Biofuels Market Size to Exceed USD 326.42 Bn by 2034 Growing Need for Clean Energy is Driving Biofuels Adoption
The global biofuels market size is predicted to increase from USD 110.9 billion in 2025 and is anticipated to be worth around USD 326.42 billion by 2034, expanding at a CAGR of 11.4% from 2025 to 2034. A study published by Statifacts a sister firm of Precedence Research.
Ottawa, July 02, 2025 (GLOBE NEWSWIRE) -- According to Statifacts, the global biofuels market size was evaluated at USD 110.9 billion in 2024 and is estimated to attain USD 326.42 billion by 2034, growing at a CAGR of 11.4% during the forecast period from 2025 to 2034. Government initiatives for favorable regulatory measures and research endeavors, growing dependence on greenhouse gas emissions, and rising popularity as an eco-friendly fuel for road transportation are driving the growth of the market.
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Biofuels Market Overview
The biofuels market refers to the production, distribution, and application of biofuels, which are liquid fuels produced from renewable biological sources, including plants and algae. Biofuels offer a solution to one of the challenges of wind, solar, and other alternative energy sources. Biofuels are fuels derived directly or indirectly from biomass. Biofuel benefits include supporting agriculture, rural development, reducing greenhouse gases, low pollution, economic stimulation, efficiency, renewable energy, low emissions, energy security, and reducing foreign oil dependence.
The biofuels market growth is driven by government initiatives for suitable regulatory measures & research endeavors, growing dependence on reducing greenhouse gas emissions, rising demand for eco-friendly fuel for road transportation, and technological advancements. There is no emission of hazardous gases like sulfur dioxide (SO) and carbon monoxide (CO). By using biofuels instead of fossil fuels, there is only the emission of non-toxic materials, which reduces the risk of cancer and breathing problems in human beings.
Biofuels Market Highlights
- North America dominated the global market with the largest market share in 2024.
- Asia Pacific is estimated to expand the fastest CAGR between 2025 and 2034.
- By fuel type, the bioethanol segment accounted for a considerable share of 72.1% in 2024.
- By feedstock, the vegetable oil segment registered its dominance over the global market share of 27.7% in 2024.
Major Trends in the Biofuels Market
What Is the Market Trend for Biofuels Market?
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Government initiative for suitable regulatory measures: The government policy on biofuels encourages the setting up of a supply chain mechanism for biodiesel production from short gestation crops, used cooking oil, and non-edible oilseeds. The roles and responsibilities of all the concerned departments or ministers concerning biofuels have been captured in the policy document to synergise efforts. India aims to achieve 20% ethanol blending with petrol by 2025-26, largely achieved through 1G ethanol from sugar cane and food grains. Global governments are offering a variety of incentives and enacting regulations to promote biofuel adoption.
https://www.pib.gov.in/Pressreleaseshare.aspx?PRID=1532265
https://vajiramandravi.com/upsc-exam/biofuels/
https://advancebiofuel.in/government-policies-boosting-biofuels/
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Technological advancements: Technological advancements in the biofuel industry, electro-fuels, which is a spark-ignited revolution in green hydrogen, synthetic biology designing the future molecules of green energy, waste-to-energy transforming trash into transportable fuel, and algae to oils, a green option, reshaping energy policies. Along with satisfying basic energy requirements, they reduce greenhouse gas emissions, provide energy security, and support regional development. The latest advancements in biofuels include advancements in enzyme technology, fermentation improvement, and the creation of integrated biorefineries capable of producing many streams of biofuel and bioproducts. Technological advancements promote the production and processing of biofuels.
http://www.worldbioenergy.org/uploads/Factsheet%20-%20Advanced%20Biofuels.pdf
https://www.sandipfoundation.org/blog/recent-trends-in-biofuels/
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Is Biofuel a Growing Industry?
Yes, the biofuel industry is a growing one due to increasing research and development undertakings by both research institutions and biotechnology companies alike, along with high demand for cleaner fuels, pushed by the global switch to more sustainable and renewable energy forms.
