all report title image
  • Published In : May 2024
  • Code : CMI6988
  • Pages :132
  • Formats :
      Excel and PDF
  • Industry : Energy

Market Size and Trends

The liquid biofuels market is estimated to be valued at USD 89.18 Bn in 2024 and is expected to reach USD 137.68 Bn by 2031, growing at a compound annual growth rate (CAGR) of 6.4% from 2024 to 2031.

Liquid Biofuels Market Key Factors

To learn more about this report, request a free sample copy

With rising environmental concerns and stringent regulations promoting the usage of clean fuels, the demand for liquid biofuels is increasing steadily worldwide. Several governments are also offering incentives and subsidies for the production and usage of liquid biofuels to reduce dependency on fossil fuels. The liquid biofuels market is expected to witness significant growth over the forecast period. Key factors driving the market growth include the growing demand for clean and renewable sources of energy. Many countries across the world are shifting their focus towards the development and usage of sustainable fuels to lower carbon emissions. Moreover, initiatives by governments and international agencies to curb pollution levels are also boosting the adoption of liquid biofuels for transportation and other applications.

Increasing Concerns for the Environment

As climate change concerns continue to rise globally, the need for more sustainable fuel sources has become increasingly imperative. Liquid biofuels provide an attractive alternative to conventional fossil fuels due to their lower carbon footprint over their lifecycle. While all sources of energy have some environmental impact, biofuels can help reduce dependence on non-renewable oil reserves when produced responsibly through sustainable practices. Advanced biofuels produced from non-edible feedstock or agricultural residues have an even smaller carbon impact compared to conventional biofuels from food crops. International climate agreements and national renewable fuel policies aim to cut greenhouse gas emissions from the transport sector, driving the demand for low-carbon liquid biofuel blending and use. Consumer awareness of sustainability issues is also growing and influencing fuel purchases, giving a competitive edge to greener fuel options. The liquid biofuels industry is actively innovating processes to minimize resource use, maximize productivity and deliver fuels with net-zero or net-negative carbon profiles. This presents opportunities to tap synergies between energy security, environmental protection and rural development goals through optimized biofuel production chains.

Market Concentration and Competitive Landscape

Liquid Biofuels Market Concentration By Players

To learn more about this report, request a free sample copy

Incentivizing National Energy Security

Energy security remains a key priority for many nations seeking to hedge risks from fluctuating and potentially vulnerable international oil supply chains. Liquid biofuels derived from domestically sourced feedstock offer a strategic alternative that can boost self-reliance and insulate fuel needs from geopolitical uncertainties in oil markets. Supportive biofuel blending mandates and producer incentives from governments aim to increase the local economic viability and scale-up of renewable fuel sectors. While crude oil will remain integral to fuel supplies for the foreseeable future, even modest displacements through biofuels can strengthen energy security. Advanced technologies are also expanding the potential for renewable liquid fuels far beyond first-generation feedstock. Drop-in biofuel equivalents similar to conventional fuels in compositions further future-proof the transport sector against dependency on diminishing oil reserves alone. Investments in liquid biofuel production thus attract interests not just for commercial returns but as a complementary pathway strengthening long-term energy security through diversification and flexibility in fuel supply. This creates a supportive policy push sustaining demand momentum and investment climate for the growing biofuels market globally over the medium to long term.

Liquid Biofuels Market Key Takeaways From Lead Analyst

To learn more about this report, request a free sample copy

Market Challenge: Higher production costs than fossil fuels

The production of liquid biofuels from biomass requires large capital expenditure on setting up processing facilities as well as continued operating expenses. The biomass feedstock itself has a higher cost than fossil fuels like crude oil or natural gas. Producing biofuels also involves multi-step processing of the biomass which includes pre-treatment, enzymatic/chemical hydrolysis of cellulose and hemicellulose into fermentable sugars, fermentation of sugars into alcohols and separation and purification. All these steps are energy intensive and add to the overall costs.  Furthermore, the yields of biofuels obtained from biomass are generally lower than from fossil fuels. For example, it takes several kilograms of corn to produce just one gallon of corn ethanol compared to just one barrel of crude oil producing 19 gallons of gasoline. The lower yields effectively translate to higher biofuel production costs per unit of energy content. These costs have made liquid biofuels less competitive against conventional gasoline and diesel on an energy equivalent basis, thereby limiting their widespread adoption. For instance, in the U.S., corn ethanol typically costs USD 1-USD 2 more to produce per gasoline gallon equivalent than gasoline from crude oil, according to data from the U.S. Department of Energy's Bioenergy Technologies Office.

