The global biofuels production market was valued at nearly 120 billion U.S. dollars in 2023. Figures are projected to continuously increase until 2030 when the biofuels market is forecast to amount to more than 175 billion U.S. dollars. More information on the global biofuels production market can be found here. Largest biofuel producers Biofuels are especially prevalent in the transportation sector and have been marketed as a renewable alternative to petroleum-based motor fuels such as gasoline and diesel. Ethanol and biodiesel are the most common biofuel types, which are won from distilling and refining feedstocks such as crops, vegetable oils, and cooking fats. Although biofuel adoption has increased, they are usually blended with gasoline and diesel in order for them to work in regular combustion engines. The United States is the leading biofuel producing country in the world, followed by Brazil and Indonesia. Biofuels production to exceed 200bn liters Both ethanol and biodiesel production is forecast to increase in the coming years. In 2024, a biofuel production forecast suggests worldwide output could edge close to 200 billion liters per annum.

The global biodiesel market size reached USD 46.1 Billion in 2024. Looking forward, IMARC Group expects the market to reach USD 63.4 Billion by 2033, exhibiting a growth rate (CAGR) of 3.6% during 2025-2033. Government regulations promoting renewable energy, surging concerns over energy security and oil price volatility, continuous technological advancements in production processes, increasing public awareness of environmental issues, and escalating efforts to combat climate change are some of the factors propelling the market.

IMARC Group provides an analysis of the key trends in each segment of the global biodiesel market report, along with forecasts at the global and regional levels from 2025-2033. Our report has categorized the market based on feedstock, application, type and production technology.

The Biodiesel Market Report is Segmented by Feedstock (Vegetable Oils, Waste Cooking Oil and Tallow, and More), Production Process (Trans-Esterification, Hydro-Treated Vegetable Oil, and Co-processed/Co-refined Diesel), Blend Level (B5 and Below, B6 To B20, and B100), Application (Transportation-Road, Industrial and Others, and More), and Geography (North America, Europe, Asia-Pacific, South America, and Middle East and Africa).

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Biodiesel Market Size 2024-2028

The biodiesel market size is valued to increase USD 16.71 billion, at a CAGR of 7.38% from 2023 to 2028. Growing demand for algae for production of biodiesel will drive the biodiesel market.

Major Market Trends & Insights

APAC dominated the market and accounted for a 49% growth during the forecast period.
By Application - Transport fuel segment was valued at USD 25.90 billion in 2022
By Type - Vegetable oil segment accounted for the largest market revenue share in 2022

Market Size & Forecast

Market Opportunities: USD 73.69 billion
Market Future Opportunities: USD 16.71 billion
CAGR from 2023 to 2028 : 7.38%

Market Summary

The market encompasses the production, consumption, and regulatory landscape of this renewable fuel derived from vegetable oils or animal fats. Core technologies, such as transesterification and supercritical methanol processes, facilitate biodiesel production. Applications span sectors like transportation and power generation, with the transportation segment holding a significant market share due to increasing demand for sustainable fuel alternatives. However, high operating costs remain a major challenge. Notably, the biodiesel industry is evolving, with biofuel from algae and the use of spent bleaching earth gaining traction. Regulations, such as the Renewable Fuel Standard in the US, continue to shape market dynamics. According to a study, the global algae the market is projected to reach 5.3 billion liters by 2026, reflecting the growing potential of this sector.

What will be the Size of the Biodiesel Market during the forecast period?

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How is the Biodiesel Market Segmented ?

The biodiesel industry research report provides comprehensive data (region-wise segment analysis), with forecasts and estimates in 'USD billion' for the period 2024-2028, as well as historical data from 2018-2022 for the following segments. ApplicationTransport fuelPower generationOthersTypeVegetable oilAnimal fatsOthersGeographyNorth AmericaUSAPACIndiaIndonesiaThailandSouth AmericaBrazilRest of World (ROW)

By Application Insights

The transport fuel segment is estimated to witness significant growth during the forecast period.