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Regulatory support: Regulatory support for biofuels adoption, renewable fuel standards (RFS) create a stable and predictable market for biofuel manufacturers, the actuality furnished with the aid of government mandates fosters greater funding in biofuel technologies and infrastructure, and by using biofuels, the RFS allows less harmful emissions, contributing to international climate dreams.
Government Policies Driving Biofuel Growth | Advance Biofuel
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Rising demand: Rising demand for biofuels is contributing to the growth of the biofuels market. Biofuels are green fuels in that they do not contribute to the carbon dioxide (CO2) burden. Biofuel is biodegradable and non-toxic. Unlike renewable diesel, petroleum diesel is derived from a non-renewable resource that will not run out.
https://www.targray.com/biofuels/advantages
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Growing dependence on reducing greenhouse gas emissions: Due to compatibility with the natural carbon cycle, bio-fuels offer the most beneficial alternative for reducing greenhouse gases from the transportation sector. The benefits of reducing greenhouse gas emissions' impacts on the world include a cut in consumption, regulatory compliance, enhanced stakeholder relations, enhanced external relations, cost savings, slowed climate change, economic growth, and air quality. Replacing fossil fuels with biofuels has the potential to reduce some undesirable environmental impacts of fossil fuel production and use, including conventional & greenhouse gas (GHG) pollutant emissions, exhaustible resource depletion, and dependence on unstable foreign suppliers.
https://www.epa.gov/risk/biofuels-and-environment
Role of Artificial Intelligence (AI) in the Biofuels Market
Artificial intelligence (AI) role in biofuels provides an emerging and significant convergence in the relationship between advanced technology and energy produced from renewable sources. Many aspects of biofuel production are transformed by AI’s data analytics, modelling & prediction abilities, and machine learning, from maximizing biomass utilization and increasing fuel production to improving methods of production and providing the preservation of the environment. AI in biofuels is used for improving biofuel production, such as adjusting irrigation and fertilizer usage to increase yield, conversion process, such as temperature adjusting, and improving pressure levels to improve the efficiency of biofuels.
An AI-driven system can improve every stage, helping farmers to grow better feedstocks, enhancing production methods, ensuring fuel quality, and even reducing environmental impacts through smart assessments.
What are the Significant Achievements of the Leading Industrial Firms?
- According to a report published in September 2024, Petroleum Minister Hardeep S Puri Highlighted India’s Bioenergy Progress at India Bio-Energy and Tech Expo 2024. Ethanol blending percentage surges from 1.53% in 2014 to 15% in 2024. E100 fuel launched at over 400 retail outlets nationwide. Puri urges the transport minister, Gadkari, to promote the production of E-100-compatible vehicles.
Press Release: Press Information Bureau
- In May 2025, a landmark achievement in its efforts to deliver clean, locally sourced biofuels in Africa was announced by Jord, the Swedish renewable energy company. The Municipal Council of Sakar, located in Senegal’s Sedhiou region, has allocated 300 hectares of land to Jord Africa. This allocation is part of a larger 1000-hectare plan that signals a strong commitment from both the company and local authorities to transform underutilized land into a hub for clean energy production.
Jord launches Senegal biofuel project with 300 hectare land allocation - GreentechLead
How Does IoT Act as an Opportunity for the Biofuels Market?
The Internet of Things (IoT) in the energy sector presents a significant opportunity in the biofuels market, enhancing the operational efficiency, reliability, and sustainability of energy systems. It also helps integrate renewable energy sources, ensure better supply-demand response, and use energy more efficiently. For renewable energy sources, production levels fluctuate based on weather patterns and environmental conditions. IoT devices help to mitigate this variability by offering real-time monitoring and control. IoT technology improves the efficiency of smart grids by collecting real-time data on energy usage and grid performance. This information enables utilities to balance supply and demand effectively, integrate renewable energy solutions, and allow dynamic pricing models.