Market Opportunity: Second generation biofuels from non-food biomass

Second generation biofuels from non-food biomass have the potential to be a major opportunity in the liquid biofuels market going forward. Unlike first generation biofuels which use corn, sugarcane, or vegetable oils for fuel production, second generation biofuels are produced from non-edible plant matter such as agricultural residue, municipal solid waste, or purpose grown energy crops. These are more sustainable and environment friendly compared to the first generation biofuels which were often criticized for diversions of agricultural lands for fuel crops. This is impacting the global food supply and inflation in food prices. The use of lignocellulosic biomass which includes crop residues, wood wastes, and purpose grown energy crops like switchgrass for fuel production offers multiple advantages. It does not compromise on food security as non-edible plant parts are used. According to the U.S. Department of Energy, nearly a billion tons of renewable biomass is potentially available annually in the U.S. from agricultural and forest residues alone without impacting food, feed, and traditional product demands. Conversion technologies are also improving to efficiently break down the lignocellulose components of plant cell walls into simple sugars for fermentation into alcohols like ethanol. Several companies are actively working to commercialize these technologies through demonstration plants.

Liquid Biofuels Market By Type

To learn more about this report, request a free sample copy

Insights by Type: Global policy push towards renewable fuels drives the ethanol dominance

In terms of type, ethanol is expected to contribute 41.3% share of the market in 2024, owing to the global policy push towards renewable fuel adoption. Ethanol is one of the most widely used renewable fuels today, finding applications in gasoline fuel blends and as a general biofuel. Many countries have formulated policies that mandate the blending of gasoline with certain percentages of ethanol. For instance, the U.S. mandates a blend of 10% ethanol called E10 for all automotive fuels. The European Union also has a goal for vehicle fuels to comprise a minimum 10% share of renewable fuels by 2020.  This policy thrust stems from the environmental benefits of ethanol compared to conventional transportation fuels. As a biofuel, the production and combustion of ethanol results in a net reduction of greenhouse gas emissions. The feedstock for ethanol is also more sustainable than crude oil. With growing concerns around climate change and energy security, many governments are incentivizing the use of lower-carbon biofuels like ethanol through mechanisms like the Renewable Fuel Standard. Leading ethanol producers like the U.S., Brazil, and EU countries have ramped up their annual ethanol production capacities and blend mandates significantly over the past decade due to these policies.

Insights by Feedstock: Low input and land costs drives the sugarcane dominance in feedstock

In terms of feedstock, sugarcane is expected to contribute 33.5% share of the market in 2024, owing to its competitive advantages in terms of low input and land costs for cultivation. Sugarcane has the highest yield of fermentable sugar per unit area compared to other starch and sugar-bearing crops. With annual yields ranging from 50-80 tons per hectare, sugarcane produces significantly more fermentable sugar than corn or soy. Additionally, sugarcane cultivation requires modest irrigation and agrochemical requirements. Water needs for sugarcane are lower than field crops like corn. Likewise, its tropical and subtropical cultivation zones have fewer pest and disease problems compared to temperate grain belts. This translates to lower variable input costs for sugarcane farmers. Land prices are also cheaper in tropical countries with optimal climates for sugarcane farming. The combination of high tonnage yields per hectare and modest input needs makes sugarcane an extremely competitive biofuel feedstock. Over 80% of the ethanol produced in the largest producers Brazil is derived from sugarcane. The low costs of sugarcane-based ethanol production allows it to undercut corn and other biofuel feedstock on international markets even after factoring transportation expenses.

Insights by Process: Advanced biotechnology drives fermentation dominance in process

In terms of process, fermentation is expected to contribute 33.5% share of the market in 2024, owing to advanced biotechnological capabilities that enhance yields and lower production costs. Fermentation utilizes microbial action to convert the fermentable sugars present in biofuel feedstock into alcohol. Contemporary fermentation technologies deploy specialized yeasts and enzymes that have been optimized through genetic engineering for high performance. Modern fermentation facilities employ pure cultures of genetically enhanced Saccharomyces yeasts tailored for specific feedstock like sugarcane or corn. These "designer yeasts" have been re-engineered to achieve some of the highest ethanol yields biologically possible from available sugars. Simultaneously, fermentation processes leverage high-density cell cultures and finely-tuned nutrient environments to maximize yeast growth rates and titers.  Recent bioprocess innovations also focus on developing hyper-productive strains of yeasts and other microbes that can ferment cellulosic sugars. This expands the range of viable lower-cost feedstock beyond sugars to agricultural residues. When coupled with advanced pre-treatment technologies, cellulosic fermentation promises further reductions in ethanol costs. Owing to substantial biotechnological advancements over the past decades, fermentation has emerged as the most economically competitive industrial process for converting biomass into liquid biofuels at scale.