Biodiesel, an eco-friendly alternative to traditional diesel, is gaining significant traction in various industries due to its sustainability and carbon footprint reduction benefits. The market is currently witnessing a notable increase in adoption, with feedstocks derived from renewable sources accounting for over 82% of the market share. In Europe, biodiesel dominates the biofuel sector, constituting more than 80% of the market, driven by the increasing use of this cleaner fuel in automobiles. Meanwhile, in India, the biodiesel industry is poised for growth, with the country investing heavily in its production. Karnataka state, for instance, has already integrated biodiesel into its public transportation sector, contributing to the reduction of greenhouse gas emissions. The market is projected to expand further, with industry experts anticipating a rise in demand, driven by the ongoing transition towards sustainable fuel production. The production process of biodiesel involves esterification reactions and transesterification, which improve cetane number and reduce sulfur content. Adherence to ASTM biodiesel standards ensures consistent fuel quality, while production cost reductions are achieved through efficient supply chain optimization and waste management strategies. Biodiesel's environmental impact assessment is a critical consideration, with exhaust gas recirculation and oxidative stability testing essential for ensuring optimal combustion efficiency. The reduction of particle matter and nitrogen oxide emissions, along with improved fuel injector performance, further bolsters the appeal of biodiesel as a cleaner, more efficient fuel option. Glycerol, a byproduct of the biodiesel production process, can be utilized in various industries, further increasing the economic viability of this renewable energy source. The ongoing research and development in catalyst optimization studies and greenhouse gas emissions analysis contribute to the continuous evolution of the market. In conclusion, the market is experiencing substantial growth, driven by its environmental benefits and increasing adoption in various industries. With a focus on sustainability, efficiency, and cost reduction, the market is poised for continued expansion, making it an attractive investment opportunity for businesses seeking to reduce their carbon footprint and contribute to energy independence.

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The Transport fuel segment was valued at USD 25.90 billion in 2018 and showed a gradual increase during the forecast period.

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Regional Analysis

In 2024, worldwide biodiesel consumption amounted to ***** million metric tons. This was up from only *** million metric tons consumed in 2004. Consumption volumes are expected to increase further over the coming years and are forecast to exceed ** million metric tons in 2030.

North America is the largest biofuels production market in the world. In 2023, the North American biofuels market was worth some 44.76 billions U.S. dollars and is forecast to exceed 60 billion U.S. dollars by 2030. More information on the biofuels production market can be found here.

Biodiesel Market size is set to expand from $ 35.87 Billion in 2023 to $ 70.81 Billion by 2032, with an anticipated CAGR of around 7.85% from 2024 to 2032.

The global Biodiesel market has expanded to reach approximately 68 million tonnes in 2024 and is expected to grow at a CAGR of 3.95% during the forecast period until 2035.

Biodiesel Market size was valued at USD 43.04 Billion in 2024 and is projected to reach USD 56.44 Billion by 2032, growing at a CAGR of 3.8% from 2026 to 2032.

Global Biodiesel Market Drivers

Regulations and Policies Regarding Renewable Energy: The market for biodiesel is mostly driven by government programs and laws that encourage the use of renewable energy sources. Demand has grown as a result of goals, incentives, and mandates for mixing biodiesel with regular diesel.

Environmental Issues and Objectives for Reducing Emissions: When compared to conventional fossil fuels, biodiesel is said to be a cleaner fuel that helps lower greenhouse gas emissions. The use of biodiesel as a strategy to meet emission reduction targets is motivated by growing concerns about air pollution and climate change.

Energy Security and Fuel Source Diversification: Energy security is improved through the manufacture of biodiesel from renewable feedstocks, which lessens reliance on traditional fossil fuels. Diversifying fuel sources is a strategy used by governments and businesses to reduce risks related to supply chain and geopolitical concerns.

Government Incentives and Supportive Subsidies: Government tax breaks, subsidies, and other financial incentives promote investments in the production and use of biodiesel. These subsidies contribute to biodiesel's increased economic viability relative to traditional diesel.

Customer Knowledge and Preference for Eco-Friendly Products: Growing consumer knowledge of how their decisions affect the environment is driving demand for eco-friendly and sustainable products like biodiesel. The market is growing as a result of consumer desires for greener and cleaner energy sources.

The Biofuels Market Report is Segmented by Fuel Type (Bioethanol, Biodiesel, Renewable Diesel, and More), Generation (First-Generation, Third-Generation, and More), Feedstock (Sugar Crops, Starch Crops, Algae, and More), Technology (Fermentation, Trans-Esterification, Hydrotreatmen, and More), End-Use (Road Transport, Aviation, Marine, and Power Generation and Heating), and Geography (North America, Europe, Asia-Pacific, and More).

According to Cognitive Market Research, the global biofuel market size is USD 167.4 billion in 2024 and will expand at a compound annual growth rate (CAGR) of 6.2% from 2024 to 2031. Market Dynamics of Biofuel Market

Key Drivers for Biofuel Market

Government policies and regulatory mandates

One of the strongest drivers fueling growth in the biofuel market is the increasing adoption of government policies aimed at reducing greenhouse gas emissions and achieving energy security. For instance, India’s ambitious plan to implement E20 ethanol blending by 2025 exemplifies this driver in action. This policy mandates that petrol sold in the country must contain 20% ethanol, up from the previous 10%, significantly boosting demand for bioethanol. The Indian government is also supporting the expansion of ethanol production capacity through subsidies and incentives for sugar mills and new bio-refineries. This regulatory push not only encourages domestic production but also attracts investments into the biofuel sector, enabling rural economic growth and helping reduce reliance on imported fossil fuels. By mandating higher blending targets, governments create a guaranteed market for biofuels, which is critical for scaling production and improving the economics of biofuel projects.

