Next-Generation Biofuels Market Size, Share, By Biofuel Type (Biodiesel, Biogas, Biobutanol, Others), By Process (Biochemical Process, Thermochemical Process), By Raw Material (Lignocellulose, Jatropha & Camelina, Algae, Others), By Application (Transportation, Power Generation and, Others), and By Region - Trends, Analysis, and Forecast till 2034

Next-Generation Biofuels Market Size was valued at USD 14.8 Billion in 2024 and is expected to reach USD 109.3 Billion by 2034, growing at a CAGR of 24.5%

Next-generation biofuels—also called advanced or 2nd and 3rd generation biofuels—constitute a crucial innovation in the technologies of renewable energies to respond to the intrinsic drawbacks of 1st generation biofuels. Unlike 1st generation biofuels, which mostly come from food crops like corn and sugarcane, next-generation biofuels are made from non-food biomass sources, which consist of agricultural and forestry waste and residues, dedicated energy crops, and sometimes, algae and municipal solid waste. This development in feedstock considers the concerns about food security and land use competition with previous biofuel production methods. Those will be the next-generation biofuels, which involve numerous technologies and processes, ranging from cellulosic ethanol production to bio-diesel from algae that could enable high yields of oils without using more land. Other technologies would include the development of drop-in biofuels, which are chemically the same as petroleum-based fuels, so they're also simple to use in already developed infrastructure. The second generation of these advanced biofuels is supposed to provide higher environmental benefits by ensuring large cuts in greenhouse gas emissions relative to the fossils and first generation of biofuels. They are also considered to attempt higher efficiency in energy yields in the production process and better fuel quality.

The current research and development of next-generation biofuel production technologies are backed by improving conversion technologies. These are expected to lower production costs and increase production scale to make Jatropha & Camelina-scale production from next-generation biofuels competitive in the transportation fuels market. While promising, challenges are still there: technological refinement, large-scale production capabilities, and, of no most minor importance, policy support to facilitate market adoption. Next-generation biofuels will play an essential role in decarbonizing the transportation sector of a more sustainable energy future. Their main body will be crucial in difficult-to-decarbonize sectors, including aviation and heavy-duty transport.

Disclaimer: This data is only a representation. Actual data may vary and will be available in the report.

Key Drivers of Target Market:

Increasing Demand for Clean and Reliable Power Generation

• This necessitates a steady production of electricity to cater to the upsurge in interest insofar as world population and urbanization are surging on an increasing streak. Most regions depend on fossil fuels to a large extent, which generate electricity and, therefore, contribute to high greenhouse gas emissions. Biofuels are highlighted, particularly those from sustainable feedstocks and with lower carbon footprints relative to fossil fuels. These offer an attractive opportunity for cleaner electricity generation and a more sustainable energy mi.

Concerns Over Fossil Fuel Depletion:

• Being finite, fossil fuels are increasingly threatened with being depleted. Dependence on fossil fuels for services such as energy and transport is inherently high risk in the long term. Major oil-producing regions are often embroiled in geopolitical turmoil, with far-reaching potential impacts on global supply chains and price volatilities. Next-generation biofuels add to a sustainable renewable option that lessens dependence on depleting reserves of fossil fuels with a future secured in energy.

Restrains:

Availability and Sustainability of Feedstock:

• Decisively, the next-generation biofuel market will depend on ensuring feedstock availability that is supplied sustainably and reliably over the long term. There are non-food sources such as lignocellulose and algae on the potential front, but large-scale production will require efficient cultivation and harvesting methods. Poor or unsustainable management practices for the feedstock may lead to rivalry in the land and water resources for food and next-generation biofuel production, thus defeating the very purpose of next-generation biofuel.

Opportunities:

Developing Advanced Biofuels:

• Such advanced biofuels as bio-jet fuels and bio methanol developed and produced for aviation and transport will constitute a game-changing tool in decarbonizing these hard-to-abate sectors. These sectors are the most significant greenhouse gas contributors to the global economy. Major existing decarbonization approaches relevant to these transport modes are not readily adaptable since the energy density of batteries is relatively low and does not permit long distances for travel by aircraft and ocean-going ships. Biojet fuels are refined from sustainable feedstocks into products that meet stringent aviation fuel specifications. They can make deep reductions in GHG emissions relative to conventional jet fuel. Another example is biomethanol—a clean-burning alcohol fuel—to replace heavy fuel oils and help decrease the enormity of ship emissions.

