Second-Generation Biofuels Market Analysis by Feedstock (Simple Lignocellulose, Complex Lignocellulose, Syngas, Algae), Application (Transportation, Power Generation); Type (Cellulosic Ethanol, Biodiesel, Bio Butanol, Bio DME); Process (Biochemical Process, Thermochemical Process) – Global Supply & Demand Analysis & Opportunity Outlook 2023-2035

Buy Now Report ID: 4879 | Published Date: May 01, 2023

Global Second-Generation Biofuels Market Size, Forecast, and Trend Highlights Over 2023 – 2035

Second-Generation Biofuels Market size is estimated to reach ~USD 58 Billion by the end of 2035 by growing at a CAGR of ~25% over the forecast period, i.e., 2023 – 2035. In addition to this, in the year 2022, the market size of second-generation biofuels was ~USD 6 Billion. The growth of the market can be attributed to growing greenhouse gasses caused by agriculture food waste. About 2 billion tons of CO2 equivalent of greenhouse gases are thought to be released into the environment each year as a result of food waste, globally. However, food loss and waste do not directly contribute to the pollution that would raise the demand for second-generation biofuels. Food loss and waste, on the other hand, could contribute to pollution indirectly, and second-generation biofuels could help minimize the environmental implications of food loss and waste.

When food is lost or thrown away, the resources used to create, transport, and keep it are also wasted. Increased greenhouse gas emissions, water pollution, and other environmental issues may arise from this. Moreover, when food waste is dumped in landfills, it decomposes and generates methane, a strong greenhouse gas that fuels climate change. Hence, by offering a renewable energy source that emits fewer greenhouse gases than fossil fuels, second-generation biofuels may help in resolving these concerns. Consumers could lessen the dependence on fossil fuels and lessen the negative effects of food loss and waste on the environment by generating biofuels from non-food feedstock’s such agricultural waste, forestry waste, and energy crops. In comparison to 2021, the demand for biofuels was predicted to increase by about 5%, or approximately 9 009 MLPY, in 2022 across the globe. Hence, with the growing food waste the biofuel production could be boosted.

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Global Second-Generation Biofuels Market: Key Insights


Base Year


Forecast Year




Base Year Market Size (2022)

~ USD 6 Billion

Forecast Year Market Size (2035)

~ USD 58 Billion

Regional Scope

  • North America (U.S., and Canada)
  • Latin America (Mexico, Argentina, Rest of Latin America)
  • Asia-Pacific (Japan, China, India, Indonesia, Malaysia, Australia, Rest of Asia-Pacific)
  • Europe (U.K., Germany, France, Italy, Spain, Russia, NORDIC, Rest of Europe)
  • Middle East and Africa (Israel, GCC North Africa, South Africa, Rest of the Middle East and Africa)


Global Second-Generation Biofuels Market: Growth Drivers and Challenges


Growth Drivers

  • Growing Demand for Vehicles

Around 65 million cars were sold globally in 2021, however that number rose to about 66 million in 2022. As a renewable substitute for fossil fuels in transportation, second-generation biofuels may be employed. They could be used in vehicles as a stand-alone fuel or blended with regular petrol or diesel. The automobile sector is interested in biofuels produced from non-food feedstock’s since they have the potential to lower greenhouse gas emissions and air pollution.

  • Rise in Generation of Electricity

In 2022, approximately 4,243 billion kilowatthours (kWh) (or approximately 4.24 trillion kWh) of electricity were generated by utility-scale electrical producing facilities in the United States. Electricity may be produced using second-generation biofuels. Burning biomass may produce heat, which may be utilized to create steam and power turbines to generate electricity. The technique is known as biomass combustion. Biofuels may additionally be utilized in fuel cells to directly generate power.

  • Surge in Government Initiatives to Use Biofuels

In addition to moving the deadline for blending about 19% ethanol into petrol from 2030 to 2025, the government of India has also planned to increase domestic biofuel production by approximately 9% annually.

  • Growth in Production of Bioplastics

In 2021, there were about 3 million metric tona of bioplastics produced globally. Second-generation biofuels could serve as a feedstock for the creation of bioplastics. For instance, some biofuels are produced using non-food feedstock such agricultural waste, forestry byproducts, and energy crops. These feedstocks could also be utilized to make biopolymers, which could then be used to make bioplastics.

  • Upsurge in Construction Activities

Between 2002 and 2021, the value of US public residential construction investments increased significantly. The public sector made roughly USD 10 billion in residential building projects in 2021. Through the use of huge cars and heavy machinery that utilize a lot of fossil fuels, the construction industry does contribute to greenhouse gas emissions. Second-generation biofuels produced from non-food feedstocks may offer a renewable alternative to fossil fuels for these vehicles and equipment, reducing emissions and mitigating the environmental implications of construction activities.



