Advanced Biofuels Market
Report ID: SQMIG10D2050
Report ID: SQMIG10D2050
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Report ID:
SQMIG10D2050 |
Region:
Global |
Published Date: February, 2025
Pages:
197
|Tables:
93
|Figures:
71
Advanced Biofuels Market size was valued at USD 110.78 Billion in 2024 and is poised to grow from USD 123.29 Billion in 2025 to USD 290.34 Billion by 2033, growing at a CAGR of 11.3% during the forecast period (2026–2033).
One of the main drivers of the advanced biofuels market is the decarbonization transition in the aviation sector. The Sustainability Aviation Fuel (SAF) sourced from advanced biofuels would see fast uptake from all stakeholders in the industry due to policy incentives, technological advancement, and increased demand from commercial airlines due to increasing commitments from airlines and governments to net-zero emissions.
The global advanced biofuels market is on a growth path, fueled by rising concerns about emissions, the need for lowering greenhouse gases, and a global shift toward renewable energy sources. However, advanced biofuels are derived from non-food biomass sources such as agricultural wastes, forestry residues, algae, and municipal solid wastes, thus being a more sustainable and practical option among biofuels. These biofuels are of different types-examples being cellulosic ethanol, bio-based jet fuel, biodiesel, and renewable diesel-each vital in the decarbonization of transportation and industrial sectors.
A significant amount of money is being spent on R&D for improvised biofuel yields and optimized production processes. The promise of artificial intelligence (AI) and automation is reducing the costs and enhancing the operational efficiencies of biofuel production. Moreover, the global biofuel trade is being encouraged, as numerous countries are striving to keep diversified and stable biofuel supply chains to minimize reliance on fossil fuels. Several important developments are taking place in the industry such as an increase in the collaborative efforts among government, private, and research institutions to scale up biofuel infrastructures. Joint ventures and strategic alliances are now becoming common as companies partner with one another on an increasingly wider scale to leverage advanced technology and financing. These emergence and improvement in carbon credit markets and renewable fuel incentives open new windows of opportunities with high promises for biofuel producers.
Advanced biofuels have several major applications in the aviation sector, where Sustainable Aviation Fuel (SAF) is proving more attractive as international commitments for net-zero emissions gain momentum. Similarly, the maritime industry is currently studying biofuel blends in anticipation of forthcoming emission regulations. Both automobile manufacturers and logistics companies also include biofuels as a factor in their supply chains to reach carbon reduction targets. Increasing investments in R&D and strategic partnerships between biofuels producers, governments, and energy companies are expected to further business development. The ever-increasing consumer awareness and corporate sustainability objectives that impel the move towards low-carbon energy will fuel the expansion of the global advanced biofuels market in the near future.
In January 2024, TotalEnergies announced a significant investment to expand its Grandpuits biorefinery in France, enhancing its capacity to produce advanced biofuels, particularly Sustainable Aviation Fuel (SAF). This development is in line with both the climate targets of the European Union and the increased demand for SAF as airlines push decarbonization initiatives. The initiative is expected to strengthen Europe's biofuel supply chain over the next four or five years, support achieving carbon-neutrality in aviation and drive further investments into sustainable fuel technologies. TotalEnergies' initiative will, in essence, steer the global advanced biofuels market with increasing regulatory support and corporate sustainability commitments.
In February 2024, Neste, the global leader in renewable fuels, joined forces with Lufthansa to stimulate the uptake of Sustainable Aviation Fuel (SAF) on European flights. The agreement aims to significantly scale up SAF supply, reducing the aviation sector’s dependence on fossil fuels. This partnership aligns with global net-zero targets, as airlines accelerate their transition to sustainable fuel alternatives. Over the next 4–5 years, this collaboration is expected to drive policy incentives, increase commercial SAF production, and encourage other airlines to integrate biofuels, significantly lowering carbon emissions in air travel while setting a precedent for sustainable aviation.