The market is segmented based on Biofuel Type, Process, Raw Material, Application, and Region.

Biofuel Type Insights:

• Biodiesel is a liquid fuel similar to ordinary diesel but made from non-edible sources like vegetable oils or waste fats. It offers a less-green-burning alternative for vehicle fuel, lowers pollution, and makes the transport sector mostly cleaner. Conventional diesel fuel can be mixed with biodiesel or used in its pure form in inappropriate engines.
• Biogas: Biogas is produced by anaerobic digestion by decomposing organic matter. This gaseous fuel is applied when it can be used to generate electricity (bio-CNG) or in bio-buses. Anaerobic digestion is the management of the organic matter breakdown process itself under specified conditions but in the absence of oxygen. It harnesses the energy within organic waste and offers the benefits of contributing to the cause of waste management by diverting waste from landfills.
• Biobutanol: Biobutanol is an alcohol-based fuel that could replace gasoline in the future with superior performance characteristics for next-generation engines. Other exceptional features of biobutanol compared to gasoline include a higher octane rating, which indicates improved engine efficiency and minimized knocking during combustion. It also blends with gasoline in higher ratios than ethanol, making it a more flexible and compatible biofuel option.
• Others: This section stands for the new alternatives still under development that present a high transformation potential in the transportation and industrial sectors. Biojet fuels, the aviation version of SAFs, offer a bright future and indicate a decrease in air travel's carbon footprint.

Process Insights:

• Biochemical Process: The biochemical pathway is a natural process involving the use of microorganisms like enzymes or bacteria to convert biomass (organic matter) into biofuels. It is arguably the most natural and possibly the most effective way of producing biofuels, as the microorganisms can break down complex organic materials into simpler components, which can then be used in the production of fuels through fermentation processes.
• Thermochemical Process: This procedure relies on high temperatures and pressure to disintegrate the biomass into fuels. Though effective, the input energy is quite enormous. Many researchers are doing studies to minimize the energy requirements of this process by optimizing reaction conditions and deriving power from renewable sources. This will be of great importance in ensuring that the thermochemical-derived biofuels are technologically and economically sustainable and ensure environmental persistence in the long run.

Raw Material Insights:

• Lignocellulose: Lignocellulose, a ubiquitous fibrous material in cell walls, mainly derived from plants, constitutes the majority of raw material for next-generation biofuels. It is made available in large quantities with low lignin content to facilitate its breakdown into useable fuels. Thus, lignocellulosic materials are nonfood sources of biofuels without competition against land use for growing food crops.
• Jatropha and Camelina are breeds of non-food crops specially cultivated for biofuel. They can be effectively cultivated with less land and water use and, therefore, converted to a source of feed for biofuel in sustainable production. The crops can be grown on marginal lands that are less favorable for producing food crops, which results in high land-utilization efficiency.
• Algae: Algae have great potential due to their high growth rate, possibility of cultivation using wastewater, reduction of reliance on freshwater resources, and ability to capture atmospheric carbon dioxide, thereby reducing gas emissions within the greenhouse.

Others: In this area, this consideration turns to conventional sources. Municipal solid waste, food waste, and even sewage sludge are identified as potential feedstocks driving waste-to-energy solutions.

Application Insights:

• Transportation: Transportation is the biggest application area for biofuels. Such fuels are considered to replace gasoline, diesel, and jet fuel in vehicles and airplanes, making biofuels a less dirty alternative source that helps to minimize greenhouse gas emissions within this sector.
• Power Generation: Since it's combustible, biogas can directly be used in power generation plants. The electricity generated from these plants can then be fed to the grid, thus contributing to a more sustainable mix of energy.
• Others: For use in heating or industrial purposes and as components of combined heat and power ways, biofuels can tackle a much broader viewpoint for viable energy alternatives.