The main purpose of IoT is to connect a multitude of devices and objects to the internet. This connectivity allows these devices to collect, share, and analyze information in real time. This IoT is a critical part of the technological development that is paving the way for a sustainable future. By integrating with renewable energy, environmental compliance, smart cities, waste management, agriculture, and energy management, IoT is having a deep impact on the health of our planet.
https://appinventiv.com/blog/iot-in-energy-management/
https://sensgreen.com/iot-sustainability-6-key-insights/
Limitations and Challenges in the Biofuels Market
What are the Potential Concerns Related to the Biofuels Market?
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Engine compatibility issues: The problems with biofuel engines include biodiesel may contain some ‘unconverted’ vegetable oil (incomplete processing), traces of chemicals from the making of the biodiesel can remain in the biodiesel. The engine either refuses to start in cold weather or runs only for a few seconds after starting. Biofuels are considered environmentally friendly; their increased water content and oxygen can cause corrosion and damage to fuel system components. Deposits and clogging because of biodiesel have been widely reported, but are generally traceable to biodiesel that is either of low quality or has become oxidized.
Using Biodiesel Fuel in Your Engine
https://extension.psu.edu/using-biodiesel-fuel-in-your-engine
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High production costs: The cost of biofuel production is influenced by many factors, like feedstock selection, labor and land costs, the oil market, and agricultural subsidies. Technological advancements like CELF and advanced enzymatic hydrolysis drive efficiency and cost-effectiveness. The costs of biofuels mainly depend on labor and land costs, feedstock, oil market, and agricultural subsidies. Biofuels are more expensive than petrol. With the current price hikes in many of the feedstocks used for biofuels like cereals, vegetable oils used cooking oil, and animal fats, the price difference to fossil fuels is becoming ever larger.
https://www.transportenvironment.org/articles/biofuels-are-twice-as-expensive-as-fossil-fuels
How Did North America Dominate the Biofuels Market in 2025?
North America dominated the global biofuels market in 2025. Growing initiatives for suitable regulatory measures & research endeavors, growing dependence on reducing greenhouse gas emissions, and increasing popularity as an eco-friendly fuel for road transportation are driving the growth of the market in the North American region.
How Do Biofuels Act as a Key to the Future of Renewable Energy in the United States?
The United States holds the fourth-largest global refining capacity and ranks as the seventh-largest exporter of refined petroleum products. The United States is the leading biofuel producer in the World. According to a report published in July 2024 by IEA Bioenergy on biofuels production and development in the United States, the U.S. biofuel production capacity rose to 23.8 billion gallons per year (BGPY) in 2023, a growth of over 1.7 billion gallons compared to 2022. Ethanol production has reached 17.8 BGPY since 2023, while biodiesel production capacity stands at 2.1 BGPY, and renewable diesel capacity is now 3.9 BGPY.
Biofuels production and development in the United States – Bioenergy
What To Expect from Asia Pacific’s Biofuel Market?
Asia Pacific is anticipated to grow at the fastest rate in the market during the forecast period. Trend towards contactless interactions, the healthcare sector’s expansion, growing adoption of cloud technology, and increasing demand for automation in appointment management are contributing to the biofuels market in the Asia Pacific region.
How Do Biofuels Act as a Key to the Biofuels Market in India?
The main source of biofuel is ethanol, which is primarily produced from sugarcane. Overall, ethanol from sugarcane remains the main source of biofuel used in India. In March 2025, according to the Minister of Petroleum and Natural Gas, India has emerged as the world’s third-largest biofuel producer. India has achieved 19.6% ethanol blending in petrol as of January and is on track to reach 20%, five years ahead of its original 2030 target.
