Transportation Biofuel Market Opportunity, Growth Drivers, Industry Trend Analysis, and Forecast 2025 - 2034

The Global Transportation Biofuel Market was valued at USD 101.9 billion in 2024 and is projected to grow at a CAGR of 10.7% from 2025 to 2034. The market is gaining momentum due to the rising need for sustainable energy alternatives and heightened efforts to reduce carbon emissions in the transportation industry. Advancements in biofuel production technologies, particularly second and third-generation biofuels, are improving efficiency and enabling the use of diverse feedstocks. These innovations address concerns over food security and resource allocation by utilizing non-food sources.

The industry is seeing a shift toward feedstock diversification, incorporating agricultural residues, waste oils, and other byproducts. This approach promotes a circular economy and enhances the sustainability of biofuel production. Additionally, the compatibility of biofuels with current fuel infrastructure is fostering their integration into the energy mix. Blending biofuels with conventional fuels is becoming a practical solution for reducing greenhouse gas emissions without requiring significant changes to existing vehicle engines.

The ethanol market is expected to surpass USD 191 billion by 2034, driven by its increasing use in blended fuels. Government policies promoting lower emissions and the growing emphasis on environmental sustainability are encouraging higher ethanol consumption. Ethanol is becoming a critical component of strategies aimed at reducing greenhouse gas emissions in transportation. Its role in emerging fuel technologies is further solidifying its position in the market.

The coarse grain feedstock segment, which includes various grains used for biofuel production, is forecasted to grow at a CAGR of over 10.5% through 2034. Efforts to enhance crop yields and improve agricultural efficiency are supporting the growth of this segment, making biofuel production more cost-effective and scalable. These developments are driving increased adoption of renewable fuel blends, contributing to the broader market expansion.

In the U.S., the transportation biofuel market is expected to exceed USD 98 billion by 2034. Federal mandates and supportive regulatory frameworks are fueling the adoption of biofuels, with an increasing focus on achieving net-zero emissions in the transportation sector. Investments in advanced biofuel technologies are accelerating as the industry moves toward more sustainable energy solutions.