Regional Insights

• North America: The US is the early adopter, with long-entrenched biofuel infrastructure and much government backing through policies such as renewable fuel standards. However, feedstock availability and competition with food production for land resources are a concern. Canada also boasts vast agricultural lands and a focus on bioinnovation and is, therefore, equally a significant player.
• Asia Pacific: Biofuel production is experiencing phenomenal growth due to a large agricultural base, increasing energy demand in the face of regulation for a cleaner environment, and realization of biofuel development by government initiatives; the big pushes are coming from China and India with their vast populations and growing economies. However, there are challenges in ensuring the sustainability of feedstock management practices in this region and building logistics networks.
• Europe: Research and development in next-generation biofuels are centered in Europe, focusing on environmental sustainability and its ambitious climate goals. The European market is driven by mandatory regulations for the use of biofuels in all member states, derived from the European Union Renewable Energy Directive. Stringent regulations and high production costs could, however, be the hurdles.
• Latin America: With ample biomass resources and an increased focus on energy security, Latin America is the next potential area for the market of next-generation biofuels. Brazil is also one of the leaders in producing ethanol from sugarcane and is currently producing advanced biofuels through the production of cellulosic ethanol. However, political instability plus limitations in infrastructure development can be a substantial problem.
• Middle East and Africa: These biofuels are beginning to interest these regions in terms of issues regarding energy security and environmental sustainability. Government initiatives, along with technological advances, should drive them towards adopting next-generation biofuels. The key challenges are the financial resource shortage and the lack of technical expertise.

Next-Generation Biofuels Market Report Scope:

Attribute	Details
Market Size 2024	USD 14.8 Billion
Projected Market Size 2034	USD 109.3 Billion
CAGR Growth Rate	24.5%
Base year for estimation	2023
Forecast period	2024 – 2034
Market representation	Revenue in USD Million & CAGR from 2024 to 2034
Market Segmentation	By Biofuel Type - Biodiesel, Biogas, Biobutanol, Others. By Process - Biochemical Process, Thermochemical Process By Raw Material - Lignocellulose, Jatropha & Camelina, Algae, and Others By Application - Transportation, Power Generation, and Others
Regional scope	North America - U.S., Canada Europe - UK, Germany, Spain, France, Italy, Russia, Rest of Europe Asia Pacific - Japan, India, China, South Korea, Australia, Rest of Asia-Pacific Latin America - Brazil, Mexico, Argentina, Rest of Latin America Middle East & Africa - South Africa, Saudi Arabia, UAE, Rest of Middle East & Africa
Report coverage	Revenue forecast, company share, competitive landscape, growth factors, and trends

Segments Covered in the Report:

This report forecasts revenue growth at global, regional, and country levels and provides an analysis of the latest industry trends and opportunities in each of the sub-segments from 2024 to 2034. For the purpose of this study segmented the target market report based on Biofuel Type, Process, Raw Material, and Region.

Segmentation:

By Biofuel Type:

• Biodiesel
• Biogas
• Biobutanol
• Others

By Process:

• Biochemical Process
• Thermochemical Process

By Raw Material:

• Lignocellulose
• Jatropha & Camelina
• Algae
• Others

By Application:

• Transportation
• Power Generation
• Others

By Region:

• North America
  • U.S.
  • Canada
• Europe
  • Germany
  • UK
  • France
  • Russia
  • Italy
  • Rest of Europe
• Asia Pacific
  • China
  • India
  • Japan
  • South Korea
  • Rest of Asia Pacific
• Latin America
  • Brazil
  • Mexico
  • Rest of Latin America
• Middle East & Africa
  • GCC
  • Israel
  • South Africa
  • Rest of Middle East & Africa

The key players operating the Next-Generation Biofuels Market include Solazyme, POET-DSM, Chemtex Group, Sundrop Fuels Inc., Enerkem, Algenol Biofuels, Abengoa S.A., Gevo, Joule Unlimited, Inc., GranBio, ExxonMobil Corporation, Shell PLC, Chevron Corporation, Valero Energy Corporation, ADM (Archer Daniels Midland Company), Cargill.

Disclaimer: This data is only a representation. Actual data may vary and will be available in the report.

 

 

 

• In June 2024, BP intends to acquire full ownership of bp Bunge Bioenergia while refocusing plans for future biofuel projects. BP fully agrees to own its Brazilian biofuels joint venture, acquiring Bunge's 50% stake. High-returning mergers will enable BP to achieve synergies and expand the business. Simultaneously, plans for developing additional biofuel projects are being scaled back, with two projects on hold while three others are being evaluated.
• In March 2024, Cummins announced that it would launch its most efficient heavy-duty diesel engine yet. The diesel X15, the next product in the Cummins HELM 15-liter fuel agnostic platform, will be compatible with US EPA and CARB 2027 aligned requirements upon launch. The next-generation X15 diesel engine will be used in North America for heavy-duty on-highway applications. Maintaining the traditional reliability and lower operating costs that have met the needs of a diverse customer base since the inaugural X15 launch in 1998, the next-generation, advanced diesel X15 will feature improved greenhouse gas and fuel efficiency benefits while retaining the same ratings as the current X15 (up to 605 horsepower and 2,050 ft-lb of torque) and optimizing powertrain integration with Eaton Cummins and Cummins-Meritor.

