Liquid Biofuels Market By Product Type (Bioethanol, Biodiesel, Renewable Diesel, Green Jet Fuel, Others), By Feedstock (Sugar Crops, Starch Crops, Vegetable Oils, Animal Fats, Algae, Lignocellulosic Biomass, Waste Oils and Greases, Others), By Process (Fermentation, Transesterification, Pyrolysis, Gasification, Hydrothermal Liquefaction, Others), By Application (Transportation Fuel, Power Generation, Thermal Heating, Others), By End-User (Transportation, Power Generation, Industrial, Residential, Others), Global Market Size, Segmental analysis, Regional Overview, Company share analysis, Leading Company Profiles and Market Forecast, 2025 – 2035

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Industry Outlook

The Liquid Biofuels Market accounted for USD 163.24 Billion in 2024 and USD 174.23 Billion in 2025 is expected to reach USD 334.18 Billion by 2035, growing at a CAGR of around 6.73% between 2025 and 2035. Liquid biofuels are produced from biological sources through chemical, biological, or thermal processes. Many liquid biofuels are produced from crop materials, agricultural waste or algae and are mainly used to replace fossil fuels in engines and for industry. Most of these fuels are either bioethanol which comes from sugar or corn or biodiesel, made from oils or fats found in animals. Across the globe, people are choosing more liquid biofuels as they become more concerned about the environment, fuel prices rise and the need for cleaner energy increases. Government entities and energy providers are now spending more on developing biofuels and their associated infrastructure to curb carbon emissions and the use of crude oil. Since sustainability is more important today, attention to liquid biofuels is also increasing, due to the help of innovations and changes in government policies worldwide.

Industry Experts Opinion

“We must make use of all available climate-friendly technologies to attain our climate goals in the transport sector. That is enormously important, as not every transport application can be electrified or made efficiently climate-neutral in some other manner. The BMDV views renewable fuels as an important part of the technology mix of the future.”

• DE Oliver Luksic – Parliamentary State Secretary, Federal Ministry for Digital and Transport

Report Scope:

Market Dynamics

Rising global demand for cleaner, renewable energy sources is pushing governments and industries to adopt liquid biofuels as a sustainable alternative to fossil fuels.

Governments and corporations worldwide are increasingly selecting liquid biofuels over conventional fossil fuels as more people demand cleaner energy. Countries around the world are under pressure to reduce their carbon emissions and achieve their sustainability targets as a result of growing awareness of pollution and climate change. Liquid biofuels sourced from crops, algae and waste are interesting since they pollute less and are smoothly compatible with present engines. In both rich and poor countries, laws, assistance and goals are helping to promote the use of bioethanol and biodiesel. They support producers and investors and this is leading to another burst of market growth.

The private sector is making a significant contribution to the development of liquid biofuels. Biofuel technology is being developed by the automotive and aviation industries to ensure that their services are both safe for the environment and preferred by customers who care about eco-friendliness. Many companies are including biofuels in their shipping and transportation to promote their sustainability goals. Biofuels are valuable because they help fill the gap between existing fossil fuel uses and the adoption of green energy, as the world moves to reach net-zero emissions in the middle of this century. As people focus more on sustainable energy, liquid biofuels are becoming increasingly valuable to the world’s energy supply.

Supportive government policies, mandates, and subsidies for blending biofuels with gasoline and diesel are boosting production and consumption across multiple countries.

The expansion of the Liquid Biofuels Market globally is fueled by favorable regulations and government incentives. Various governments are requiring a minimum blend of biofuels in their gasoline and diesel fuels, creating additional demand for bioethanol and biodiesel. This encourages fuel manufacturers and retailers to manufacture more biofuels which ensures the supply required to stay within the specified regulations. In addition, tax credits, grants, and subsidies are provided to manufacturers of biofuels and final consumers by governments to decrease expenses and facilitate the competitiveness of biofuels against fossil fuels. It supports funding for research and development in biofuel technology and prepares for the accommodation and usage of biofuel by final consumers' markets.

