Advanced Biofuels Market size is anticipated to reach USD 700 Billion by the end of 2036, growing at a CAGR of 16% during the forecast period, i.e., 2024-2036. In the year 2023, the industry size of advanced biofuels was USD 50 Billion. The rapid increase in energy utilization across the world is fueling the market growth over the projected timeframe. According to a recent report, global energy consumption growth was comparatively reduced in 2022 (+2.1%) but it remained higher than its average growth rate from 2010 to 2019 (+1.4%/year).
Biofuels are mainly produced from biological sources which include vegetable oil, and crop residues such as wheat, barley, and whey. The raw material used for production is easily accessible in local areas at affordable rates. Beside this, animal fat acts as raw material for biodiesel production as the cost is comparatively lower than vegetable oils. Easy and economical availability of raw materials for biofuel production is driving the market growth.
Growth Drivers
Challenges
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Base Year |
2023 |
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Forecast Year |
2024-2036 |
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CAGR |
16% |
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Base Year Market Size (2023) |
USD 50 Billion |
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Forecast Year Market Size (2036) |
USD 700 Billion |
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Regional Scope |
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Fuel (Biodiesel, Bio Butanol, Biogas, Biohydrogen, Cellulosic Ethanol)
The biodiesel segment in the advanced biofuels market is estimated to gain the largest share of about 28% in the year 2036. The segment growth can be attributed to the growing demand for clean and renewable alternatives to petroleum diesel. Using biodiesel as fuel in vehicles can result in improved environmental conditions and public health. In addition, it also offers safety benefits and contributes to a resilient transportation system. According to a recent report, Biodiesel and mixtures were the 129th most traded product in 2022 across the world, with a total trade of USD 36.6 billion. In the years 2021 and 2022, the exports of Biodiesel and mixtures grew by around 42.9%, from USD 25.6 billion to USD 36.6 billion. Biodiesel and mixtures trade represents 0.15% of total world trade.
Feedstock (Lignocellulose, Energy Crops, Algae, Municipal Solid Waste)
The energy crops segment in the advanced biofuels market is predicted to gain a significant share of about 34% in the year 2036. The segment growth can be attributed to the availability of crop residue having the potential to produce energy. Energy crops are likely to grow as dependable and sustainable feedstock which is available easily in local areas and a source for the production of advanced biofuels. Ongoing improvements in agricultural yield and sustainable farming techniques are the reason behind the growth of the advanced biofuel market.
Our in-depth analysis of the global market includes the following segments:
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Fuel |
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Feedstock |
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Processing Technology |
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Application |
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North American Market Forecast
The advanced biofuels market in North America is predicted to hold the largest with a share of about 34% by the end of 2036. The market growth in the region is also expected on account of supportive government regulation to increase biofuel production and the growing demand for cleaner-burning transportation fuels, mainly in the United States.
Additionally, owing to the presence of big companies with innovative ideas and the latest technology for the production of clean and green fuel, it is projected to have a significant impact on the market size. As per a recent report, the United States was the leading producer of biofuel in 2022 with a total production of around 1,627 petajoules. Biofuel produced in the United States accounts for nearly 38% of global biofuel production in 2022. The country has produced the largest amount of biodiesel with annual production of 1.64 billion gallons. Global biofuel production has gradually increased from 180 thousand barrels of oil equivalent per day in 2000 to 1.9 million barrels of oil equivalent per day in 2022. Moreover, the largest consumer of biofuels in the U.S. is the national army, adding to the market revenue.
APAC Market Analysis
The Asia Pacific market is estimated to be the second largest, registering a share of about 25% by the end of 2036. The advanced biofuels market expansion can be attributed majorly to the growing awareness of the benefits of using advanced biofuels in emerging economies. As per the recent report, Indonesia was ranked third in biofuel production across the world in 2022 with a total production of 390 petajoules. Apart from this, Indonesia is the largest producer of biodiesel and renewable diesel in the world. In 2022, the country has reported production of around 13.65 billion liters of biofuel. In addition, factories are producing cellulosic ethanol by using agricultural waste as raw material for biofuel production in the region. Businesses have started investing in the latest technological equipment to match the growing market demand for converting trash into fuel and producing biofuels by using algae as feedstock.
Author Credits: Payel Roy, Dhruv Bhatia
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