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

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

Transportation Biofuel Market size is poised to record 7.5% CAGR from 2023-2032, driven by the surge in R&D investments in biofuel production processes to improve efficiency, reduce costs, and utilize non-food sources for feedstock. For instance, in July 2023, renowned oil & gas company bp invested $10 million in WasteFuel for converting municipal and agricultural waste into bio-methanol in a bid to decarbonize hard-to-abate sectors, such as shipping. The rising collaboration between technology developers, fuel producers, and automotive companies is also helping to ramp up biofuel production while improving distribution networks and developing compatible engines and vehicles, adding to the market growth.

The transportation biofuel industry is segmented into fuel type, feedstock, and region.

In terms of fuel type, the industry share from the biodiesel segment may witness lucrative growth from 2023 to 2032. Biodiesel is environmentally friendly in comparison to conventional diesel as it produces fewer greenhouse gas emissions. The influx of stringent environmental regulations and incentives for renewable fuel usage are contributing to the demand for biodiesel due to the higher awareness of its lower carbon footprint. The rising technological advancements for improving the efficiency of biodiesel production processes will also drive the segment growth.

Based on feedstock, the transportation biofuel industry value from the coarse grain segment is expected to expand at robust CAGR from 2023-2032. The growth is due to the wide availability and cultivation of coarse grains like corn, barley, and sorghum in many regions along with their rising demand as feedstock options for biofuel production to ensure a consistent and reliable supply. Coarse grains contribute to energy security as they reduce the dependency on fossil fuels and limit the reliance on imported petroleum for enhancing domestic energy production. The rising government support for coarse grain-derived biofuels will favor the segment expansion.

Regionally, the Asia Pacific transportation biofuel market size is projected to witness lucrative CAGR through 2032 due to the higher infrastructure investments for biofuel production, storage, and distribution. With established targets to reduce carbon emissions, several governments in the region are implementing policies, such as blending mandates, tax incentives, and subsidies for promoting the use of biofuels as alternatives to conventional fossil fuels. The ongoing R&D efforts for improving the efficiency of biofuel production processes along with the rising push for renewable energy sources due to climate change concerns will add to the regional market growth.