https://buyofuel.com/blogs/what-is-the-main-source-of-biofuel-used-in-india/
https://www.nextias.com/ca/current-affairs/07-03-2025/india-3rd-largest-biofuel-producer
Biofuels Market Scope
| Report Attribute | Key Statistics |
| Market Size in 2025 | USD 141 Billion |
| Market Size by 2034 | USD 257.6 Billion |
| Growth Rate from 2025 to 2034 | CAGR of 6.9% |
| Largest Market | North America |
| Fastest Growing Market | Asia Pacific |
| Base Year | 2024 |
| Forecast Period | 2025 to 2034 |
| Segments Covered | By Fuel Type, By Feedstock, and By Region |
| Regions Covered | North America, Europe, Asia-Pacific, Latin America, and Middle East & Africa |
Biofuels Market Segmentation
Fuel Type Insights
Biofuels Market Size by Fuel Type 2024 to 2034 (USD Million)
| Segment | 2024 | 2025 | 2034 |
| Biodiesel | 37,031.4 | 39,802.5 | 79,377.0 |
| Ethanol | 95,103.4 | 1,01,201.1 | 1,78,224.2 |
What Made Bioethanol the Dominant Segment in the Biofuels Market in 2024?
The bioethanol segment underwent notable growth in the market during 2024. Bioethanol is a fuel made from plant material like sugarcane or corn. It is produced by fermenting the sugars in the plants with yeast to produce ethanol and carbon dioxide. Bioethanol can be used in many ways, including producing ethanol-based fuel spray to clean industrial equipment and fuel in vehicles modified to run on it. Benefits of bioethanol include reducing air pollution, reducing dependence on crude oil, helping to reduce greenhouse gas emissions, mitigating global warming, and more.
Bioethanol | Definition, Production Process, Uses, & Benefits
The biodiesel fuel type segment is expected to grow at the fastest rate in the market during the forecast period of 2025 to 2034. Using biodiesel fuel as a vehicle fuel improves public health and the environment, as it provides safety benefits and contributes to a resilient transport system. Biodiesel in its pure, unblended form causes far less damage than petroleum diesel if released or spilled to the environment.
https://afdc.energy.gov/fuels/biodiesel-benefits
Feedstock Insights
Biofuels Market Size by Feedstock 2024 to 2034 (USD Million)
| Segments | 2024 | 2025 | 2034 |
| Coarse Grains | 35,999.2 | 38,125.4 | 65,589.2 |
| Non-agri Feedstock | 11,729.8 | 12,703.4 | 25,817.6 |
| Biomass | 8,834.2 | 9,555.0 | 19,247.6 |
| Vegetable oil | 36,565.5 | 38,889.8 | 69,228.6 |
| Sugar crop | 22,300.6 | 23,729.9 | 42,407.4 |
| Jatropha | 3,688.4 | 4,248.2 | 12,133.9 |
| Others | 13,017.2 | 13,751.9 | 23,176.9 |
How the Vegetable Oil Segment Dominated the Biofuels Market in 2024?
The vegetable oil segment enjoyed a prominent position in the market during 2024. Vegetable oils are used as a substitute for fossil fuels. Vegetable oils are the basis of biodiesel, which can be used like conventional diesel. Biodiesel is produced from vegetable oil by transesterification, a process that converts fats and oils into biodiesel and glycerin. Recycled used vegetable oil is used to produce renewable fuels, which are clean and therefore help minimize pollution. Carbon dioxide emissions are reduced when substituting traditional fuels with renewable fuels.
https://mahoneyes.com/benefits-of-recycling-used-cooking-oil/
The jatropha segment is projected to experience the highest growth rate in the market between 2025 and 2034. Benefits of jatropha as a biofuel include its resilience to harsh environmental conditions, adaptability to marginal lands, and ability to produce high yields of oil-rich seeds, making it a valuable resource for addressing the global energy crisis. The oil extracted from jatropha seeds can be converted into biodiesel, a renewable fuel alternative to fossil fuels.
https://ijpjournal.com/bft-article/a-comprehensive-overview-on-jatropha-curcas-linn/
Browse More Research Reports:
- The global biogas market size accounted for USD 43,055 million in 2024 and is expected to exceed around USD 94,688 million by 2034, growing at a CAGR of 8.2% from 2024 to 2034.
