Biofuels Market Report 2026

The biofuels market size has grown strongly in recent years. It will grow from $187.83 billion in 2025 to $202.24 billion in 2026 at a compound annual growth rate (CAGR) of 7.7%. The growth in the historic period can be attributed to government biofuel blending mandates, volatility in crude oil prices, agricultural surplus utilization, early environmental regulations, rural energy security initiatives.

The biofuels market size is expected to see strong growth in the next few years. It will grow to $276.81 billion in 2030 at a compound annual growth rate (CAGR) of 8.2%. The growth in the forecast period can be attributed to net zero emission targets, rising demand for sustainable aviation fuel (SAF), advancements in enzyme and fermentation technologies, increased investment in second generation biofuels, expansion of carbon credit markets. Major trends in the forecast period include advanced bio-refining processes, waste-to-fuel conversion expansion, renewable diesel adoption growth, sustainable aviation fuel scaling, feedstock diversification strategies.

The rising demand for energy in the transportation sector is expected to propel the growth of the process oil market going forward. The transportation sector refers to the industry involved in the movement of people and goods from one place to another. Biofuels can be used as an alternative or blend with traditional fuels in the transportation industry, reducing the carbon footprint and meeting regulatory requirements for cleaner energy sources. For instance, in September 2023, the International Air Transport Association (IATA), a Canada-based trade association representing the airline industry, reported a significant increase in total traffic for July 2023, with a 26. 2% rise compared to July 2022, resulting in the highest-ever recorded July revenue passenger kilometers (RPKs). Therefore, the rising passenger traffic in the transportation sector is expected to propel the growth of the biofuels market.

Major companies in the biofuels market are focusing on developing innovations such as biocrude upgrading processes to enhance efficiency, fuel quality, and cost-effectiveness in renewable fuel production. Biocrude upgrading processes transform agricultural and forestry biomass into a low-cost, high-quality intermediate that can be further refined into sustainable aviation fuel (SAF), marine fuel, or gasoline, similar to how modular systems streamline conversion and optimize resource utilization. For example, in October 2025, Honeywell International Inc., a U.S.-based technology and manufacturing company, introduced its biocrude upgrading technology. This process facilitates smoother biomass-to-fuel conversion, improves overall fuel yields, and supports decarbonization efforts across aviation and other transportation sectors. The technology is designed to be scalable and compatible with existing refining infrastructure, enabling rapid deployment across multiple production sites.

In August 2024, Trafigura Group Pte Ltd, a Singapore-based global commodity trading and energy logistics provider, completed the acquisition of Greenergy’s European and Canadian supply businesses from Brookfield Asset Management and its affiliate Brookfield Business Partners for an undisclosed amount. Through this acquisition, Trafigura aimed to strengthen its biofuels supply and distribution operations across Europe and Canada by integrating Greenergy’s manufacturing and supply infrastructure into its broader fuels business, supporting the expansion of lower-carbon transportation fuels. Greenergy Limited is a UK-based road fuel supplier and a major European biodiesel producer, operating biofuel blending and manufacturing facilities in the UK and the Netherlands while serving commercial and wholesale markets internationally.

Major companies operating in the biofuels market are The Archer-Daniels-Midland Company, Abengoa S. A., Renewable Energy Corporation, Wilmar International Limited, Poet LLC, Praj Industries Limited, Raven SR Inc., Shell PLC, Sustainable Oils, UPM-Kymmene Oyj, Velocys Inc., Virent Energy Systems Inc., Aemetis Inc., Amyris Inc., Anellotech Inc., Avantium Technologies B. V., Axens Technologies (IFP), Cargill Inc., Chevron Corporation, Clariant International AG, Corbion N. V., DG Fuels, Diamond Green Diesel LLC, Dimeta, DMC Biotechnologies Inc., Enerkem Inc., Fidelis New Energy LLC, Fluid Quip Technologies LLC, Genofuel, Gevo Inc., GranBio, Green Plains Inc., Haldor Topsoe A/S, Honeywell International Inc.

North America was the largest region in the biofuel market in 2025. Asia-Pacific is expected to be the fastest-growing region in the forecast period. The regions covered in the biofuels market report are Asia-Pacific, South East Asia, Western Europe, Eastern Europe, North America, South America, Middle East, Africa. The countries covered in the biofuels market report are Australia, Brazil, China, France, Germany, India, Indonesia, Japan, Taiwan, Russia, South Korea, UK, USA, Canada, Italy, Spain.

The biofuel market consists of sales of methanol, butanol and biogas. Values in this market are ‘factory gate’ values, that is the value of goods sold by the manufacturers or creators of the goods, whether to other entities (including downstream manufacturers, wholesalers, distributors and retailers) or directly to end customers. The value of goods in this market includes related services sold by the creators of the goods.

The market value is defined as the revenues that enterprises gain from the sale of goods and/or services within the specified market and geography through sales, grants, or donations in terms of the currency (in USD unless otherwise specified).

The revenues for a specified geography are consumption values that are revenues generated by organizations in the specified geography within the market, irrespective of where they are produced. It does not include revenues from resales along the supply chain, either further along the supply chain or as part of other products.

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