Lignin Bio-oil Market Outlook:
Lignin Bio-oil Market size was over USD 12.62 million in 2025 and is poised to exceed USD 23.69 million by 2035, growing at over 6.5% CAGR during the forecast period i.e., between 2026-2035. In the year 2026, the industry size of lignin bio-oil is estimated at USD 13.36 million.
The growth of the market is set to expand on account of growing pollution from fossil fuel. Global CO2 emissions from energy increased by about 0.8%, or approximately 320 million tons, in 2022, hitting an all-time high of over 35 billion tons. Hence, there has growing urge to replace fossil fuel with lignin bio-oil, further boosting market growth.
Due to its aromaticity and renewability, lignin is a possible replacement for conventional fossil resources in the production of biofuels. Additionally, the government is also encouraging the use of lignin bio-oil in order to achieve the target of zero emission. Therefore, this could also encourage market expansion.
Key Lignin Bio-oil Market Insights Summary:
Regional Highlights:
- Asia Pacific lignin bio-oil market is anticipated to achieve a 35% share by 2035, driven by increasing agriculture waste which supports lignin extraction.
Segment Insights:
- The pyrolysis segment in the lignin bio-oil market is projected to hold a 70% share by 2035, fueled by the efficiency and adaptability of fast pyrolysis in lignin conversion.
- Automotive segment in the lignin bio-oil market is projected to achieve 50% growth by the forecast year 2035, influenced by growing pollution concerns caused by the automotive industry.
Key Growth Trends:
- Growing Production of Paper & Pulp
- Rising Use of Lignin Bio-oil in Chemical Industry
Major Challenges:
- Lack of Knowledge Among People
- Consist of Complex Composition
Key Players: Stora Enso Oyj, UPM-Kymmene Corporation, Domtar Corporation, Borregaard ASA, Lignol Energy Corporation, Lignin Industries AB, MetGen Oy, GreenValue SA, SunCoal Industries GmbH, Ingevity Corporation.
Global Lignin Bio-oil Market Forecast and Regional Outlook:
Market Size & Growth Projections:
- 2025 Market Size: USD 12.62 million
- 2026 Market Size: USD 13.36 million
- Projected Market Size: USD 23.69 million by 2035
- Growth Forecasts: 6.5% CAGR (2026-2035)
Key Regional Dynamics:
- Largest Region: Asia Pacific (35% Share by 2035)
- Fastest Growing Region: Europe
- Dominating Countries: United States, China, Germany, Finland, Canada
- Emerging Countries: China, India, Japan, Brazil, Thailand
Last updated on : 11 September, 2025
Lignin Bio-oil Market Growth Drivers and Challenges:
Growth Drivers
- Growing Production of Paper & Pulp: About 190 million metric tons of pulp for paper has been generated worldwide in 2021. Hence, the production of lignin bio-oil is also growing. The waste of paper when production known as lignin is extracted when producing paper. Hence, further, this extracted lignin is used in producing valuable products like as bio fuels.
- Rising Use of Lignin Bio-oil in Chemical Industry: Lignin bio-oil is used as feedstock in the manufacturing of various chemicals such as phenolic compounds, aromatic chemicals, and more. Furthermore, there has been growing research in this field. However, this method is estimated to have huge popularity in the future since it will cut the need for fossil fuels.
- Surge in Application of Lignin Bio-oil in Aviation: Even though lignin bio-oil is not extensively used as replaced fuel option for aviation, owing to growing pollution its use is slated to increase. This industry has been exploring various fuel alternatives; however, lignin bio-oil is one of the preferred alternatives since it has high velocity and energy density.
Challenges
- Lack of Knowledge Among People – Since lignin bio fuel is developing concept is not highly commercialized. Therefore, not a large number of people are aware of it. Moreover, a large number of developing nations find comfort in fossil fuel as it is considered to be difficult to quit it. Therefore, this factor is set to hinder market expansion.
- Consist of Complex Composition
- Availability of Alternatives
Lignin Bio-oil Market Size and Forecast:
| Report Attribute | Details |
|---|---|
|
Base Year |
2025 |
|
Forecast Period |
2026-2035 |
|
CAGR |
6.5% |
|
Base Year Market Size (2025) |
USD 12.62 million |
|
Forecast Year Market Size (2035) |
USD 23.69 million |
|
Regional Scope |
|
Lignin Bio-oil Market Segmentation:
End-Use
The automotive segment in the lignin bio-oil market is anticipated to grow at a share of about 50% during the coming years. This is could be owing to growing pollution caused by automotive. Over 6 billion metric tons of carbon dioxide (GtCO2) were created by the worldwide transport industry in 2021, making it one of the greatest polluters. Passenger cars accounted for about 38 percent of the emissions during that year. Hence, the utilization of lignin bio-oil is growing in automotive.
Process
The pyrolysis segment is set to rise at a share of approximately 70% over the forecast period. In a lack of oxygen, pyrolysis is a quick and easy thermochemical process for converting solid biomass into bio-oil. In fast pyrolysis, the substances in the reactor are heated to the desired temperature at a rapid pace, and lignin is quickly broken down into volatiles that are rapidly condensed into liquid. Fast pyrolysis's adaptability and simplicity of utilization render lignin conversion more efficient and practical. As a result, biomass pyrolysis is an effective way to surge the market demand.
Our in-depth analysis of the global market includes the following segments:
|
Process |
|
|
End-Use |
|
Vishnu Nair
Head - Global Business DevelopmentCustomize this report to your requirements — connect with our consultant for personalized insights and options.
Lignin Bio-oil Market Regional Analysis:
APAC Market Insights
Asia Pacific industry is likely to hold largest revenue share of 35% by 2035. The growth of the market in this region could be primarily attributed to growing agriculture waste which could be further utilized in extracting lignin. About 499 million of agriculture waste is produced in India every year. Hence, this could also encourage sustainability in handling agriculture waste along with boosting market share in this region.
European Market Insights
The Europe market for lignin bio-oil is also poised to grow over the projected period. This could be on account of rising investment in the manufacturing of lignin bio-oil. Also, since, the material from which the lignin is formed is easily available in nature the cost of the final product is also reduced. This has influenced the Europe market to adopt lignin bio-oil.
Lignin Bio-oil Market Players:
- UPM-Kymmene Corporation
- Company Overview
- Business Strategy
- Key Product Offerings
- Financial Performance
- Key Performance Indicators
- Risk Analysis
- Recent Development
- Regional Presence
- SWOT Analysis
- Borregaard ASA
- Domtar Corporation
- Stora Enso
- Lignol Energy Corporation
- Ensyn Corporation
- American Process
- LignoTech Development Ltd.
- RenFuel AB
- Ligno Biotech Sdn Bhd
Recent Developments
- UPM-Kymmene Corporation invests in a biorefinery in Leuna, Germany, as the next transformational growth step and enters the biochemicals industry. A variety of biochemicals made entirely from wood will be produced by the biorefinery, enabling a shift from fossil raw materials to sustainable substitutes in a variety of consumer-driven end uses. The investment gives UPM access to entirely new markets with significant future growth possibilities.
- The new lignin factory owned by LignoTech Florida in Fernandina Beach was formally inaugurated on June 26. A manufacturing capacity of 100,000 metric tons of dry lignin is represented by the 110 million USD investment. The capacity can eventually be increased by 50,000 tons in a second phase that is planned. The factory has been in test operation for a while and is now manufacturing lignin that can be sold.
- Report ID: 5228
- Published Date: Sep 11, 2025
- Report Format: PDF, PPT
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