- The global bioethanol market size was estimated at USD 86.5 billion in 2024 and is projected to be worth around USD 124.16 billion by 2034, growing at a CAGR of 3.68% from 2025 to 2034.
- The global fuel storage tank market size accounted for USD 15,400 million in 2024 and is expected to exceed around USD 24,610 million by 2034, growing at a CAGR of 4.8% from 2024 to 2034.
- The global gasoline fuel additives market size was USD 214.15 million in 2023, calculated at USD 226.14 million in 2024 and is expected to reach around USD 389.96 million by 2034, expanding at a CAGR of 5.6% from 2024 to 2034.
- The global octane improver fuel additives market size was USD 98 million in 2023, calculated at USD 103.49 million in 2024 and is expected to reach around USD 178.46 million by 2034, expanding at a CAGR of 5.6% from 2024 to 2034.
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Competitive Landscape in the Biofuels Market
- BTG International Ltd.: This company is an international specialist healthcare company that is developing and commercializing products targeting critical care, cancer, and other disorders.
- Renewable Energy Group, Inc.: This company is a leader in the biofuels industry, providing lower-carbon fuel solutions to fleets.
- Abengoa Bioenergy S.A.: This company is a global leader in the development of new industrial biotechnologies and debuts an advanced biorefinery for cellulosic ethanol in Southwest Kansas.
- Cargill: Cargill is committed to providing food, ingredients, agricultural solutions, and industrial products to nourish the world in a safe, responsible, and sustainable way.
- DowDuPont, Inc.: It is a leader in Agriculture and Specialty Products, combining the complementary portfolios, resources, and capabilities of heritage Dow and DuPont.
- Wilmar International Ltd: Wilmar International Ltd's business activities include oil palm cultivation, edible oils refining, oilseeds crushing, consumer-packaged edible oils processing and merchandising, specialty fats, oleochemicals, biodiesel manufacturing, gains processing and merchandising, and sugar milling and refining.
- POET, LLC: This is a US biofuel company that specializes in the creation of bioethanol.
- Archer Daniels Midland Company: They are a global leader in human and animal nutrition and the world’s premier agricultural organization and processing company.
- VERBIO Vereinigte BioEnergie AG: They produce biofuels and chemical products from rapeseed oil, rye, wheat, triticale, maize, and straw.
- My Eco Energy: They specialize in creating renewable fuel solutions and green energy innovations.
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China Clean Energy Inc.: This is a biodiesel and specialty chemical producer operating in the People’s Republic of China and selling products both domestically and worldwide.
What Are the Latest Advancements in Biofuels?
- In May 2025, the forthcoming release of BioxiGuard, Japan’s first antioxidant specially developed for marine biodiesel fuel (‘biofuel’), was announced by an NYK Group Company specializing in chemical R&D as well as the manufacture and sale of chemical products, Nippon Yuka Kogyo Co., Ltd.
NYK Group Company Launches Japan’s First Antioxidant for Marine Biodiesel Fuel | NYK Line
- In April 2025, ‘Scheme for Implementation of Biofuel Projects in Madhya Pradesh’, under the Madhya Pradesh Renewable Energy Policy, 2025, was officially launched by the Madhya Pradesh Government in a significant move towards a sustainable future.
Segments Covered in the Report
By Fuel Type
- Biodiesel
- Bioethanol
By Feedstock
- Coarse Grain
- Non-agri Feedstock
- Biomass
- Vegetable Oil
- Sugar Crop
- Jatropha
- Others
By Geography
- North America
- U.S.
- Canada
- Europe
- Germany
- France
- United Kingdom
- Rest of Europe
- Asia Pacific
- China
- Japan
- India
- Southeast Asia
- Rest of Asia Pacific
- Latin America
- Brazil
- Rest of Latin America
- Middle East & Africa (MEA)
- GCC
- North Africa
- South Africa
- Rest of Middle East & Africa
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