Biofuels market seen reaching $476.12 billion by 2035

The global biofuels market is projected to grow to $476.12 billion by 2035, driven by second-generation fuels, tighter decarbonization rules and rising demand in transport and aviation. The outlook points to stronger adoption of renewable alternatives as governments, refiners and airlines push to cut emissions and secure fuel supply.

Why it matters: - Biofuels are becoming a larger part of the global energy mix as governments and industry look for lower-carbon alternatives to fossil fuels. - The market forecast signals growing demand across road transport, aviation, shipping, power generation and industrial heating. - The shift matters most for hard-to-abate sectors, where sustainable fuels can help cut emissions without waiting for a full electrification buildout.

What happened: - Market Research Future said the biofuels market is forecast to reach $476.12 billion by 2035. - The forecast implies a 14.0% compound annual growth rate from 2026 to 2035. - The report points to advancements in second-generation biofuels as a key growth driver. - The firm released a free sample report here. - The full report is available here.

The details: - Biofuels are made from organic materials including plant biomass, agricultural residues, animal fats and municipal waste. - The market includes bioethanol, biodiesel, renewable diesel and sustainable aviation fuels. - Solid biofuels, including wood pellets, chips and agricultural residues, account for about two-thirds of modern bioenergy use globally. - Liquid biofuels are the fastest-growing segment. - Global liquid biofuel production reached 170 billion liters in 2022. - That output met about 3.5% of transport energy requirements. - First-generation biofuels hold nearly 90% market share. - Second-generation fuels use non-food biomass such as agricultural residues, forestry waste and municipal solid waste. - Second-generation production is projected to reach 30 million metric tons by 2030. - Transportation remains the largest application area. - Road transport leads demand, while sustainable aviation fuel is emerging as a high-growth segment.

Between the lines: - The market is being pushed by policy, not just technology. - The European Union's Renewable Energy Directive III sets a 14% renewable energy share in transport by 2030. - The U.S. Renewable Fuel Standard continues to support advanced biofuel adoption. - More than 70 countries now have biofuel blending mandates. - Brazil's RenovaBio program uses carbon credits to encourage low-carbon fuel production. - India's E20 ethanol blending target is adding demand in a major emerging market. - The report also highlights a supply-side constraint: demand for vegetable oils, waste oils and fats is projected to rise 56% from 2022 to 2027. - Advanced biofuels still face higher production costs than fossil fuels. - Land-use change, biodiversity impacts and food-security concerns remain part of the industry debate.

What's next: - The report expects sustainable fuel demand to more than triple over the next two decades, with road transport leading growth through 2035. - Aviation and maritime adoption should accelerate as net-zero targets tighten. - North America is expected to stay a major market because of mandates, feedstock supply and investment in second-generation biorefineries. - Europe should keep expanding advanced biofuel capacity under its transport renewable target. - Asia-Pacific is projected to be the fastest-growing regional market, with a 15% CAGR through 2034. - Companies are likely to keep investing in refineries, joint ventures, digital optimization and feedstock flexibility. - The report cites a 40% increase in investment in biorefineries processing agricultural residues and organic waste since 2020. - Phillips 66 is investing in its Rodeo refinery in California to process bio-based feedstocks.

The bottom line: - Biofuels are moving from a niche alternative to a core decarbonization tool, with second-generation fuels and sustainable aviation fuel doing much of the heavy lifting.