NEW YORK, Feb. 5, 2025 /PRNewswire/ -- Report on how AI is redefining market landscape - The global biofuels market size is estimated to grow by USD 26.6 billion from 2024-2028, according to Technavio. The market is estimated to grow at a CAGR of  3.23%  during the forecast period. Increased adoption of renewable sources of energy is driving market growth, with a trend towards research on third-generation biofuel called algae fuel. However, fluctuations in oil prices  poses a challenge. Key market players include Advance Biofuel, Alten SA, ALTO INGREDIENTS INC., Archer Daniels Midland Co., Argent Energy UK Ltd., BlueFire Renewables Inc., Bunge Ltd., Cargill Inc., Chevron Corp., ENERKEM Inc., KFS Biodiesel GmbH and Co. KG, Louis Dreyfus Co. BV, Munzer Bioindustrie GmbH, Neste Corp., POET LLC, RB FUELS, Shell plc, Valero Energy Corp., Vance Group Ltd., and Wilmar International Ltd..

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Market Driver

The biofuels market is on the rise as transport fuels become more sustainable. Policy design plays a key role in boosting biofuel production, with initiatives like the Renewable Fuel Standard and the RenovaBio scheme driving demand for renewable diesel, hydrogenated oil, ethanol, biodiesel, and biojet. Feedstocks like vegetable oil, Jatropha, molasses, coarse grain, and sugar crops are used to make these fuels, reducing greenhouse gas emissions and increasing energy efficiency. Biofuels offer energy security by decreasing oil imports and promoting cleaner fuels. Companies like Valero, Eco Energy, and RenovaBio are investing in biofuel research and development, focusing on feedstocks like algae-based biofuels and genetically modified yields. The transportation sector is transitioning towards sustainable aviation fuel and electric vehicles, with biojet and renewable diesel being crucial components. The inflation rate and oilfield discoveries influence the market, but environmental regulations and policy on biofuels ensure a sustainable future for this industry. 

First-generation biofuels are produced using vegetable oil, starch, sugar, and animal fats. These include fuels like biodiesel and ethanol. Second-generation biofuels, also known as advanced biofuels, are derived from non-food feedstocks. Examples include wood (sawdust), organic waste (corn stover), and specific biomass plants like jatropha, camelina, and switchgrass. Second-generation biofuels offer advantages over first-generation fuels as they do not compete with food production. The biofuel industry has advanced further with the emergence of third-generation biofuels. These fuels are derived from algae, which have the capability to produce diverse and high-quantity biofuels. Algae can yield fuels such as biodiesel, butanol, gasoline, methane, ethanol, vegetable oil, and jet fuels. Algae are a promising source for biofuels due to their fast growth rate and high productivity. 

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 Market Challenges

• The biofuels market is a significant player in the transport fuel sector, with renewable diesel and biodiesel being key alternatives to petroleum oil. However, the industry faces challenges in policy design and feedstock availability. Biofuel production from renewable sources like vegetable oil, Jatropha, molasses, coarse grain, and sugar crops is essential. Blending mandates for ethanol in gasoline and biodiesel in diesel are common, but energy efficiency and inflation rate are critical factors. The aviation sector is exploring sustainable aviation fuel (SAF) from biojet and renewable hydrogenated oil. SAF reduces greenhouse gas emissions, aligning with environmental regulations. Companies like Valero, Eco Energy, and RenovaBio are investing in biofuel research and production. Biojets, sustainable aviation, and renewable fuel are crucial for energy security and reducing oil imports. Biofuels from algae-based biofuels, cyanobacterial development, and genetically modified yields are promising. However, challenges include policy on biofuel, fossil fuels, and the inflation rate. Oilfield discoveries and prominent companies' investments can impact the market. The transportation sector's shift towards electric vehicles may affect the demand for liquid biofuels and biomass. Overall, the biofuels market requires a balanced approach to policy, feedstock availability, and technological innovation.
• The biofuels market faces significant competition from conventional fossil fuels, with the global oil and gas industry heavily reliant on crude oil prices. Volatility in these prices, which have seen numerous highs and lows in recent years, poses a challenge for the entire petroleum industry, including biofuels. This industry's growth has slowed due to the unpredictable nature of crude oil markets. Given biofuels' relatively small share in global fuel consumption, these market fluctuations could have a substantial impact on their market trajectory in the forecast period.