  • High Production Costs
  • Lack of Availability of Feedstocks - One important aspect that could slow the market's expansion for second-generation biofuels is the scarcity of feedstocks. The majority of second-generation biofuels are made from non-food feedstocks including agricultural and forestry waste, which may be in short supply or in just certain seasons. The main cause of the limited availability of feedstocks is the potentially expensive and ineffective collection and transportation of biomass.  For instance, the need to gather agricultural waste from various sources and bring it to a central location for processing could significantly increase the price of producing biofuels. Additionally, elements including weather patterns and changes in land use could have an impact on the quantity and quality of biomass, which could have an impact on the supply of feedstocks.
  •  Policy Uncertainty

Global Second-Generation Biofuels Market Segmentation

The global second-generation biofuels market is segmented and analyzed for demand and supply by application into transportation and power generation. Out of which, the transportation segment is anticipated to garner the highest revenue by the end of 2035. The growth of the segment can be attributed to growing urbanization. Approximately 4.4 billion people, or 56% of the world's population, reside in urban areas. By 2050, approximately 7 out of 10 people would live in cities, with the urban population predicted to more than double from its current size. The demand for transportation grows along with the population of metropolitan regions. Whether it's for business, school, or recreational purposes, people need to be able to move around in cities. Public transport networks, including bus systems and others, have expanded as a result of this. However, the transportation sector contributes significantly to greenhouse gas emissions, and the usage of second-generation biofuels could help reduce these emissions. Since they are produced from renewable energy resources and may reduce reliance on non-renewable resources such as oil, biofuels are seen as a more environmentally friendly alternative to fossil fuels.

The global second-generation biofuels market is also segmented and analyzed for demand and supply by process into biochemical process, and thermochemical process. Amongst which, the thermochemical process segment is expected to have the highest growth over the forecast period. The manufacturing of second-generation biofuels heavily relies on thermochemical processes. Non-food feedstocks, including forestry and agricultural waste, may be converted into biofuels quite effectively using thermochemical techniques. Second-generation biofuels may be produced from a range of non-food feedstocks, unlike first-generation biofuels, which are primarily made from food crops. This helps to prevent competition with food production. Moreover, biofuels with a high energy density could be created using thermochemical processes, making them ideal for use in transportation-related applications. Gasification and pyrolysis are instances of thermochemical processes that could produce biofuels with energy densities that are comparable to or even surpass those of fossil fuels.

Our in-depth analysis of the global second-generation biofuels market includes the following segments:




     By Feedstock

  • Simple Lignocellulose
  • Complex Lignocellulose
  • Syngas
  • Algae


     By Application

  • Transportation
  • Power Generation



     By Type

  • Cellulosic Ethanol
  • Biodiesel
  • Bio Butanol
  • Bio DME


     By Process

  • Biochemical Process
  • Thermochemical Process


Global Second-Generation Biofuels Market Regional Synopsis


Second-generation biofuels market share in North America, amongst the market in all the other regions, is projected to have the highest growth by the end of 2035, backed by growing food waste, along with growing population. In America, the amount of food waste has risen dramatically in recent years, with about 102 million tons (approximately 205 billion pounds) produced in 2018. Moreover, the governments of the US and Canada have both put laws and rules into place to encourage the development and use of second-generation biofuels. For instance, the US's Renewable Fuel Standard (RFS), which mandates a specific percentage of renewable fuels in petrol and diesel, and Canada's Clean Fuel Standard (CFS), which strives to lower the lifecycle carbon intensity of transportation fuels. Additionally, the creation of cellulosic ethanol and biogas, among other technological developments, have improved the efficiency and cost-effectiveness of second-generation biofuel production. Further, many sectors are looking at using biofuels to lower their carbon impact, including shipping and aviation. As a result, there is now more demand in North America for second-generation biofuels.

The Asia Pacific second-generation biofuels market is estimated to be the second largest, to have the highest growth over the forecast period. Second-generation biofuel use may help in lowering greenhouse gas emissions and enhancing air quality, two key environmental concerns in many Asia Pacific nations. Hence, its demand is growing. Additionally, for the creation of second-generation biofuels, the Asia Pacific region offers an abundance of biomass resources, including agricultural waste, forestry waste, and municipal solid waste. Moreover, in order to boost the production and use of second-generation biofuels in Asia Pacific, there is growing interest in regional cooperation. Governments and private enterprises are investing in the creation of new technologies and manufacturing processes, and there is a rising focus on innovation and research in the area of second-generation biofuels in the Asia Pacific region.