(Source:https://www.pib.gov.in/PressReleasePage.aspx?PRID=2113234)

Global Transition to Renewable Energy Sources: Increasing apprehensions regarding climate change and energy security are driving both governments and industries to embrace biofuels as a viable alternative to fossil fuels.

Supportive Government Initiatives and Financial Aid: Regulatory requirements such as blending mandates and financial support are enhancing the production and utilization of biofuels in both transportation and power generation.

Abundant Supply of Feedstock: Agricultural residues, used cooking oil, and energy crops offer a readily accessible feedstock for biofuel production, particularly in rural and agricultural areas.

Progress in Biofuel Production Technologies: Advancements in second- and third-generation biofuels are enhancing efficiency, minimizing land use conflicts, and facilitating the utilization of non-food biomass.

Key Restraints for Biofuel Market

High Production Expenses Relative to Fossil Fuels: In spite of advancements, biofuels frequently remain pricier than petroleum-based options, hindering their competitiveness in the absence of subsidies.

Food versus Fuel Controversy: The utilization of food crops such as corn and sugarcane for fuel production raises ethical dilemmas and exerts pressure on the global food supply and pricing.

Infrastructure Challenges for Distribution and Blending: Numerous regions are deficient in the necessary pipelines, storage facilities, and vehicles capable of managing biofuel blends, which hampers market penetration.

Inconsistent Policy and Regulatory Environments: Variations in global regulations, a lack of long-term policy stability, and frequent alterations in mandates generate investment risks within the biofuel industry.

Key Trends for Biofuel Market

Shift toward advanced (second- and third-generation) biofuels

A significant trend reshaping the biofuel landscape is the growing focus on advanced biofuels produced from non-food biomass, such as agricultural residues, waste oils, and algae. This shift is driven by concerns over food security and the environmental impact of first-generation biofuels made from food crops like corn and sugarcane. Second-generation biofuels utilize lignocellulosic biomass, which does not compete with food supply, while third-generation biofuels tap into algae, offering higher yields with less land use. Technological advancements have made these biofuels more commercially viable, supported by increased R&D investments and pilot projects worldwide. For example, the European Union and the U.S. are funding projects to scale up sustainable aviation fuels (SAF) derived from advanced feedstocks, which have the potential to significantly reduce lifecycle carbon emissions compared to traditional jet fuels. This trend points to a more sustainable and diversified biofuel future, emphasizing innovation and environmental stewardship.

(Source:https://www.sciencedirect.com/science/article/abs/pii/S0961953425001680)

Expansion of Second- and Third-Generation Biofuels: The emphasis i...

Ethanol has by far the highest production market value of any biofuel worldwide. In 2023, ethanol production had a market value of nearly 80 billion U.S. dollars. This compared to a little over 25 billion U.S. dollars for biodiesel. More information on the biofuels production market can be found here.

Unlock lucrative growth opportunities in the Biodiesel market with our business intelligence report. Stay informed about the latest trends and overcome industry challenges

Global Biofuels Market size worth at USD 164.38 Billion in 2023 and projected to USD 291.7 Billion by 2032, with a CAGR of around 6.58% between 2024-2032.

The article discusses the increasing demand for biodiesel worldwide, with the market expected to continue growing over the next six years. Market performance is projected to expand with an anticipated CAGR of +5.3% in volume and +7.3% in value, reaching 60M tons and $88.8B respectively by the end of 2030.

As per Cognitive Market Research's latest published report, the Global Biodiesel market size was $32.09 Billion in 2022. Biodiesel Industry's Compound Annual Growth Rate will be 9.8% from 2023 to 2030. Factors Affecting Biodiesel Industry Growth

Increasing preference for renewable energy sources due to environmental concerns, and increasing demand for cleaner fuels are the major driving factors for the global biodiesel market. The growing automotive industry is demanding biodiesel as it is environment friendly and cost-effective option compared to other fuels, which is fuelling the growth of the market. In addition, biodiesel production has a large scope for R&D in feedstock selection is expected to create opportunities for the market in the forecast period. A high demand-supply gap caused by insufficient production capacity, and the presence of alternative products can hamper the growth of the market. What is Biodiesel?

Biodiesel is a renewable, biodegradable fuel produced locally from vegetable oils, animal fats, or recycled restaurant grease. Biodiesel meets both the biomass-based diesel and overall advanced biofuel requirements of the Renewable Fuel Standard. Renewable diesel, also known as “green diesel,” is distinct from biodiesel. Biodiesel is a liquid fuel often referred to as B100 or neat biodiesel in its pure, unblended form.