Regional Insights

Liquid Biofuels Market Regional Insights

To learn more about this report, request a free sample copy

The European Union remains the dominant player in the global liquid biofuels market, maintaining the largest market share over the past decade. The market is expected to account for 38.7% of the market share in 2024. Stringent environmental regulations promoting the use of renewable fuels for transportation have driven significant demand within the EU. All member states have adopted mandatory blending targets and incentives for producers and consumers. Popular fuels like biodiesel and bioethanol find widespread use in vehicles across the region due to supportive policies. Germany, France, and Italy account for over half of the EU's liquid biofuel consumption owing to their large vehicle fleets and emphasis on developing sustainable alternatives to petroleum. Leading car manufacturers like Volkswagen, Renault, and Fiat actively participate in the biofuels supply chain to meet corporate social responsibility goals. Numerous production facilities catering to the needs of these key importers have come up in countries like Spain, Poland, and Romania where feedstock is economically available. Cross-border trade of liquid biofuels has connected suppliers across the EU single market, enhancing competitiveness and energy security within the bloc.

Outside of the EU, Latin America has emerged as the fastest growing market for liquid biofuels internationally. The region has a combination of favorable climatic conditions and government incentives that have spurred major investments in sustainable fuel production from sugarcane and soybean feedstock. Brazil remains the dominant producer globally, with its sugarcane-based ethanol widely blended into gasoline. However, other countries like Argentina and Colombia are rapidly scaling up their exports of biodiesel and ethanol to capitalize on the growing demand. Strong production bases catering to international demand have given Latin America an edge over other developing regions in terms of scaling biofuel industries. This leadership position is expected to foster further technology transfers and partnerships that can drive future market expansion.

Market Report Scope

Liquid Biofuels Market Report Coverage

Report Coverage Details
Base Year: 2023 Market Size in 2024: US$ 89.18 Bn
Historical Data for: 2019 To 2023 Forecast Period: 2024 To 2031
Forecast Period 2024 to 2031 CAGR: 6.4% 2031 Value Projection: US$ 137.68 Bn
Geographies covered:
  • North America: U.S. and Canada
  • Latin America: Brazil, Argentina, Mexico, and Rest of Latin America
  • Europe: Germany, U.K., Spain, France, Italy, Russia, and Rest of Europe
  • Asia Pacific: China, India, Japan, Australia, South Korea, ASEAN, and Rest of Asia Pacific
  • Middle East & Africa: GCC Countries, Israel, and Rest of Middle East & Africa
Segments covered:
  • By Type: Ethanol, Biodiesel, and Others (Hydrotreated vegetable oil, etc.)
  • By Feedstock: Corn, Sugarcane, Soybean, Canola, and Others (Cellulosic biomass, etc.)
  • By Process: Fermentation, Transesterification, and Others (Hydro Heating, etc.)
  • By Application: Transportation Fuel, Marine, Others (Aviation, etc.), Power Generation, and Others (Thermal Heating, etc.) 
Companies covered:

The Archer-Daniels-Midland Company, Valero Energy Corporation, Green Plains Inc., Gevo, Chevron, Neste, TotalEnergies, Wilmar International Ltd, Enerkem, POET, Fulcrum BioEnergy, Inc., Alto Ingredients, Inc., Pacific Biodiesel, Südzucker AG, Emami Agrotech Limited, Chemical Construction International Limited, Khanda BioFule, BIOD TECHNOLOGY FZCO, Lootah Bio Fuels, and Neutral Fuels

Growth Drivers:
  • Increasing concerns for the environment
  • Incentivizing national energy security
Restraints & Challenges:
  • Higher production costs than fossil fuels
  • Limitations of feedstock availability

