Alternate Fuel and Raw Materials (AFR) For Oil and Gas Industry - Market Share Analysis, Industry Trends & Statistics, Growth Forecasts (2026 - 2031)

According to Mordor Intelligence, the alternate fuel and Raw Materials Market For Oil & Gas Industry size is projected to expand from USD 1.04 billion in 2025 and USD 1.12 billion in 2026 to USD 1.58 billion by 2031, at a CAGR of 7.12% between 2026 and 2031.

This report is Segmented by AFR Type (Recovered Hydrocarbon Fuel, Solid Recovered Fuel, and Other Types), End Users (Integrated Oil and Gas Companies, Drilling Contractors, and Other End Users), and Geography (North America, Europe, Asia-Pacific, South America, and the Middle East and Africa). The Market Forecasts are Provided in Terms of Value (USD).

Insights and Trends of Alternate Fuel and Raw Materials (AFR) Market For Oil and Gas Industry

Growing Volumes of Drilling and Production Waste

Oil-based cuttings commonly contain 15-25% oil and 60-80% solids, so they combine a disposal challenge with recoverable hydrocarbons. A study of waste oil-based drilling mud from China's Yanchang Oilfield achieved 95.6% oil recovery through chemical demulsification and mechanical dehydration. The reported operating cost was USD 8.1 per cubic meter, below the USD 9.1 per cubic meter benchmark cited for conventional pyrolysis. As drilling activity expands in Asia-Pacific and Latin America, waste volumes can outpace centralized disposal capacity. The alternate fuel and raw materials (AFR) market for oil and gas, therefore, has a stronger case for recovery systems that are considered during field planning. On-site pre-processing can reduce the amount of waste that must be transported to a certified facility.

Recovery of Hydrocarbons From Oil-Based Drilling Waste

Hydrocarbon recovery is increasingly treated as a source of usable fuel and raw material rather than only a remediation step. A U.S. patent granted in November 2025 describes a system that separates solids, water, and multiple hydrocarbon fractions from drilling waste in a self-sustaining process. The system is intended to reduce atmospheric gas emissions while creating inputs for alternative fuel or petrochemical uses. Field-scale treatment systems and active intellectual property indicate that recovery methods are moving beyond small demonstrations. This gives drilling contractors and independent producers more options for handling oil-based mud before it leaves the site, rather than treating transport as the only practical response. The alternate fuel and raw materials (AFR) market for oil and gas benefits when recovered base oil can meet a consistent specification for industrial use.

High Treatment Costs for Remote and Offshore Operations

Remote and offshore operations face higher treatment costs than land-based sites because waste must often be transported to certified facilities. Marine logistics, handling, and compliance requirements raise the cost of centralized processing. A Society of Petroleum Engineers paper reported base-oil recovery of 60-81% from spent drilling fluids using heat and pressure without chemical additives. The method remains in commercial scale-up, so many operators still depend on thermal desorption and shipment. A 2026 study estimated USD 170,000 of capital investment for a modular system that processes 2,000 cubic meters per well. The alternate fuel and raw materials (AFR) market for oil and gas, therefore, is divided between established basins that can support on-site equipment and frontier areas that retain costly shore-based logistics.

Other drivers and restraints analyzed in the detailed report include:

1. Stricter Waste-Disposal and Zero-Discharge Requirements
2. Refinery Decarbonization and Alternative Feedstock Adoption
3. Hazardous-Component Variability in Oil and Gas Waste

For complete list of drivers and restraints, kindly check the Table Of Contents.

Segment Analysis

Recovered Hydrocarbon Fuel held 31.8% of the alternate fuel and raw materials (AFR) market for oil and gas market size in 2025. Its energy density and compatibility with cement kilns, refinery heaters, and industrial burners reduce the need for offtake customers to alter existing equipment. This compatibility supports use in operations that need a dependable fuel specification. Large volumes of base oil and synthetic drilling fluid residues from North American and North Sea operations also support established collection and upgrading networks. These networks allow recovered material to reach fuel-grade quality before it is supplied to end users.

