Biofuels Market size was over USD 173.09 billion in 2024 and is projected to reach USD 360.23 billion by 2037, growing at around 5.8% CAGR during the forecast period i.e., between 2025-2037. In the year 2025, the industry size of biofuels is assessed at USD 181.12 billion. The primary growth factor boosting the expansion of the market is the high need for biofuels in the aviation sector. They are utilized as aviation fuels and also used with biomass waste, oil, and fat waste.
The aerospace sector is experiencing substantial growth due to the need for fuel-efficient and lightweight aircraft, increased air traffic, and higher income levels. Based on the International Air Transport Association (IATA) estimates, the revenue of commercial airlines in North America is projected to increase by 1.9% in 2022 compared to previous years.
Growth Drivers
Challenges
|
Base Year |
2024 |
|
Forecast Year |
2025-2037 |
|
CAGR |
5.8% |
|
Base Year Market Size (2024) |
USD 173.09 billion |
|
Forecast Year Market Size (2037) |
USD 360.23 billion |
|
Regional Scope |
|
Fuel Type (Ethanol, Propanol, Butanol);
Ethanol segment is estimated to capture over 70% biofuels market share by 2037. The combustion of fossil fuels in internal combustion engines makes the transportation sector the largest contributor of greenhouse gas emissions on a global scale. To reduce these emissions, countries worldwide have implemented regulations to encourage the use of renewable energy sources.
Ethanol and other biofuels are seen as cleaner energy alternatives for the transportation industry, potentially driving the growth of the biofuel market in the future. Renewable Fuels Association reports stated, that with the production of 15.4 billion gallons of fuel ethanol, the United States made its place as the top producer of biofuel globally in 2022.
Form (Solid, Liquid, Gas)
Liquid segment in the biofuels market is likely to showcase lucrative growth rate till 2037. Liquid biofuel types are in high demand compared to solid and gaseous types because they are extensively used in flexible-fuel vehicles and there is a focus on energy security. These biofuels are derived from renewable sources, especially domestic and commercial waste, which reduces concerns about resource scarcity. Furthermore, the increasing use of liquid biofuels as a transportation fuel in the automotive transportation sector is driving the demand for biofuels.
Application (Transportation, Automotive, Aviation, Heating, Energy Generation, Industrial Processes)
In application segmentation, the automotive segment in the biofuels market is anticipated to dominate the revenue in the year 2037. Biofuels like ethanol, biodiesel, and other alternatives are being used more and more as a means of fuel for transportation in the automotive industry. The automotive sector has significant potential for growth due to factors for instance, the increasing need for fuel-efficient vehicles, the shift towards electric vehicles, and urbanization trends.
The number of newly registered vehicles in Australia saw a 1.2% increase, with 101,233 units in March 2022 compared to March 2021. As the automotive transportation sector experiences rapid growth and production trends, the demand for biofuels as transportation fuel or vehicle engine fuel is on the rise.
Our in-depth analysis of the global market includes the following segments:
|
Type |
|
|
Fuel Type |
|
|
Feedstock |
|
|
Form |
|
|
Application |
|
North American Market Statistics
North America industry is estimated to hold largest revenue share of 33% by 2037, influenced by rapid growth in the automotive industry in the region. The established base for biofuel utilization, abundant biofuel feedstock, and supportive government policies for renewable energy are influencing the promising growth potential of biofuel in this region. The growth of the automotive sector in North America is being driven by increasing public transportation, the demand for fuel-efficient vehicles, and stringent regulations for particulate emissions. In the United States automotive production grew by 10.8 million units in 2023, up from 10.47 million in 2022 found to data from the International Organization of Motor Vehicles Manufacturers.
The U.S. biotech sector is highly advanced internationally and can manufacture profitable biobased products. Due to multiple government initiatives aimed at supporting biofuels across different industries, Canada presents a promising potential for biofuel manufacturing.
APAC Market Analysis
APAC biofuels market is estimated to grow substantially through 2037. In the Asia-Pacific region, the implementation and growing acceptance of biofuel-friendly laws and regulations are anticipated to boost the demand for biofuels, especially in the transportation industry. Despite biofuels being at an early stage in Asia Pacific, there is substantial room for expansion, exemplified by NESTE's investment of USD 1.4 billion in a biorefinery in Singapore in 2019.
Due to the increased awareness of reducing carbon emissions and improving the use of biofuels, India is making advancements.
The government in the region set a target to reduce greenhouse emissions to boost the market growth in Japan.
China is currently at the forefront in manufacturing, research, and innovation investments. One of the most crucial market factors is the need to reduce its dependence on oil and energy exports.
The global industry faces intense competition, with major players actively engaging in research and development. The ongoing innovations by suppliers have emerged as a critical factor for companies to achieve success in the market. At present, there is a surge in investments, supported by favorable policies and economic backing from the governments of major economies.
Author Credits: Dhruv Bhatia
Copyright © 2024 Research Nester. All Rights Reserved
FREE Sample Copy includes market overview, growth trends, statistical charts & tables, forecast estimates, and much more.
Have questions before ordering this report?