North America Biofuel Market Analysis and Forecast (2020-2035)
The North America biofuel market is witnessing robust growth, supported by increasing demand for renewable energy, stricter emission regulations, and technological advancements in biofuel production. The sector encompasses a variety of biofuel types including ethanol, biodiesel, biogas, and advanced biofuels, with widespread applications across transportation, power generation, aviation, and marine sectors. The market is characterized by strong governmental support, a developing technological landscape, and significant investments from both established players and start-ups. With a focus on sustainability, energy security, and reduction of carbon footprint, the North America biofuel sector is expected to achieve substantial revenue growth over the forecast period.
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Latest Market Dynamics
Key Drivers
- Stringent government mandates for blending renewable fuels and ambitious emission reduction targets are driving rapid adoption of biofuels across transportation and power generation sectors. For example, in 2024, the U.S. EPA strengthened Renewable Fuel Standard requirements, compelling higher integration of biofuels.
- Surging demand for sustainable aviation fuels (SAF) is accelerating investments in advanced biofuels. Major airlines have entered offtake agreements with companies like Gevo Inc. and Neste Corporation to decarbonize air travel.
Key Trends
- Accelerated investments in second and third-generation biofuel technologies using non-food biomass, such as agricultural residues and algae, are gaining momentum. Green Plains Inc. recently announced an expansion of its renewable feedstock processing capabilities.
- Strategic collaborations between oil majors and biofuel producers for scaling production capacity and distribution channels, exemplified by BP Biofuels’ partnership with Cargill Inc. to expand renewable diesel supply.
Key Opportunities
- Expansion of renewable diesel and biojet fuel refineries to cater to surging demand from the aviation and heavy-duty transport sectors. In 2024, Neste Corporation began construction of a major SAF plant in Texas.
- Leveraging e-commerce and digital distribution channels to reach decentralized power generation markets and small-scale industrial buyers, a growth strategy piloted by Pacific Ethanol Inc.
Key Challenges
- Feedstock supply volatility and price fluctuations due to competition with food markets and weather-related agricultural disruptions. Archer Daniels Midland Company is actively researching diversified feedstock options.
- Uncertainty regarding future policy support and incentive mechanisms, which impacts long-term investment decisions, as cited by Renewable Energy Group Inc. during recent quarterly earnings.
Key Restraints
- High capital costs for deploying advanced biofuel production technologies inhibit rapid scale-up. Valero Energy Corporation recently announced delays in a planned bio-refinery expansion due to cost overruns.
- Logistical complexities and fragmentation in biofuel distribution networks deter market penetration, especially for emerging players and rural markets, a challenge flagged by GranBio.
North America Biofuel Market Share by Type, 2025
Ethanol continues to dominate the North America biofuel market by type in 2025, driven by widespread use in transportation fuel blends and robust production infrastructure, especially in the U.S. Biodiesel follows as the second-largest segment, supported by demand from the logistics and heavy-duty vehicle sectors. Biojet fuel, while currently a smaller segment, is experiencing the fastest growth rate amid regulatory pushes for sustainable aviation. Remaining categories such as biogas, bio-oil, and others comprise a smaller portion, but represent growth opportunities as next-generation technologies mature. This distribution reflects the region's focus on decarbonizing road and air transport while gradually integrating emerging biofuel sources.
North America Biofuel Market Share by Applications, 2025
Transportation remains the leading application for biofuels in North America, accounting for the majority of demand in 2025 as policy mandates and consumer preference shift towards lower-carbon mobility. The aviation segment, while currently smaller, is experiencing aggressive adoption of sustainable aviation fuel (SAF) by major airlines, elevating its share. Power generation and marine applications are growing steadily, driven by policy incentives and decarbonization targets. Other uses, including industrial and heating applications, form the balance of the market. This breakdown underscores the transportation sector’s central role in biofuel market growth, with aviation poised for rapid expansion.
