PUBLISHER: The Business Research Company | PRODUCT CODE: 1929114
PUBLISHER: The Business Research Company | PRODUCT CODE: 1929114
Second generation biofuels, also known as advanced biofuels, represent a category of renewable fuels derived from non-food feedstock. These biofuels offer significant advantages over first generation biofuels and are designed to address limitations and issues associated with the latter, such as the use of food crops and potential indirect land-use change.
The primary types of second-generation biofuels include cellulosic ethanol, biodiesel, bio-butanol, bio-dimethyl ether (DME), and others. Cellulosic ethanol is a biofuel produced from cellulose, a complex carbohydrate found in plant cell walls. These biofuels are manufactured through biochemical and thermochemical processes, utilizing various feedstocks such as simple lignocellulose, complex lignocellulose, syngas, algae, and others. Second generation biofuels find applications in transportation, power generation, and other sectors.
Tariffs have affected the second generation biofuels market by increasing costs of imported processing equipment, enzymes, and specialized catalysts. Higher duties have impacted biochemical and thermochemical processing facilities, particularly in emerging economies dependent on imported technology. Production costs and commercialization timelines face pressure. On the positive side, tariffs are supporting domestic biofuel equipment manufacturing, local feedstock utilization, and long-term energy independence goals.
The second generation biofuels market research report is one of a series of new reports from The Business Research Company that provides second generation biofuels market statistics, including second generation biofuels industry global market size, regional shares, competitors with a second generation biofuels market share, detailed second generation biofuels market segments, market trends and opportunities, and any further data you may need to thrive in the second generation biofuels industry. This second generation biofuels market research report delivers a complete perspective of everything you need, with an in-depth analysis of the current and future scenario of the industry.
The second generation biofuels market size has grown exponentially in recent years. It will grow from $13.42 billion in 2025 to $16.75 billion in 2026 at a compound annual growth rate (CAGR) of 24.8%. The growth in the historic period can be attributed to concerns over food based biofuels, environmental regulations, government biofuel mandates, availability of agricultural residues, research in biofuel technologies.
The second generation biofuels market size is expected to see exponential growth in the next few years. It will grow to $41.59 billion in 2030 at a compound annual growth rate (CAGR) of 25.5%. The growth in the forecast period can be attributed to net zero emission targets, demand for sustainable fuels, advancements in conversion efficiency, expansion of renewable energy policies, investments in bio-refineries. Major trends in the forecast period include rising use of non food feedstocks, growth in cellulosic ethanol production, expansion of advanced biodiesel technologies, increasing focus on low carbon fuels, scaling of thermochemical conversion processes.
The growing use of biofuels for their environmental benefits is expected to drive the expansion of the second-generation biofuels market in the coming years. Biofuels are liquid fuels derived from biological materials such as trees, agricultural residues, crops, or grasses. Their increasing adoption is attributed to their ability to substantially lower greenhouse gas emissions compared to fossil fuels, helping governments and industries achieve climate change mitigation and carbon reduction goals more effectively. The second-generation biofuels market facilitates this growth by producing fuels from non-food biomass and waste materials, which reduces lifecycle carbon emissions and environmental impact without competing with food resources. For example, in October 2025, the U.S. Energy Information Administration (EIA) reported that renewable diesel and other biofuels production capacity in the United States grew by just 391 million gallons per year in 2024. Consequently, the rising use of biofuels for environmental reasons is fueling the growth of the second-generation biofuels market.
Leading companies in the second-generation biofuels market are prioritizing strategic partnerships and collaborations, including joint ventures, to strengthen their competitive position. Joint ventures involve two or more companies forming a separate, jointly owned entity to pool resources, expertise, and investments to achieve common business or technological goals. For example, in April 2023, Compania Espanola de Petroleos S.A. (CEPSA), a Spain-based oil and gas company, collaborated with Bio-Oils Huelva S.L.U., a Spain-based biodiesel producer, to create a joint venture focused on developing advanced second-generation biofuels. This initiative includes building the largest 2G biofuel production facility in southern Europe, featuring high-capacity processing, the use of non-food feedstocks, and substantially reduced lifecycle carbon emissions.
In September 2025, BTG Bioliquids BV, a Netherlands-based technology company specializing in fast pyrolysis systems for renewable fuels, partnered with NanosTech Technology & Innovations Ltd. to provide a comprehensive advanced biofuels solution. Through this collaboration, the companies aim to integrate their complementary technologies to scale the production of advanced, drop-in biofuels-enhancing capabilities for converting sustainable biomass into refinery-ready fuels such as sustainable aviation fuel (SAF), renewable diesel, and marine fuels, while expanding their joint presence in modular biorefinery deployment. NanosTech Technology & Innovations Ltd., a Canada-based technology company, specializes in proprietary Aquaprocessing (AQP) catalytic platforms that upgrade pyrolysis bio-oils into drop-in renewable fuel feedstocks.
Major companies operating in the second generation biofuels market are TotalEnergies SE, Reliance Industries Limited, INEOS Group Limited, The Andersons Inc., International Flavors & Fragrances Inc., Darling Ingredients Inc, DuPont Nutrition Biosciences ApS, Green Plains Inc, Flint Hills Resources LLC, Gevo Inc., Abengoa S.A., POET LLC, ICM Inc., Enerkem Inc., Advanced Enzyme Technologies Limited, Fulcrum BioEnergy Inc., LanzaTech Inc, Virent Energy Systems Inc., GranBio LLC, Algenol Biofuels Inc., Novamont S.p.A., Edeniq Inc., Mascoma Corporation, BlueFire Renewables Inc, Fiberight LLC., Clariant AG, Raizen S.A., Copersucar SA, Beta Renewables S.p.A., EcoCeres Inc.
North America was the largest region in the second-generation biofuels market in 2025. Asia-Pacific is expected to be the fastest-growing region in the forecast period. The regions covered in the second generation 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 second generation biofuels market report are Australia, Brazil, China, France, Germany, India, Indonesia, Japan, Taiwan, Russia, South Korea, UK, USA, Canada, Italy, Spain
The second generation biofuels market consists of sales of bio-synthetic natural gas, bioethanol, and bio methanol. 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.
Second Generation Biofuels Market Global Report 2026 from The Business Research Company provides strategists, marketers and senior management with the critical information they need to assess the market.
This report focuses second generation biofuels market which is experiencing strong growth. The report gives a guide to the trends which will be shaping the market over the next ten years and beyond.
Where is the largest and fastest growing market for second generation biofuels ? How does the market relate to the overall economy, demography and other similar markets? What forces will shape the market going forward, including technological disruption, regulatory shifts, and changing consumer preferences? The second generation biofuels market global report from the Business Research Company answers all these questions and many more.
The report covers market characteristics, size and growth, segmentation, regional and country breakdowns, total addressable market (TAM), market attractiveness score (MAS), competitive landscape, market shares, company scoring matrix, trends and strategies for this market. It traces the market's historic and forecast market growth by geography.
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