Biofuels & Biochemicals Industry Report 2025: Mandates and Incentives Are Locking In Structural Demand, Feedstock Tightness, Traceability and ILUC Disputes Inflate Risk - $220+ Bn Markets to 2035

The Biofuels & Biochemicals Market is expected to grow due to regulatory mandates that drive sustainable fuel demand, amidst feedstock scarcity and traceability challenges. U.S. incentives enhance project viability, while global tariffs reshape trade dynamics, offering diverse opportunities for market expansion.


Dublin, Feb. 06, 2026 (GLOBE NEWSWIRE) -- The "Biofuels & Biochemicals Market Report 2025-2035" report has been added to ResearchAndMarkets.com's offering.

Overall world revenue for the Biofuels & Biochemicals Market: In terms of value the market will surpass US$220.1 billion in 2025, the work calculates. The publisher predicts strong revenue growth through to 2035. The work identifies which organizations hold the greatest potential. Discover their capabilities, progress, and commercial prospects, helping you stay ahead.

This report will prove invaluable to leading firms striving for new revenue pockets if they wish to better understand the industry and its underlying dynamics. It will be useful for companies that would like to expand into different industries or to expand their existing operations in a new region.

Mandates and Incentives Are Locking In Structural Demand

Policy remains the flywheel, with binding blend requirements and tax credits turning what used to be discretionary 'green' volumes into base demand. In aviation, the EU's ReFuelEU Aviation rule begins in 2025 with a 2% SAF blend mandate and scales through 2030, forcing airlines and fuel suppliers to secure supply and proof of sustainability, while Switzerland plans alignment from 2026.

These measures sit alongside the broader RED III framework, which tightens transport-renewables targets and traceability, increasingly privileging advanced feedstocks and sustainable pathways that can clear lifecycle thresholds. Together, these rules convert policy intent into offtake inevitability, which de-risks projects and underwriting.

In the U.S., the clean fuel production credit (?45Z) became effective for 2025 production, paying on well-to-wheels carbon intensity and rewarding producers that can verifiably drive down CI scores. Treasury and IRS guidance clarifies eligibility and modeling, while ongoing tweaks to GREET parameters and treatment of ILUC are sharpening the economic signal toward low-CI feedstocks and process efficiency. That design materially improves bankability for SAF, renewable diesel and ethanol-to-jet pathways that can document CI reductions, and it pushes enzyme providers, pretreatment technology and carbon capture toward the critical path.

Feedstock Tightness, Traceability and ILUC Disputes Inflate Risk

The best pathways on paper still depend on scarce, auditable feedstocks. Used cooking oil, tallow and other waste lipids remain constrained, with allegations of origin-fraud periodically roiling European markets and making buyers cautious. RED III's tougher sustainability and traceability rules raise the compliance bar even as they strengthen market integrity, and lifecycle debates around indirect land use change continue to influence credit values and eligibility across jurisdictions. Producers that can't prove chain-of-custody and low CI risk losing price premia or tax eligibility, compressing margins at the worst possible time in project ramp-up.

Supply risk compounds when national programs redirect feedstocks inward. Indonesia's march to B40-B50 reduces palm oil exports available for biodiesel outside its borders, while Europe's advanced-biofuel sub-targets absorb a growing share of limited Annex IX feedstocks. Singapore's upcoming SAF mandate illustrates how even well-signaled policies face near-term cost and supply headwinds, with early estimates putting SAF at multiples of fossil jet and highlighting the challenge of scaling waste-based inputs quickly enough. Until novel lipids, residues, lignocellulosics and CO,CC-to-X routes reach scale, feedstock scarcity will be a persistent cap on growth.