In March 2024, BP and Bunge announced a significant expansion of their joint venture, BP Bunge Bioenergia, to increase bioethanol production in Brazil. The investment focuses on improving sugarcane-based ethanol yields and integrating carbon capture technologies. Over the next decade, this initiative will strengthen Brazil’s position as a global biofuel leader, reduce emissions in transport and industrial sectors, and promote large-scale adoption of advanced biofuels. In addition, the project will stimulate developments in renewable feedstocks and set new industry standards for the reduction of carbon intensity and for creating long-term economic and environmental benefits to the global advanced biofuels market.
In April 2024, Chevron announced a strategic partnership with Brightmark to scale up renewable diesel production using waste-to-fuel technology in the U.S. The initiative focuses on converting agricultural and plastic wastes into advanced biofuels within the framework of a circular economy. The project is anticipated to reduce landfill by the next 10 years, cut carbon emissions, and develop a new sustainable biofuel supply chain. Chevron and Brightmark use advanced bioconversion technologies to make waste-derived fuels a mainstream energy solution by shaping regulatory policies, increasing corporate investment in renewable energy, and accelerating the transition to a low-carbon economy.
Market snapshot - 2026-2033
Global Market Size
USD 99.53 billion
Largest Segment
Liquid Biofuel
Fastest Growth
Gaseous Biofuel
Growth Rate
11.3% CAGR
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Global Advanced Biofuels Market is segmented by Generation, Process, Fuel Type, Raw Material, End Use and region. Based on Generation, the market is segmented into Second Generation, Third Generation and Forth Generation. Based on Process, the market is segmented into Biochemical and Thermochemical. Based on Fuel Type, the market is segmented into Cellulosic Ethanol, Renewable Diesel, Biodiesel, BioDME, Biogas and Others. Based on Raw Material, the market is segmented into Jatropha, Camelina, Algae, Simple Lignocellulose, Complex Lignocellulose and Others. Based on End Use, the market is segmented into Transportation, Aviation and Other End Use. Based on region, the market is segmented into North America, Europe, Asia Pacific, Latin America and Middle East & Africa.
Analysis by Form
As per categorization by form, the market is classified as solid biofuel, liquid biofuel, and gaseous biofuel. Among these, liquid biofuel earned the largest share and continues to hold the dominant global advanced biofuels market share. Liquid biofuels such as biodiesel, renewable diesel, and ethanol continue to hold the dominant position in the global advanced biofuels market as they can be integrated into existing fuel infrastructure and are commonly used in transportation. Innovation on hydrotreated vegetable oil (HVO) and synthetic biofuels improves efficiency and sustainability. Advanced feedstocks include algae and waste oils that offer large-scale application opportunities. Strong mandates for regulations, carbon reduction objectives, and commitments from the airlines to Sustainable Aviation Fuel (SAF) are further driving the demand and ensuring that liquid biofuels still remain at the forefront of decarbonizing transport.
Gaseous biofuels, such as biomethane and renewable hydrogen, are set to be the fastest-growing segment in the global advanced biofuels market due to rising demand for clean energy solutions in transportation, power generation, and industrial applications. Government support for biogas and hydrogen is pursued through both increased carbon reduction policies and incentives. The anaerobic digestion, gasification, and carbon capture techniques have improved their performance in efficiency and scalability. With the existing infrastructure for natural gas, biomethane can easily be introduced into the market with low emissions. Furthermore, the push for hydrogen energy in fuel cells and large industries accelerates consumption making gaseous biofuels a key factor in the future energy transition.
Analysis by Product
Ethanol dominates the global advanced biofuels market due to its widespread adoption, government blending mandates, and compatibility with existing fuel infrastructure. Cellulosic ethanol originates from non-food biomass materials such as crop residues and urban organic waste rather than cultivated and harvested energy crops, which render it higher on the sustainability and efficiency gradients of biofuels. Advanced enzymatic hydrolysis and fermentation technologies are improving ethanol yields while reducing production costs. Growing demand for low-carbon fuels, particularly in the transportation sector, further supports ethanol’s leadership. With regulatory policies promoting higher ethanol blends and increasing investments in next-generation biofuels, ethanol continues to be the most scalable and commercially viable solution for reducing greenhouse gas emissions globally.
