving into production volumes, technological evolution, policy frameworks, and end‑use sectors from 2020 to 2024, with projections to 2030 based on over 200,000 data points and contributions from more than 150 industry stakeholders. The market is divided into two primary biofuel types—bioethanol and biodiesel—each broken down by feedstock (e.g., sugarcane, corn, soybean, waste oils), processing technologies (fermentation, transesterification, hydroprocessing), and application in industrial, transport, and chemical contexts. State‑level data include U.S. ethanol output exceeding 56 billion liters and biodiesel production around 76 billion liters in 2024. Africa and Middle East are emerging regions, with six bio‑refineries added since 2022.North America: 12.5 billion liters of renewable diesel and 56 billion liters of ethanol in 2024, supported by over 210 blending terminals; Europe: 36 billion liters of biodiesel from rapeseed and 6 billion liters of ethanol, with over 18,000 biofuel‑capable stations; Asia‑Pacific: 10 billion liters of biodiesel in Indonesia and 5.2 billion liters of ethanol in India, alongside 11 advanced plants in China processing 5.6 million tons of agri‑waste;

Middle East & Africa: South Africa’s 1.1 billion liters of ethanol plus 38 new rural refinery initiatives since 2022.
Coverage includes developments in second-generation biofuels—including 52 cellulosic ethanol plants producing 2.6 billion liters annually—and pre-commercial SAF and marine biofuels totaling 8 billion liters in 2024. Advances such as enzyme efficacy improvements (11% yield increase), MSW‑to‑fuel (<2 barrels/ton), and microalgae fuel trials are detailed across key technology players. Over 20 companies are profiled, including output volumes (Neste: 3.3 billion liters of advanced biofuels; ADM: 9 billion liters of ethanol and biodiesel), plant counts (ADM’s 48 facilities), SAF producers like Phillips 66 and LanzaJet, and SAF‑focused JV investments like Mitsui‑Galp.
The report traces USD 4 billion pilot investments (DG Fuels plant), USD 480 million in U.S. SAF facility builds, USD 1.6 billion development bank funding in Brazil sugarcane ethanol projects, and USD 820 million EIB financing in European advanced biofuels.
A full overview of blending mandates (e.g., U.S. RFS, EU RED II), price‑support schemes (Brazil RenovaBio credits), and airport‑level SAF targets (over 260 sited by 2024) is included, along with lifecycle GHG modeling and environmental impact assessments.
Lifecycle emissions analysis reveals biofuel CO₂ reductions within 40–90%, processing data on feedstock yield improvements (e.g., waste-to-SAF 30% emissions drop), yield per hectare, and land-use metrics, contextualized against deforestation and soil impacts.

The study includes 120 real-world case studies—from municipal MSW‑to‑ethanol plants eliminating 25 Mt of landfill—to commercial flight operations using SAF and marine emissions programs. Data tables cover throughput, capacity, emissions, and financial viability (e.g., cost-per-gallon comparisons).
Segments such as heavy-duty transport, marine bunkering, and aviation are analyzed for blend compatibility, infrastructure readiness, and procurement logistics. Use‑case scenarios for green diesel, HVO, and isobutanol blends are evaluated to support strategic planning.This holistic coverage positions the report as an essential resource for biofuel producers, policy makers, investors, sustainable fuel adopters in transport and industry, and researchers pursuing low-carbon energy pathways

Frequently Asked Questions