PUBLISHER: AnalystView Market Insights | PRODUCT CODE: 1720040
PUBLISHER: AnalystView Market Insights | PRODUCT CODE: 1720040
Transportation Biofuel Market size was valued at US$ 101,920.32 Million in 2024, expanding at a CAGR of 10.99% from 2025 to 2032.
Transportation biofuel refers to renewable fuels derived from biological sources, such as plants, agricultural waste, and algae, used to power vehicles. Common types include ethanol, made from corn or sugarcane, and biodiesel, produced from vegetable oils or animal fats. Advanced biofuels, like cellulosic ethanol and hydrotreated vegetable oil (HVO), offer improved efficiency and lower carbon emissions. Biofuels help reduce reliance on fossil fuels, decrease greenhouse gas emissions, and support energy security. Governments worldwide promote biofuel adoption through blending mandates, subsidies, and sustainability regulations. As technology advances, biofuels play a crucial role in decarbonizing the transportation sector and enabling cleaner mobility solutions.
Transportation Biofuel Market- Market Dynamics
Growing concerns about eco-friendly energy sources to propel market demand
Growing concerns about eco-friendly energy sources and a strong commitment to reducing carbon emissions in transportation are key drivers of market expansion. The advancement of second- and third-generation biofuels and improvements in biofuel production techniques enhance yield efficiency while addressing food security and resource competition. Efforts toward net-zero emissions are increasing private sector investment and corporate engagement, accelerating biofuel commercialization, particularly in sustainable aviation, marine transport, and heavy-duty industries. Stronger collaboration between biofuel producers and vehicle manufacturers is driving market penetration by enabling the development of compatible vehicles. The industry is shifting toward scalability through modular technologies and decentralized biorefineries, ensuring greater flexibility in production. Rising consumer awareness, demand for greener alternatives, and strategic partnerships are fostering innovation and improving market access. Additionally, integrating life cycle assessments and sustainability certification frameworks strengthens trust in biofuel products, reinforcing their adoption across various sectors.
Transportation Biofuel Market- Key Insights
As per the analysis shared by our research analyst, the global market is estimated to grow annually at a CAGR of around 10.99% over the forecast period (2025-2032)
Based on Fuel Type segmentation, ethanol was predicted to show maximum market share in the year 2024
Based on Feedstock segmentation, coarse grain was the leading Feedstock in 2024
On the basis of region, North America was the leading revenue generator in 2024
The Global Transportation Biofuel Market is segmented on the basis of Fuel Type, Feedstock, End Use, and Region.
The market is divided into three categories based on Fuel Type: Biodiesel, Ethanol and Others. The ethanol market segment is expected to dominate, driven by its effective fuel-blending properties and stringent government policies aimed at reducing emissions. The blending of gasoline with ethanol is increasingly favored as governments and industries seek to lower GHG emissions from fossil fuel combustion. Additionally, ethanol feedstock is playing a crucial role in the production of alcohol-to-jet (ATJ) fuels, aligning with the aviation sector's goals to reduce carbon emissions and adopt sustainable aviation fuel (SAF) strategies.
The market is divided into four categories based on Feedstock: Coarse Grain, Sugar Crop, Vegetable Oil and Others. The coarse grain feedstock segment is anticipated to experience the fastest growth. The ethanol industry heavily relies on corn, a leading coarse grain, making it the primary ethanol feedstock. This demand is reinforced by the Renewable Fuel Blends Policy, which promotes replacing fossil fuels with renewable alternatives. The Renewable Fuel Standard (RFS) further supports this growth. Additionally, technological advancements in agriculture have increased crop yields and reduced production costs, making ethanol a cost-effective option for coarse grain-based biofuels.
Transportation Biofuel Market- Geographical Insights
The market is divided into five regions: North America, Europe, Asia Pacific, Latin America, Middle East and Africa. North America is projected to lead the transportation biofuels market, driven by federal policies such as the RFS, which mandates higher ethanol and biodiesel consumption. Corn-based ethanol dominates the region, commonly used in E10 and E15 fuel blends. Meanwhile, renewable diesel production is expanding due to state-level initiatives, such as California's Low Carbon Fuel Standard (LCFS). Increasing investments in advanced biofuels, including cellulosic ethanol, are further propelling market growth as the transport sector moves closer to net-zero emissions.
Companies in the transportation biofuel market adopt several strategies to remain competitive amid evolving regulations, fluctuating feedstock availability, and increasing demand for sustainable energy solutions. A key approach is technological innovation, where firms invest in advanced biofuel production techniques, such as cellulosic ethanol, hydrotreated vegetable oil (HVO), and algae-based biofuels, to improve efficiency and reduce costs. Many companies also focus on strategic partnerships and collaborations with automotive manufacturers, research institutions, and energy firms to enhance product development and market penetration.
In November 2024, Neste signed a contract with Air Canada to supply 60,000 tons of Sustainable Aviation Fuel (SAF). This agreement supports Air Canada's carbon reduction efforts and aligns with its decarbonization goals for the aviation sector. The collaboration represents a significant step in advancing sustainable aviation practices, highlighting both companies' commitment to reducing environmental impact and fostering a greener future for the industry.