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Biofuels Market Size 2025-2029

The biofuels market size is forecast to increase by USD 32.6 billion at a CAGR of 3.8% between 2024 and 2029.

The market is experiencing significant growth due to the increasing adoption of renewable energy sources as a response to reducing greenhouse gas emissions. Key biofuels include those derived from corn, sugarcane, vegetable oil, and biomass. This shift towards sustainable energy solutions is being fueled by both environmental concerns and regulatory mandates. However, market expansion is not without challenges. Fluctuations in oil prices pose a significant threat to the competitiveness of biofuels, as they can impact the cost-effectiveness of production. Additionally, regulatory hurdles impact adoption, particularly in regards to the approval and implementation of new biofuel technologies and standards.
Supply chain inconsistencies, including the availability and cost of raw materials, also temper growth potential. Companies seeking to capitalize on market opportunities must navigate these challenges effectively, focusing on innovation, cost reduction, and regulatory compliance. By doing so, they can position themselves as leaders in the rapidly evolving biofuels landscape.

What will be the Size of the Biofuels Market during the forecast period?

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The market is experiencing dynamic shifts driven by environmental concerns, regulatory frameworks, and technological advancements. Biofuel environmental impact is a critical factor influencing consumer awareness and public perception. Regulatory environments, such as renewable fuel mandates, shape the market landscape and drive investment opportunities in advanced biofuels like cellulosic ethanol. Biofuel lifecycle analysis and sustainability are key considerations for biofuel certification and consumer acceptance. Sustainable aviation fuel and drop-in fuels are gaining traction due to their reduced carbon footprint and compatibility with existing infrastructure. Biomass conversion and feedstock supply chain are essential components of the biofuel industry, with innovation ecosystems fostering breakthroughs in biofuel technology and biomass utilization.
Biofuel adoption rates are influenced by cost competitiveness and blending ratios, while infrastructure development and industry consolidation shape market penetration. Biofuel standards and certification play a crucial role in ensuring transparency and trust in the market. Social impact assessments and continuous innovation are essential for addressing challenges and seizing opportunities in the evolving biofuels landscape. Biofuels are derived from renewable sources, including plants, algae, and organic waste, and are utilized to fuel various vehicles, such as cars, trucks, ships, and airplanes. The market's expansion is driven by environmental regulations, the need for GHG reductions, and energy security concerns. Key biofuels include ethanol, biodiesel, renewable diesel, hydrogenated oil, biojet, and sustainable aviation fuel. Feedstocks for biofuel production include vegetable oil, molasses, coarse grain, sugar crops, and biomass, among others.

How is this Biofuels Industry segmented?

The biofuels industry research report provides comprehensive data (region-wise segment analysis), with forecasts and estimates in 'USD billion' for the period 2025-2029, as well as historical data from 2019-2023 for the following segments.

Application

  Transportation
  Aviation
  Heating
  Energy generation
  Others


Product

  Ethanol
  Biodiesel


Material

  Starch crops and sugar crops
  Agricultural residues
  Oil crops
  Waste oils and fats
  Algae and non-food crops


Geography

  North America

    US
    Canada


  Europe

    France
    Germany
    UK


  APAC

    China
    India
    Indonesia


  South America

    Argentina
    Brazil


  Rest of World (ROW)

By Application Insights

The transportation segment is estimated to witness significant growth during the forecast period.

The transportation market has witnessed substantial expansion in the last decade, fueled by growing concerns over climate change, the imperative to decrease greenhouse gas emissions, and the pursuit of energy security. Governments worldwide have enacted regulations and policies to encourage biofuel adoption, contributing to market growth. Biofuels, derived from renewable sources such as plants, algae, and organic waste, are used to power various vehicles, including automobiles, heavy-duty trucks, ships, and aircraft. These alternative fuels offer improved fuel efficiency, reduced carbon emissions, and contribute to a low-carbon economy and circular economy. Biofuel production processes include the conversion of waste biomass into bioethanol, biodiesel, renewable diesel, biojet fuel, and other advanced biofuels.

The industrial sector and agricultural sector are significant con

Biodiesel Market by Blend (B100, B20, B10, B5), Feedstock (Vegetable Oils {Rapeseed Oil, Palm Oil}, Animal Fats {Poultry, Tallow}), Application (Fuel {Automotive, Marine, Agriculture}), and Geography - Global Forecast to 2029

The global biodiesel market size was valued at over USD 48.06 billion in 2025 and is expected to expand at a CAGR of over 8.5%, surpassing USD 108.66 billion revenue by 2035, impelled by growing application in the logistics sector.