Nations are attempting to decrease their greenhouse gases and ensure their energy resources by minimizing the demand for imported oil. Governments seek to establish a clean energy industry, increase rural economies, create jobs for farmers and biofuel employees and strive towards a cleaner solution when they subsidize and require the use of biofuel. Owing to the favourable regulations, North America, Europe and parts of Asia-Pacific are charting the course towards boosting the clean energy market. As a result, liquid biofuels are gaining more applications because of government initiatives and economic incentives.

High production costs and limited feedstock availability in some regions make biofuels less competitive compared to conventional fuels.

A lack of materials to produce liquid biofuels and the cost of production are key reasons the industry faces challenges. Biofuels are often made by costly methods such as planting, gathering the crop and converting the matter which makes liquid biofuels less competitive with fossil fuels. In several parts of the world, sugarcane, corn, vegetable oils and similar agricultural products are expensive because of land shortage, natural factors and difficulty in distributing them.

Manufacturers and users find biofuels less appealing since they are more expensive to make. Because of a shortage of the right feedstock in specific places, producers cannot produce as much biofuel as they would like. If a region cannot meet its agricultural needs or build proper infrastructure, it will face difficulties obtaining enough raw materials for growth. Because of this problem, sales may drop, leading to an unstable and potentially shrinking market. As a result, the overall use of liquid biofuels is restricted due to difficulties in adopting them across countries whose policies and technology are not yet strong enough.

Emerging second and third-generation biofuels derived from non-food biomass and waste materials offer scalable and sustainable solutions.

Biomass and non-food waste are driving the Liquid Biofuels Market. Second-generation biofuels are distinct from traditional ones because they are produced from farm residues, wood, algae and similar items which are unsuitable for consumption. As a result, biofuel may be produced with less emphasis on the environment and food security. Using trash as a raw material is also an economically viable approach and ensures optimal utilization of waste by recycling it as a valuable source of energy.

The new biofuels can increase energy efficiency and cut greenhouse gas emissions, bringing the world to deal with the threat of climate change. With second and third-generation biofuels having new technologies and new production steps now widely available, even those areas lacking first-generation feedstock can produce more and serve more customers. Since scalable and sustainable, future renewable energy will have advanced biofuels as a central component and attract more investment and attention around the world.

Growing investments in aviation and marine biofuels open new demand areas beyond the traditional automotive sector.

As aviation and shipping segments are increasingly investing in biofuels, the Liquid Biofuels Market is witnessing new opportunities arise from customers outside its base region. Shipping and aviation are also adopting biofuels as substitutes for regular jet fuel and diesel because of pressure to mitigate their carbon impact. The fuel used in these countries should be able to endure for a long duration, and liquid advanced biofuels are the best choice to support this. Air transport and shipping companies are demanding that biofuels be produced from R&D to commercial production due to stringent regulations and goals toward sustainability.

The inclusion of biofuels in non-automotive industries provides biofuel producers with more channels to sell their output and lowers their dependence on markets for automotive fuels. Aviation and maritime biofuels can bring huge cuts in greenhouse gas emissions in sectors such as transportation, enabling countries to achieve their climate targets. As the technology improves and the initial costs of fuels come down, sustainability in transport is anticipated to enable the development of the biofuels industry rapidly, and this will lead to more inventions and investments worldwide.

Segment Analysis

Based on product type, the Liquid Biofuels Market is segmented into Bioethanol, Biodiesel, Renewable Diesel, Green Jet Fuel, and Others. Bioethanol is used in many cars across the world as it boosts combustion and helps decrease greenhouse gas releases. Principally, sugar and starch plants such as sugarcane and corn are used to produce bioethanol which gains support from strong mandates and policies found in North America, Europe and several areas in Asia. Because it works with today’s fuel systems, can be used together with them and lowers emissions, it is much sought after. Since the automotive industry is focusing on cleaner fuels, bioethanol is the biofuel most widely produced and consumed all over the world.

Based on feedstock, the Liquid Biofuels Market is segmented into Sugar Crops, Starch Crops, Vegetable Oils, Animal Fats, Algae, Lignocellulosic Biomass, Waste Oils and Greases, and Others. Vegetable oils are the biggest contributor to the market for biodiesel and renewable diesel. Because soybean, palm and canola are found in high numbers in North America, South America and Southeast Asia, this area can produce vegetable oil on a huge scale. Many people prefer vegetable oils since they have a consistent supply, can be easily changed into fuel and new processing methods are increasingly being used. The increasing need for biodiesel in vehicles and manufacturing favours the use of vegetable oils for making biodiesel around the world.

