Biofuel Market Size - By Fuel Type (Biodiesel, Ethanol), Feedstock (Coarse Grain, Sugar Crop, Vegetable Oil), Application (Transportation, Aviation) & Forecast, 2023 - 2032

Biofuel Market Size - By Fuel Type (Biodiesel, Ethanol), Feedstock (Coarse Grain, Sugar Crop, Vegetable Oil), Application (Transportation, Aviation) & Forecast, 2023 - 2032

Biofuel market size is projected to expand at 6.6% CAGR from 2023 to 2032, driven by the rising global emphasis on sustainable energy sources, reducing carbon emissions, and diminishing reliance on fossil fuels.

The influx of government mandates and incentives is driving the incessant need to achieve renewable energy goals, fueling the adoption of biofuels. For instance, in September 2023, India launched the Global Biofuel Alliance (GBA) initiative during the G20 Summit as a transformative step in the global energy landscape to increase ethanol blending in petrol to 20%. Additionally, the increasing advancements in biofuel production technologies is resulting in the exploration of diverse feedstocks. The push for energy security, the desire to create jobs in the renewable energy sector, and the development of advanced biofuels will also drive the industry growth.

The biofuel industry is categorized into fuel type, feedstock, application, and region.

Based on fuel type, the industry value from the biodiesel segment is projected to increase at substantial CAGR through 2032, owing to the rising demand for cleaner alternatives to traditional diesel. The increasing advancements in production technologies along with the surge in environmental concerns will fuel the demand for biodiesel in the coming years.

The sugar crop feedstock segment is estimated to withhold commendable share of the biofuel industry by 2032. The growth is due to the increasing utilization of sugar crops, such as sugarcane and sugar beet for biofuel production. These feedstocks offer a sustainable and economically viable source, adding to the segment expansion.

In terms of application, the market share from the aviation segment is slated to reflect appreciable CAGR during 2023-2032. This is fueled by the ongoing efforts of the aviation sector to reduce carbon emissions. The high demand for sustainable aviation fuels (SAFs) derived from biofuels coupled with the thriving regulatory support and commitments to environmental sustainability will push the segment growth forward.

Regionally, the Europe biofuel industry is slated to expand at robust CAGR between 2023 and 2032, driven by the increasing focus on renewable energy and the ingress of government incentives for promoting the product adoption. The rising awareness towards the reduction of carbon footprint to align to the sustainability goals will further bolster the regional market growth.