• Solazyme*
  • Company Overview
  • Product Portfolio
  • Key Highlights
  • Financial Performance
  • Business Strategies
• POET-DSM
• Chemtex Group
• Sundrop Fuels Inc.
• Enerkem
• Algenol Biofuels
• Abengoa S.A.
• Gevo
• Joule Unlimited, Inc.
• GranBio
• ExxonMobil Corporation
• Shell PLC
• Chevron Corporation
• Valero Energy Corporation
• ADM (Archer Daniels Midland Company)
• Cargill

“*” marked represents similar segmentation in other categories in the respective section.

Research Objective and Assumption

• Research Objectives
• Assumptions
• Abbreviations

Market Preview

• Report Description
  • Market Definition and Scope
• Executive Summary
  • Market Snippet, By Biofuel Type
  • Market Snippet, By Process
  • Market Snippet, By Raw Material
  • Market Snippet, By Application
  • Market Snippet, By Region
• Opportunity Map Analysis

Market Dynamics, Regulations, and Trends Analysis

• Market Dynamics
  • Drivers
  • Restraints
  • Market Opportunities
• Market Trends
• Product Launch
• Merger and Acquisitions
• Impact Analysis
• PEST Analysis
• Porter’s Analysis

Market Segmentation, Biofuel Type, Forecast Period up to 10 Years, (USD Bn)

• Overview
  • Market Value and Forecast (USD Bn), and Share Analysis (%), Forecast Period up to 10 Years
  • Y-o-Y Growth Analysis (%), Forecast Period up to 10 Years
  • Segment Trends
• Biodiesel
  • Overview
  • Market Size and Forecast (USD Bn), and Y-o-Y Growth (%), Forecast Period up to 10 Years
• Biogas
  • Overview
  • Market Size and Forecast (USD Bn), and Y-o-Y Growth (%), Forecast Period up to 10 Years
• Biobutanol
  • Overview
  • Market Size and Forecast (USD Bn), and Y-o-Y Growth (%), Forecast Period up to 10 Years
• Others
  • Overview
  • Market Size and Forecast (USD Bn), and Y-o-Y Growth (%), Forecast Period up to 10 Years

Market Segmentation, Process, Forecast Period up to 10 Years, (USD Bn)

• Overview
  • Market Value and Forecast (USD Bn), and Share Analysis (%), Forecast Period up to 10 Years
  • Y-o-Y Growth Analysis (%), Forecast Period up to 10 Years
  • Segment Trends
• Biochemical Process
  • Overview
  • Market Size and Forecast (USD Bn), and Y-o-Y Growth (%), Forecast Period up to 10 Years
• Thermochemical Process
  • Overview
  • Market Size and Forecast (USD Bn), and Y-o-Y Growth (%), Forecast Period up to 10 Years

Market Segmentation, Raw Material, Forecast Period up to 10 Years, (USD Bn)

• Overview
  • Market Value and Forecast (USD Bn), and Share Analysis (%), Forecast Period up to 10 Years
  • Y-o-Y Growth Analysis (%), Forecast Period up to 10 Years
  • Segment Trends
• Lignocellulose
  • Overview
  • Market Size and Forecast (USD Bn), and Y-o-Y Growth (%), Forecast Period up to 10 Years
• Jatropha & Camelina
  • Overview
  • Market Size and Forecast (USD Bn), and Y-o-Y Growth (%), Forecast Period up to 10 Years
• Algae
  • Overview
  • Market Size and Forecast (USD Bn), and Y-o-Y Growth (%), Forecast Period up to 10 Years
• Others
  • Overview
  • Market Size and Forecast (USD Bn), and Y-o-Y Growth (%), Forecast Period up to 10 Years

Market Segmentation, Application, Forecast Period up to 10 Years, (USD Bn)