Regional Analysis

The North American liquid biofuels market is leading due to effective rules, better technologies and a firm aim to cut carbon emissions. This growth is supported by federal initiatives such as the Renewable Fuel Standard (RFS), which mandates the blending of renewable fuels into transportation fuel, aiming to reduce greenhouse gas emissions and dependence on imported oil. Bioethanol is mainly manufactured in the United States using corn, due to the Renewable Fuel Standard (RFS) which sets requirements for blending bioethanol with other fuels. Significant amounts of biodiesel are produced by processing soybean oil and used cooking oil. More airlines and fuel producers are investing in creating sustainable aviation fuels to cut carbon emissions from aviation. Government support and investment ensure that North America has a strong footing in the world’s liquid biofuels business.

The Asia-Pacific liquid biofuels market is tremendously expanding, owing to more energy demands, concerns about the environment and positive government measures. In recent years, China, India and Indonesia have been increasing their capacity to produce biofuels by using locally grown sugarcane, palm oil and what remains from farming. The effort to adopt cleaner fuels and decrease fossil fuels is increasing the size of the market. Several projects are under development to create SAF for use within Sri Lanka and also for export. Thanks to its surplus of biomass and strong renewable energy sector, the region is a significant player globally in biofuels.

Competitive Landscape

The liquid biofuels market is dominated by international and regional firms involved in producing, developing and building partnerships. POET LLC, Archer Daniels Midland Company, Valero Energy Corporation, Nestle and Green Plains Inc. are the major players in the market, thanks to their huge operations and variety of biodiesel, bioethanol and advanced biofuels. They put great effort into research and development to improve the use of biofuel, make the process less expensive and use waste materials to fuel their efforts. Various sectors are teaming up to build new infrastructure and consider using cleaner sources of energy. Local Vietnamese firms are taking part, giving the market more solutions, supporting its dynamism and raising the bar for competition.

Liquid Biofuels Market, Company Shares Analysis, 2024

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Recent Developments:

• In August 2024, Pune-based BiofuelCircle raised ₹45 crore (about $5.3 million) in a funding round led by Spectrum Impact. Angel investors and company promoters also participated in the round. The company planned to use the funds to strengthen its supply chain infrastructure. It also aimed to expand its presence in the bioenergy sector.
• In June 2024, BP acquired full ownership of bp Bunge Bioenergia while refocusing plans for new biofuels projects.

Report Coverage:

By Product Type

• Bioethanol
• Biodiesel
• Renewable Diesel
• Green Jet Fuel
• Others

By Feedstock

• Sugar Crops
• Starch Crops
• Vegetable Oils
• Animal Fats
• Algae
• Lignocellulosic Biomass
• Waste Oils and Greases
• Others

By Process

• Fermentation
• Transesterification
• Pyrolysis
• Gasification
• Hydrothermal Liquefaction
• Others

By Application

• Transportation Fuel
• Power Generation
• Thermal Heating
• Others

By End-User

• Transportation
• Power Generation
• Industrial
• Residential
• Others

By Region

North America

• U.S.
• Canada

Europe

• U.K.
• France
• Germany
• Italy
• Spain
• Rest of Europe

Asia Pacific

• China
• Japan
• India
• Australia
• South Korea
• Singapore
• Rest of Asia Pacific

Latin America

• Brazil
• Argentina
• Mexico
• Rest of Latin America

Middle East & Africa

• GCC Countries
• South Africa
• Rest of the Middle East & Africa

List of Companies:

• POET, LLC
• Valero Energy Corporation
• Green Plains Inc.
• Neste Oyj
• Renewable Energy Group, Inc.
• Abengoa Bioenergy
• Cargill, Incorporated
• ADM
• Pacific Ethanol, Inc.
• BP Bunge Bioenergia
• Verbio Vereinigte BioEnergie AG
• Raízen S.A.
• Gevo, Inc.
• TotalEnergies SE
• GranBio Investimentos S.A.

Frequently Asked Questions (FAQs)