North America Biofuel Market Revenue (USD Million), 2020-2035
North America's biofuel market revenue has demonstrated robust growth from 2020 and is forecasted to accelerate further through 2035. Market revenue reached approximately USD 20,700 Million in 2025 and is projected to grow at a healthy CAGR, surpassing USD 43,800 Million by 2035. This upward trend is underpinned by increasing demand for renewable solutions, strong policy support, and technological innovations in advanced biofuels. The shift towards sustainable transportation and expansion in sectors like aviation and marine are expected to propel revenue generation, making biofuels a pivotal component of North America’s clean energy transition.
North America Biofuel Market YOY Growth (%), 2020-2035
Year-over-year (YOY) growth for the North America biofuel market exhibits positive momentum, particularly in periods following new regulatory mandates and technology rollouts. Growth in 2025 is set to peak at around 8.3%, buoyed by corporate decarbonization efforts and expansion in sustainable aviation fuels. By 2035, YOY growth is anticipated to stabilize at approximately 7.4% as the market matures and advanced biofuel adoption scales. These steady growth rates affirm the sector’s resilience and evolving role in the wider North American energy landscape.
North America Biofuel Market Share by Region, 2025
The United States maintains a dominant position in the North America biofuel market with an estimated 78% market share in 2025, thanks to its mature production capacity, strong policy incentives, and high consumption levels. Canada follows with a 15% share, benefiting from expanding regulatory frameworks and investments in clean energy. Mexico holds 7% market share, with recent government initiatives spurring growth. This regional distribution reflects concentrated manufacturing and consumption hubs in the U.S., with Canada and Mexico presenting emerging opportunities for biofuel market expansion.
North America Biofuel Market Players Share, 2025
Major biofuel producers control a significant portion of the North America market in 2025. Archer Daniels Midland Company leads with an estimated 19% share, owing to its integrated value chain and large-scale ethanol operations. Valero Energy Corporation and POET LLC each capture 13% and 12%, respectively, leveraging advanced refineries and broad distribution networks. Other notable participants like Green Plains Inc., Renewable Energy Group Inc., and Neste Corporation collectively account for substantial market shares, highlighting the competition and innovation within the sector.
North America Biofuel Market Buyers Share, 2025
The biofuel market in North America is characterized by a high concentration of large-scale buyers in transportation and aviation, accounting for 52% of demand in 2025. Power generation companies represent another 20%, while industrial and marine applications collectively comprise 14%. The remaining 14% is distributed among smaller buyers, including private fleets and decentralized energy producers. This buyer segmentation underscores the importance of major industries and public utilities in driving biofuel adoption and scaling sustainable energy solutions.
Study Coverage
| Metrics | Details |
|---|
| Years | 2020-2035 |
| Base Year | 2025 |
| Market Size | Revenue (USD Million) |
| Regions | US, Canada, Mexico |
| Segments | By Type (Ethanol, Biodiesel, Biogas, Biojet Fuel, Bio-oil, Others); By Application (Transportation, Power Generation, Heat, Aviation, Marine, Others); By Distribution Channels (Direct, Indirect, OEMs, E-commerce, Distributors, Others); By Technology (First Generation, Second Generation, Third Generation, Fourth Generation, Pyrolysis, Gasification); By Organization Size (Small, Medium, Large) |
| Players | Archer Daniels Midland Company, POET LLC, Valero Energy Corporation, Green Plains Inc., Pacific Ethanol Inc., Renewable Energy Group Inc., Abengoa Bioenergy, Neste Corporation, Cosan, Gevo Inc., Wilmar International Limited, Cargill Inc., GranBio, BP Biofuels, Louis Dreyfus Company |
Key Recent Developments
- February 2024: Neste Corporation broke ground on a new sustainable aviation fuel (SAF) refinery in Texas, aiming to boost U.S. SAF supply by 2026.
- March 2024: Archer Daniels Midland Company announced a partnership with Marathon Petroleum to expand renewable diesel production capacity in the Midwest.
- April 2024: Valero Energy Corporation completed an upgrade at its Louisiana biorefinery to support increased production of low-carbon biodiesel and renewable naphtha.
- June 2024: Green Plains Inc. launched a pilot initiative leveraging AI-driven feedstock selection to optimize ethanol yields and reduce input costs.
- July 2024: POET LLC signed a multi-year offtake agreement with a leading airline group to deliver advanced biojet fuel for domestic flights.