Key Questions Answered

  • How is the biofuels & biochemicals market evolving?
  • What is driving and restraining the biofuels & biochemicals market?
  • How will each biofuels & biochemicals submarket segment grow over the forecast period and how much revenue will these submarkets account for in 2035?
  • How will the market shares for each biofuels & biochemicals submarket develop from 2025 to 2035?
  • What will be the main driver for the overall market from 2025 to 2035?
  • Will leading biofuels & biochemicals markets broadly follow the macroeconomic dynamics, or will individual national markets outperform others?
  • How will the market shares of the national markets change by 2035 and which geographical region will lead the market in 2035?
  • Who are the leading players and what are their prospects over the forecast period?
  • What are the biofuels & biochemicals projects for these leading companies?
  • How will the industry evolve during the period between 2025 and 2035? What are the implications of biofuels & biochemicals projects taking place now and over the next 10 years?
  • Is there a greater need for product commercialisation to further scale the biofuels & biochemicals market?
  • Where is the biofuels & biochemicals market heading and how can you ensure you are at the forefront of the market?
  • What are the best investment options for new product and service lines?
  • What are the key prospects for moving companies into a new growth path and C-suite?

Market Dynamics

Market Driving Factors

  • Increasing Focus on Rural and Agricultural Development Through Liquid Biofuel Production
  • Increasing Investments In Research and Development are Fueling Innovation and Creating Opportunities for Improved Biofuel and Biochemical Technologies
  • Sustainable Aviation Fuel (SAF) and Hydrotreated Vegetable Oil (HVO) are Gaining Traction Due to Global Airline Decarbonization Commitments

Market Restraining Factors

  • The Use of Food Crops for Biofuel Production can Raise Concerns About Food Security and Competition for Arable Land
  • High Costs of Setting Up Biofuel FeedStocks and Plants Hinder the Market.

Market Opportunities

  • Collaborations Between Biofuel Producers and Major Industries, Present Opportunities for the Adoption of Next-Generation Biofuels
  • Expansion of Biofuel Production Unit In Developing Economies Opportunities for the Market
  • Advancements in Biotechnology and Enzyme Engineering Opportunities

U.S. Tariffs: What's the Impact on Global Biofuels & Biochemicals Market?

Porter's Five Forces Analysis

PESTLE Analysis

Companies Featured

  • Abengoa, S.A (Acquire by Cox Energy)
  • Alto Ingredients, Inc
  • Archer Daniels Midland Company
  • BASF SE
  • Bio-Oils Energy
  • BP Plc
  • Butamax Advanced Biofuels LLC
  • Eniven Group
  • Fulcrum BioEnergy
  • Green Plains Inc.
  • Renewable Biofuels LLC
  • Royal Dutch Shell Plc
  • Valero Energy Corporation
  • Wilmar International Ltd
  • ADM (Archer Daniels Midland)
  • BP
  • Chevron
  • Diamond Green Diesel (DGD) - Valero & Darling Ingredients
  • ExxonMobil
  • Firmin
  • Fulcrum BioEnergy
  • Gevo Inc.
  • Green Plains Inc.
  • HIF Global
  • Idemitsu Kosan
  • LanzaJet
  • Mitsui OSK Lines
  • Neste
  • Perpetual Next
  • Petrobras
  • POET LLC
  • Renewable Energy Group (REG)
  • Shell
  • SkyNRG
  • TotalEnergies
  • Valero Energy
  • White Summit Capital
  • World Energy

Segments Covered in the Report

By Business Model

  • Integrated Bio-Refineries
  • Decentralized / Modular Production Units

By Feedstock Source

  • First-Generation
  • Second-Generation
  • Third-Generation

By Application

  • Transportation Fuels
  • Aviation Fuels
  • Power Generation
  • Industrial Chemicals & Intermediates

By Process

  • Fermentation
  • Transesterification
  • Gasification
  • Pyrolysis
  • Other Processes

By Product Type

  • Bioethanol
  • Biodiesel
  • Biogas / Renewable Natural Gas (RNG)
  • Sustainable Aviation Fuel (SAF)
  • Bio-based Chemicals
  • Hydrogen from Biomass

For more information about this report visit https://www.researchandmarkets.com/r/11ndbq

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