Additionally, the second-generation biofuels market in Europe region is also estimated to have the significant growth over the forecast period. The growth of the market in Europe region could be attributed to growing adoption of private vehicles owing to the growing disposable income of the people. However, people in this region are also getting environment conscious regarding growing emission of greenhouse gasses in the environment. Hence, they demand for renewable alternative such are second-generation biofuels. Also, the growing government initiatives is also influencing demand for second-generation biofuels.

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Top Featured Companies Dominating the Global Second-Generation Biofuels Market

    • Abengoa S.A.
      • Company Overview
      • Business Strategy
      • Key Product Offerings
      • Financial Performance
      • Key Performance Indicators
      • Risk Analysis
      • Recent Development
      • Regional Presence
      • SWOT Analysis
    • DuPont de Numours, Inc.
    • Novozymes
    • BP p.l.c.
    • POET, LLC.
    • Renewable Energy Group
    • Gevo Inc.
    • Enerkem Inc.
    • Amyris, Inc.
    • Solazyme Inc.


In The News

  • AgroFresh, a global leader in post-harvest freshness solutions, and Novozymes, a top biotech company, were creating a research and commercialization relationship to create biological solutions that could enhance post-harvest food quality and reduce waste by combating fungal diseases. The environment would profit from the finished products, which were anticipated to be created for post-harvest uses. Growers, retailers, and consumers would also gain from them.
  • The world's largest producer of biofuel, POET, LLC., commended the legislation's introduction in order to give more Michigan drivers cheaper, cleaner options at the petrol station.


Global Economic Impact

Request Insights
Despite Inflation & Fearing Recession, Businesses Across the Globe Expected to Do Better in 2023:

In 2023, market players might incur losses due to huge gap in currency translation followed by contracting revenues, shrinking profit margins & cost pressure on logistics and supply chain.
Controlling Inflation has become the first priority for global economies from last quarter of 2022 and to be followed in 2023. With skewed economic situations, rise in interest rate by governments to control spending and inflation, spiked oil and gas prices, high inflation, geo-political issues including U.S. & China trade war, Russia-Ukraine conflict to intensify the global economic issues.
The interest rates in the U.S. may be less sensitive in 2023 as compared to 2022; sigh of relief for businesses. Positive business sentiments, healthy business balance sheets, growth in construction spending (private construction value in 2022 stood at $1,429.2 billion, 11.7 percent (±1.0 percent) above the $1,279.5 billion spent in 2021, Residential construction in 2022 was $899.1 billion, up by 13.3 percent (±2.1 percent) from $793.7 billion in 2021, non-residential construction touched $530.1 billion, 9.1 percent (±1.0 percent) above the $485.8 billion in 2021.) showcases minimal impact of recession in the country.
Similarly, spiked spending in the European and major Asia economics including, India, China & Japan to showcase less impact on the global demand.

Author Credits:  Payel Roy, Dhruv Bhatia

Key Questions Answered in the Report

1) What are the major factors driving the growth of the second-generation biofuels market?

Ans: The major factors driving the growth of the market are growing demand for vehicles, rise in generation of electricity, surge in government initiatives to use biofuels, and others.

2) What would be the CAGR of second-generation biofuels market over the forecast period?

Ans: The market size of second-generation biofuels is anticipated to attain a CAGR of ~25% over the forecast period, i.e., 2023 – 2035.

3) What are the challenges affecting the second-generation biofuels market growth?

Ans: High production costs, lack of availability of feedstocks, and policy uncertainty are estimated to be the growth hindering factors for the market expansion.

4) Which region will provide more business opportunities for growth of second-generation biofuels market in future?

Ans: The market in the North American region is projected to hold the largest market share by the end of 2035 and provide more business opportunities in the future.

5) Who are the major players dominating the second-generation biofuels market?

Ans: The major players in the market are Abengoa S.A., DuPont de Numours, Inc., Novozymes, BP p.l.c., and more.

6) How are the company profiles selected?

Ans: The company profiles are selected based on the revenues generated from the product segment, the geographical presence of the company which determines the revenue generating capacity as well as the new products being launched into the market by the company.

7) What are the segments in the second-generation biofuels market?

Ans: The market is segmented by feedstock, application, type, process, and by region.

8) Which segment captures the largest market size in the application segment in the second-generation biofuels market?

Ans: The transportation segment is anticipated to garner the largest market size by the end of 2035 and display significant growth opportunities.

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