Wood pellets are poised to be the fastest-growing product in the global advanced biofuels market due to rising demand for renewable energy, carbon neutrality goals, and increasing adoption in power generation and industrial heating. From carbon reduction policies and subsidies legislated all around the world, the use of wood pellets has markedly increased for all the good reasons. Advances in pellet-making technology, improvements in combustion efficiency of the biomass energy supply chain, and sustainable forest management add to their desirability. The accelerated phase-out of coal pushes industries and utilities to switch to biomass solutions with wood pellets being a major player in energy transition and ensuring booming market growth in the coming decade.
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North America leads the global advanced biofuels market due to strong government policies, high investments, and an established biofuel infrastructure. In the U.S., Renewable Fuel Standard (RFS) programs dictate the promotion of ethanol and biodiesel use. More recently, demand for sustainable aviation fuel (SAF) and cellulosic biofuels have emerged as opposing forces strengthening the region's leadership.
The U.S. dominates due to its Renewable Fuel Standard (RFS) and Inflation Reduction Act, offering tax incentives for biofuel production. Alongside, this country is continuously progressing towards leading it towards the production of next-generation biofuels like SAF and renewable diesel with continuous innovations in feedstock technology, large-scale ethanol and biodiesel production, and increasing investments.
With enforcement of strict carbon reduction policies, the Renewable Energy Directive (RED II) by the EU and investment in sustainable aviation fuel (SAF) and renewable diesel, Europe is increasingly becoming a fast-growing region in the advanced biofuels market. Growing uptake in the transport and industrial sectors is also driving the biofuels market expansion.
Germany dominates Europe’s advanced biofuels market due to aggressive decarbonization policies, high investments in hydrogen-based biofuels, and strong automotive and aviation sector commitments. The country’s focus on synthetic fuels, biomethane, and second-generation biofuels ensures rapid market expansion, supported by government incentives and advanced research in sustainable fuel technologies.
Asia-Pacific is emerging as a key player in the global advanced biofuels market due to rapid industrialization, rising energy demand, and strong government policies promoting biofuel adoption. Policy changes in China, India, and Indonesia are encouraging investments in second-generation biofuels and waste-to-energy projects and in the advancement of sustainable aviation fuel (SAF). Supportive regulations, blending mandates, and increasing research in algae-based and cellulosic biofuels are driving regional growth, positioning Asia-Pacific as a major hub for biofuel innovation and production.
The Middle East and Africa are gradually entering the global advanced biofuels market, driven by rising energy diversification efforts and sustainable development goals. Biofuel projects in waste-to-energy and algae-based fuels are all part of a growing industry investment program by countries such as South Africa and the UAE. Renewable energy promotion initiatives by governments, in addition to plentiful biomass resources, will further foster the growth of markets. The region expects future growth in its biofuel production capabilities, which would come as demand for low-carbon fuels rises globally.
South America is a significant player in the global advanced biofuels market, led by Brazil’s dominance in ethanol and biodiesel production. The regional development is driven by strong government mandates, abundant agricultural resources, and policies that favor biofuels. Countries such as Argentina and Colombia have potential biofuel energy sources, biodiesel, and second-generation biofuels. Growing investments into sustainable aviation fuel (SAF) and biofuels from waste give the best market prospects to South America regarding innovation and export potential in biofuels.
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Advanced Biofuels Market Drivers
Government Policies and Renewable Energy Mandates
Rising Demand for Sustainable Aviation Fuel
Advanced Biofuels Market Restraints
Lack of Infrastructure and Distribution Networks
Competition from Electric Vehicles and Alternative Energy Sources
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Market forces operating in the global advanced biofuels market provide a stable platform for R&D, partnerships, and large-scale production investments of the key players. Market leaders include Neste Corporation, Chevron Corporation, BP, TotalEnergies, Shell, and POET LLC. These companies are into the production of sustainable aviation fuel (SAF), renewable diesel, and cellulosic ethanol. The extensive government mandates and advances in technology promote the growth of the market and encourage competition among energy majors and small-scale biofuel manufacturers to take leadership in the newly emerging renewable energy sector.