• Overview
  • Market Value and Forecast (USD Bn), and Share Analysis (%), Forecast Period up to 10 Years
  • Y-o-Y Growth Analysis (%), Forecast Period up to 10 Years
  • Segment Trends
• Transportation
  • Overview
  • Market Size and Forecast (USD Bn), and Y-o-Y Growth (%), Forecast Period up to 10 Years
• Power Generation
  • Overview
  • Market Size and Forecast (USD Bn), and Y-o-Y Growth (%), Forecast Period up to 10 Years
• Others
  • Overview
  • Market Size and Forecast (USD Bn), and Y-o-Y Growth (%), Forecast Period up to 10 Years

Market Segmentation, By Region, Forecast Period up to 10 Years, (USD Bn)

• Overview
  • Market Value and Forecast (USD Bn), and Share Analysis (%), Forecast Period up to 10 Years
  • Y-o-Y Growth Analysis (%), Forecast Period up to 10 Years
  • Regional Trends
• North America
  • Market Size and Forecast (USD Bn), By Biofuel Type, Forecast Period up to 10 Years
  • Market Size and Forecast (USD Bn), By Process, Forecast Period up to 10 Years
  • Market Size and Forecast (USD Bn), By Raw Material, Forecast Period up to 10 Years
  • Market Size and Forecast (USD Bn), By Application, Forecast Period up to 10 Years
  • Market Size and Forecast (USD Bn), By Country, Forecast Period up to 10 Years
    • U.S
    • Canada
• Asia Pacific
  • Market Size and Forecast (USD Bn), By Biofuel Type, Forecast Period up to 10 Years
  • Market Size and Forecast (USD Bn), By Process, Forecast Period up to 10 Years
  • Market Size and Forecast (USD Bn), By Raw Material, Forecast Period up to 10 Years
  • Market Size and Forecast (USD Bn), By Application, Forecast Period up to 10 Years
  • Market Size and Forecast (USD Bn), By Country, Forecast Period up to 10 Years
    • India
    • Japan
    • South Korea
    • China
    • Rest of Asia Pacific
• Europe
  • Market Size and Forecast (USD Bn), By Biofuel Type, Forecast Period up to 10 Years
  • Market Size and Forecast (USD Bn), By Process, Forecast Period up to 10 Years
  • Market Size and Forecast (USD Bn), By Raw Material, Forecast Period up to 10 Years
  • Market Size and Forecast (USD Bn), By Application, Forecast Period up to 10 Years
  • Market Size and Forecast (USD Bn), By Country, Forecast Period up to 10 Years
    • UK
    • Germany
    • France
    • Russia
    • Italy
    • Rest of Europe
• Latin America
  • Market Size and Forecast (USD Bn), By Biofuel Type, Forecast Period up to 10 Years
  • Market Size and Forecast (USD Bn), By Process, Forecast Period up to 10 Years
  • Market Size and Forecast (USD Bn), By Raw Material, Forecast Period up to 10 Years
  • Market Size and Forecast (USD Bn), By Application, Forecast Period up to 10 Years
  • Market Size and Forecast (USD Bn), By Country, Forecast Period up to 10 Years
    • Brazil
    • Mexico
    • Rest of Latin America
• Middle East and Africa
  • Market Size and Forecast (USD Bn), By Biofuel Type, Forecast Period up to 10 Years
  • Market Size and Forecast (USD Bn), By Process, Forecast Period up to 10 Years
  • Market Size and Forecast (USD Bn), By Raw Material, Forecast Period up to 10 Years
  • Market Size and Forecast (USD Bn), By Application, Forecast Period up to 10 Years
  • Market Size and Forecast (USD Bn), By Country, Forecast Period up to 10 Years
    • GCC
    • Israel
    • South Africa
    • Rest of the Middle East and Africa

Competitive Landscape

• Heat Map Analysis
• Company Profiles

• Solazyme
• POET-DSM
• Chemtex Group
• Sundrop Fuels Inc.
• Enerkem
• Algenol Biofuels
• Abengoa S.A.
• Gevo
• Joule Unlimited, Inc.
• GranBio
• ExxonMobil Corporation
• Shell PLC
• Chevron Corporation
• Valero Energy Corporation
• ADM (Archer Daniels Midland Company)
• Cargill

The Last Word

• Future Impact
• About Us
• Contact