Alternative Engineered Fuel is forecast to expand at a 7.9% CAGR from 2026 to 2031. Blending and pre-processing improvements allow mixed oil and gas waste fractions to be formulated into more consistent fuels. This increases the usable share of material that was previously rejected because its heating value was inconsistent. Refuse-Derived Fuel remains a secondary option where nonhazardous industrial waste is collected alongside oil field operational waste. Solid Recovered Fuel remains relevant in Europe, where non-landfill routes are encouraged, and China's GB/T 35170-2024 standard has supported cement-kiln co-processing since February 2025. A study of SRF and RDF composition found that material classified under UNI EN 15359 can produce lower sulfur dioxide footprints than conventional fossil fuels. Recovered Waste Oil is used in industrial heating and lower-specification blendstock applications, while recovered synthetic fluids and spent process chemicals remain smaller, specialized volumes.

Complete Report Scope:

• By AFR Type
  • Recovered Hydrocarbon Fuel
  • Alternative Engineered Fuel
  • Refuse-Derived Fuel
  • Solid Recovered Fuel
  • Recovered Waste Oil
  • Other AFR Types
• By End User
  • Integrated Oil and Gas Companies
  • National Oil Companies
  • Independent Exploration and Production Companies
  • Drilling Contractors
  • Oilfield-Service Companies
  • Other End-Users
• By Geography
  • North America
    • United States
    • Canada
    • Mexico
  • Europe
    • Germany
    • France
    • Italy
    • Spain
    • United Kingdom
    • Poland
    • Russia
    • Rest of Europe
  • Asia-Pacific
    • China
    • India
    • Japan
    • South Korea
    • Australia
    • Indonesia
    • Vietnam
    • Thailand
    • Rest of Asia-Pacific
  • South America
    • Brazil
    • Argentina
    • Chile
    • Rest of South America
  • Middle East and Africa
    • Saudi Arabia
    • United Arab Emirates
    • Egypt
    • South Africa
    • Morocco
    • Rest of Middle East and Africa

Geography Analysis

Europe held 37.6% of the alternate fuel and raw materials (AFR) market for oil and gas market share in 2025. The region has a dense network of co-processing facilities and a regulatory framework that favors waste-derived fuels over landfill routes. Germany, the Netherlands, Belgium, France, and the United Kingdom have important industrial offtake infrastructure. The revised Industrial Emissions Directive increases the emphasis on emission limits and environmental management at industrial installations. This can raise the compliance burden on waste generators while requiring higher quality standards from AFR producers.

Asia-Pacific is forecast to advance at an 8.8% CAGR from 2026 to 2031. Upstream additions in Indonesia, Vietnam, India, and China are increasing drilling-waste volumes faster than local compliant disposal capacity. China's GB/T 35170-2024 standard expanded the basis for using preprocessed combustible material in cement-kiln co-processing from February 2025. This regulatory base is important because cement kilns provide a potential outlet for qualifying materials, particularly when local processing networks can meet required technical specifications. South Korea and Japan also contribute demand through strict waste-oil reprocessing rules and high-specification industrial heating-fuel requirements.

North America is the second-largest regional position, supported by waste volumes from the Permian Basin, Gulf of Mexico, and Canadian oil sands. Compliance under U.S. waste and effluent rules supports demand for approved oil field waste processing. South America is developing through Brazil's Future Fuel Law and Petrobras's USD 1.2 billion RPBC investment, which targets renewable fuels by 2030. The Middle East and Africa include national oil company programs that treat waste recovery as both a compliance and resource-security issue. The alternate fuel and raw materials (AFR) market for oil and gas in these regions is shaped by the availability of qualified processing sites near upstream operations.

1. Biffa Limited
2. Blue Phoenix Group
3. Clean Harbors, Inc.
4. Covanta Holding Corporation (Reworld)
5. EEW Energy from Waste GmbH
6. Enva Group Limited
7. FCC Servicios Medio Ambiente Holding, S.A.U.
8. Geocycle SA
9. Heidelberg Materials AG
10. Holcim Ltd
11. Indaver NV
12. N+P Group B.V.
13. PreZero International GmbH
14. Ragn-Sells AB
15. REMONDIS SE & Co. KG
16. Renewi plc
17. SARIA SE & Co. KG
18. SUEZ S.A.
19. Tradebe Environmental Services, LLC
20. Veolia Environnement S.A.
21. Viridor Limited

Additional Benefits:

• The market estimate (ME) sheet in Excel format
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