Introduction to the Biofuels Market 

The global Biofuels Market has emerged as a key player in the renewable energy sector, driven by increasing environmental concerns and the need to reduce dependence on fossil fuels. According to recent analysis, the Biofuels Market Size is expected to grow from USD 121.23 billion in 2025 to USD 136.94 billion in 2026, with a forecast to reach USD 252.12 billion by 2031 at a compound annual growth rate (CAGR) of 12.96% over the period.  

The Biofuels Industry is also experiencing a transition from first-generation fuels, such as crop-based ethanol and biodiesel, to advanced second- and third-generation options, including waste-derived fuels and algae-based solutions. These innovations improve sustainability while minimizing land-use conflicts, making biofuels a critical element in global decarbonization strategies. 

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Key Trends Shaping the Biofuels Market 

Increasing Transport-Sector Blend Mandates 

Governments in Asia and South America are enforcing higher biofuel blending requirements, which is reshaping production and feedstock allocation. Indonesia’s B40 biodiesel program and India’s 20% ethanol blending target by 2025 are driving infrastructure investments and ensuring predictable demand, supporting Biofuels Market Growth. 

Rising Corporate Commitments for Renewable Fuels 

Logistics and retail companies are entering multi-year agreements to secure sustainable aviation fuel (SAF) and renewable diesel. These corporate purchase agreements, coupled with tax incentives like the U.S. Clean Fuel Production Credit and California’s LCFS, improve revenue certainty and encourage refinery expansions, reinforcing long-term Biofuels Market Trends. 

Shift Toward Waste-Based and Algae Feedstocks 

The phase-out of palm oil in Europe and stricter sustainability criteria are prompting investment in algae, winter canola, and used cooking oil. These alternative feedstocks reduce lifecycle emissions and land-use concerns, diversifying supply and stabilizing the Biofuels Market Share. 

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Biofuels Market Segmentation 

Key Players in the Biofuels Industry 

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