Top Player’s Company Profiles
Recent Developments
SkyQuest’s ABIRAW (Advanced Business Intelligence, Research & Analysis Wing) is our Business Information Services team that Collects, Collates, Correlates, and Analyses the Data collected by means of Primary Exploratory Research backed by robust Secondary Desk research.
As per SkyQuest analysis, the global advanced biofuels industry is poised for substantial expansion, driven by environmental regulations, corporate sustainability commitments, and technological innovations. The decarbonization of aviation and shipping industries is placing increasingly sustainable aviation fuels (SAF) and biofuel blends in the limelight for their commitment. Investment by the larger players in the realm of policy incentives is accelerating commercialization and infrastructure development.
Advanced production technologies, such as AI integration and carbon capture, further optimize efficiencies in the use of renewable energy. With the focus on energy security and carbon neutrality, a concerted collaboration between governments, corporations, and research institutions is necessary. With an increasing acceptance in transportation and industrial sectors, advanced biofuels will serve as a critical driver in the global energy transition and are thus also a vital link in the low-carbon economy.
| Report Metric | Details |
|---|---|
| Market size value in 2024 | USD 110.78 Billion |
| Market size value in 2033 | USD 290.34 Billion |
| Growth Rate | 11.3% |
| Base year | 2024 |
| Forecast period | 2026-2033 |
| Forecast Unit (Value) | USD Billion |
| Segments covered |
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| Regions covered | North America (US, Canada), Europe (Germany, France, United Kingdom, Italy, Spain, Rest of Europe), Asia Pacific (China, India, Japan, Rest of Asia-Pacific), Latin America (Brazil, Rest of Latin America), Middle East & Africa (South Africa, GCC Countries, Rest of MEA) |
| Companies covered |
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| Customization scope | Free report customization with purchase. Customization includes:-
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Table Of Content
Executive Summary
Market overview
Parent Market Analysis
Market overview
Market size
KEY MARKET INSIGHTS
COVID IMPACT
MARKET DYNAMICS & OUTLOOK
Market Size by Region
KEY COMPANY PROFILES
Methodology
For the Advanced Biofuels Market, our research methodology involved a mixture of primary and secondary data sources. Key steps involved in the research process are listed below:
1. Information Procurement: This stage involved the procurement of Market data or related information via primary and secondary sources. The various secondary sources used included various company websites, annual reports, trade databases, and paid databases such as Hoover's, Bloomberg Business, Factiva, and Avention. Our team did 45 primary interactions Globally which included several stakeholders such as manufacturers, customers, key opinion leaders, etc. Overall, information procurement was one of the most extensive stages in our research process.
2. Information Analysis: This step involved triangulation of data through bottom-up and top-down approaches to estimate and validate the total size and future estimate of the Advanced Biofuels Market.
3. Report Formulation: The final step entailed the placement of data points in appropriate Market spaces in an attempt to deduce viable conclusions.
4. Validation & Publishing: Validation is the most important step in the process. Validation & re-validation via an intricately designed process helped us finalize data points to be used for final calculations. The final Market estimates and forecasts were then aligned and sent to our panel of industry experts for validation of data. Once the validation was done the report was sent to our Quality Assurance team to ensure adherence to style guides, consistency & design.
Analyst Support
Customization Options
With the given market data, our dedicated team of analysts can offer you the following customization options are available for the Advanced Biofuels Market:
Product Analysis: Product matrix, which offers a detailed comparison of the product portfolio of companies.
Regional Analysis: Further analysis of the Advanced Biofuels Market for additional countries.
Competitive Analysis: Detailed analysis and profiling of additional Market players & comparative analysis of competitive products.
Go to Market Strategy: Find the high-growth channels to invest your marketing efforts and increase your customer base.
Innovation Mapping: Identify racial solutions and innovation, connected to deep ecosystems of innovators, start-ups, academics, and strategic partners.
Category Intelligence: Customized intelligence that is relevant to their supply Markets will enable them to make smarter sourcing decisions and improve their category management.
Public Company Transcript Analysis: To improve the investment performance by generating new alpha and making better-informed decisions.
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