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Segment Overview 

This biofuels market report extensively covers market segmentation by  

• Application
• Transportation
• Aviation
• Heating
• Energy Generation
• Others
• Product
• Ethanol
• Biodiesel
• Geography
• North America
• Europe
• APAC
• South America
• Middle East And Africa

1.1 Transportation-  The global biofuels market in the transportation sector refers to the production, distribution, and consumption of biofuels as an alternative to traditional fossil fuels, primarily in the transportation industry. Biofuels are derived from renewable sources such as plants, algae, and organic waste, and they are used to power various vehicles, including cars, trucks, ships, and airplanes. The biofuels market has experienced substantial growth over the last decade due to rising concerns about climate change, the need to decrease greenhouse gas emissions, and the pursuit of energy security. Two primary types of biofuels used in transportation are ethanol, derived from crops like corn and sugarcane, and biodiesel, produced from vegetable oils, animal fats, and recycled cooking oil. Advanced biofuels, such as cellulosic ethanol and algae-based fuels, are also being developed and show potential. The market's dynamics are influenced by factors such as government policies, feedstock availability and prices, technological advancements, and consumer demand. Fluctuations in crude oil prices can also impact biofuels' competitiveness. Overall, the global biofuels market in the transportation sector is driven by environmental concerns, government policies, and the need for energy diversification. As renewable energy sources gain significance, biofuels are expected to play a significant role in the transition towards a more sustainable transportation system in the forecast period.

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Research Analysis

Biofuels have emerged as a promising alternative to traditional transport fuels, derived from renewable sources such as vegetable oil, Jatropha, molasses, coarse grain, sugar crops, and biomass. Biofuels, including ethanol and biodiesel, reduce greenhouse gas emissions and contribute to energy security by decreasing reliance on oil imports. Biofuel production involves converting feedstocks like corn, sugarcane, and sugar beets into liquid biofuels using processes like fermentation and hydroprocessing. Renewable diesel, a hydrogenated oil, is another cleaner fuel option. Policy design, including blending mandates, plays a crucial role in promoting biofuel adoption. Environmental regulations continue to shape the biofuels market, with a focus on sustainable feedstock sourcing and reducing emissions. Algae-based biofuels and cyanobacterial development are emerging areas of research for future biofuel production. Overall, the biofuels market is a dynamic and evolving industry, driven by a need for cleaner, renewable sources of energy.

Market Research Overview

Biofuels have emerged as a promising alternative to traditional transport fuels, offering significant potential for reducing greenhouse gas (GHG) emissions in the transportation sector. Biofuels, including ethanol, biodiesel, renewable diesel, hydrogenated oil, biojet, and sustainable aviation fuel, are derived from renewable sources such as biomass, vegetable oil, jatropha, molasses, coarse grain, sugar crops, and even algae-based sources. Policy design plays a crucial role in the biofuels market, with blending mandates and incentives driving production. Biofuel production from sustainable sources is essential to ensure energy efficiency and minimize environmental impact. Renewable diesel and hydrogenated oil are increasingly popular due to their compatibility with existing infrastructure. The transportation sector, a significant contributor to global oil imports and GHG emissions, can benefit significantly from the adoption of cleaner fuels. The European Union's ReFuelEU Aviation and FuelEU Maritime initiatives aim to reduce oil imports and GHG emissions by promoting the use of renewable fuels. Biofuels offer energy security benefits and contribute to GHG reductions, making them an attractive alternative to fossil fuels. However, factors such as inflation rate, oilfield discoveries, and the policy environment can impact the biofuels market. Biofuel researchers continue to explore new technologies, including genetically modified yields and cyanobacterial development, to enhance efficiency and sustainability.

Table of Contents:

1 Executive Summary
2 Market Landscape
3 Market Sizing
4 Historic Market Size
5 Five Forces Analysis
6 Market Segmentation

• Application
• Transportation
• Aviation
• Heating
• Energy Generation
• Others
• Product
• Ethanol
• Biodiesel
• Geography
• North America
• Europe
• APAC
• South America
• Middle East And Africa

7 Customer Landscape
8 Geographic Landscape
9 Drivers, Challenges, and Trends
10 Company Landscape
11 Company Analysis
12 Appendix

About Technavio

Technavio is a leading global technology research and advisory company. Their research and analysis focuses on emerging market trends and provides actionable insights to help businesses identify market opportunities and develop effective strategies to optimize their market positions.

With over 500 specialized analysts, Technavio's report library consists of more than 17,000 reports and counting, covering 800 technologies, spanning across 50 countries. Their client base consists of enterprises of all sizes, including more than 100 Fortune 500 companies. This growing client base relies on Technavio's comprehensive coverage, extensive research, and actionable market insights to identify opportunities in existing and potential markets and assess their competitive positions within changing market scenarios.

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SOURCE Technavio