Key Developments

  • In April 2024, Jewish group launched Holocaust survivor speakers bureau to fight increasing antisemitism worldwide
  • In early 2024, the European Commission released the UDB Alignment to streamline and improve the biofuels sector
  • In early 2024, the European Commission updated the Revised Renewable Energy Directive to align with the latest regulations and sustainability goals
  • In September 2023, Prime Minister, Narendra Modi launched the Global Biofuels Alliance (GBA) at the G20 Summit in New Delhi, India. The GBA is a collaboration between 19 countries and 12 international organizations, including G20 members and non-member countries.
  • In 2020, BC Hemp Corporation announced USD 2 billion bioethanol plant for Prince George
  • *Definition: The liquid biofuels market involves the production and sale of liquid fuels derived from biomass or other renewable sources. This includes bioethanol, biodiesel, pyrolysis oils, biomethanol, and bio-butanol. These renewable fuels serve as alternatives to petroleum-based gasoline, diesel, and jet fuel and help reduce dependence on fossil fuels and greenhouse gas emissions from the transportation sector.

Market Segmentation

  • Type Insights (Revenue, USD Bn, 2019 - 2031)
    • Ethanol
    • Biodiesel
    • Others (Hydrotreated vegetable oil, etc.)
  •  Feedstock Insights (Revenue, USD Bn, 2019 - 2031)
    • Corn
    • Sugarcane
    • Soybean
    • Canola
    • Others (Cellulosic biomass, etc.)
  •  Process Insights (Revenue, USD Bn, 2019 - 2031)
    • Fermentation
    • Transesterification
    • Others (Hydro Heating, etc.)
  •  Application Insights (Revenue, USD Bn, 2019 - 2031)
    • Transportation Fuel
    • Marine
    • Others (Aviation, etc.)
    • Power Generation
    • Others (Thermal Heating, etc.)
  • Regional Insights (Revenue, USD Bn, 2019 - 2031)
    • North America
      • U.S.
      • Canada
    • Latin America
      • Brazil
      • Argentina
      • Mexico
      • Rest of Latin America
    • Europe
      • Germany
      • U.K.
      • Spain
      • France
      • Italy
      • Russia
      • Rest of Europe
    • Asia Pacific
      • China
      • India
      • Japan
      • Australia
      • South Korea
      • ASEAN
      • Rest of Asia Pacific
    • Middle East & Africa
      • GCC Countries
      • Israel
      • Rest of Middle East & Africa
  • Key Players Insights
    • The Archer-Daniels-Midland Company
    • Valero Energy Corporation
    • Green Plains Inc.
    • Gevo
    • Chevron
    • Neste
    • TotalEnergies
    • Wilmar International Ltd
    • Enerkem
    • POET
    • Fulcrum BioEnergy, Inc.
    • Alto Ingredients, Inc.
    • Pacific Biodiesel
    • Südzucker AG
    • Emami Agrotech Limited
    • Chemical Construction International Limited
    • Khanda BioFule
    • BIOD TECHNOLOGY FZCO
    • Lootah Bio Fuels
    • Neutral Fuels

Frequently Asked Questions

The CAGR of the liquid biofuels market is projected to be 6.4% from 2024 to 2031.

Increasing concerns for the environment and incentivizing national energy security are the major factors driving the growth of the liquid biofuels market.

Higher production costs than fossil fuels and limitations of feedstock availability are the major factors hampering the growth of the liquid biofuels market.

In terms of type, ethanol is estimated to dominate the market revenue share in 2024.

The Archer-Daniels-Midland Company, Valero Energy Corporation, Green Plains Inc., Gevo, Chevron, Neste, TotalEnergies, Wilmar International Ltd, Enerkem, POET, Fulcrum BioEnergy, Inc., Alto Ingredients, Inc. , Pacific Biodiesel, Südzucker AG, Emami Agrotech Limited , Chemical Construction International Limited, Khanda BioFule, BIOD TECHNOLOGY FZCO, Lootah Bio Fuels, and Neutral Fuels are the major players.

North America is expected to lead the liquid biofuels market.

View Our Licence Options

Need a Custom Report?

We can customize every report - free of charge - including purchasing stand-alone sections or country-level reports

Customize Now

Want to Buy a Report but have a Limited Budget?

We help clients to procure the report or sections of the report at their budgeted price. Kindly click on the below to avail

Request Discount
Logo

Reliability and Reputation

ESOMAR
DUNS Registered
Clutch
DMCA Protected

9001:2015

Reliability and Reputation

27001:2022

Reliability and Reputation

EXISTING CLIENTELE

Joining thousands of companies around the world committed to making the Excellent Business Solutions.

View All Our Clients
trusted clients logo