Renewable Fuel Market Size & Share Analysis - Growth Trends And Forecast (2025 - 2030)

Global Renewable Fuel Market Trends and Insights

Blending Mandates Expanding in Over 75 Countries

Over 75 national governments have enacted or tightened renewable fuel blending rules, making mandates the largest demand accelerator. The U.S. Environmental Protection Agency’s Set 2 rule raises domestic targets for 2026–2027 and cuts Renewable Identification Numbers for imports by 50% to favor local supply.^{(1)U.S. Environmental Protection Agency, “Renewable Fuel Standard: Extension of 2024 Compliance Deadline,” federalregister.gov} British Columbia’s 2025 decision to double the diesel blending requirement to 8% and restrict non-Canadian supply underscores a trend toward domestic-content rules. Indonesia’s B30 biodiesel program and Malaysia’s parallel mandates anchor Southeast Asian demand and help insulate regional producers from price-driven export volatility. Collectively, these policies create predictable volumes that de-risk project financing and underpin capacity expansions. For producers, mandates translate into baseload demand even during commodity price downturns.

Corporate Net-Zero Commitments by Hard-to-Abate Sectors

Aviation, shipping, and energy-intensive industries are underwriting premium renewable fuel contracts to meet published net-zero roadmaps. Airlines have locked in more than USD 4 billion in SAF offtake agreements led by United, Delta, and American Airlines. Marine fuel demand is gathering momentum as the International Maritime Organization’s 2030 target approaches, while steel, cement, and chemicals players pilot bio-based process heat solutions. Long-dated offtake contracts give developers revenue certainty and improve debt terms. The resulting volume visibility attracts institutional capital that was previously hesitant to finance commodity-exposed biofuel plants. As hard-to-abate sectors internalize the price of carbon, premium demand segments are likely to command margin uplift relative to road-fuel pools.

SAF Tax Credits & Offtake Agreements in U.S./EU

The U.S. Section 45Z credit, worth USD 1.00 per gallon for transportation fuels and more for SAF, coupled with the EU’s ReFuelEU Aviation regulation mandating 2% SAF blending by 2025, has carved out a high-value niche within the renewable fuel market. Neste posted an 80% quarter-on-quarter jump in SAF volumes in Q1 2025, confirming the rapid demand ramp. U.S. developer USA Bioenergy secured a 20-year feedstock contract for its USD 2.8 billion Texas SAF plant, illustrating how policy clarity de-risks large build-outs. European airlines have begun passing SAF premiums to ticket prices, enhancing producer margins. Early movers capture policy-driven returns that will be harder to secure once capacity normalizes.

Co-Processing Retrofits at Existing Refineries Lower CAPEX

Retrofitting fossil refineries for renewable co-processing lowers capital intensity by leveraging installed utilities, hydrogen, and logistics systems. European majors have converted units in Germany, the Netherlands, and France, while U.S. companies such as Chevron Renewable Energy Group pursue similar paths. Operational flexibility allows plants to toggle between fossil and renewable slats based on feedstock pricing, smoothing earnings. The strategy narrows the cost gap versus greenfield biofuel plants and intensifies competition for standalone producers. As more refineries switch to dual-feed modes, global renewable fuel capacity could accelerate faster than headline project announcements suggest.

Volatile Feedstock Prices Linked to Food-Oil Markets

Used cooking and soybean oil prices hit multi-year highs in 2024, squeezing producer margins and driving Neste’s Q1 2025 renewable segment EBIT down to USD 310 per ton. Price spikes fuel the food-versus-fuel debate and invite regulatory scrutiny, as seen in California’s 2024 cap limiting seed oils to 20% of annual LCFS credits.^{(2)California Air Resources Board, “California Adopts Major LCFS Revisions,” arb.ca.gov} Producers are countering volatility by diversifying into animal fats and waste oils, but collection infrastructure remains underdeveloped in many regions. Long-term supply contracts help mitigate risk but often require upfront capital for pre-processing facilities. Until large-scale advanced feedstocks reach commercial maturity, margin compression will remain a key earnings swing factor.

Uncertain Indirect Land-Use-Change (ILUC) Regulation

The European Union incorporates ILUC factors into renewable fuel sustainability scores, whereas U.S. policy—reinforced by the July 2025 “One Big Beautiful Bill Act”—excludes ILUC from Section 45Z calculations, creating policy asymmetry. Divergent standards complicate cross-border trade and limit the fungibility of compliance credits. Multinationals must design feedstock supply chains that satisfy the strictest market in which they operate, driving up compliance costs. Investors view ILUC uncertainty as a headline project risk, particularly for crop-based fuels in Europe. Harmonization efforts remain slow, exposing producers to regulatory whiplash when operating across jurisdictions.

Segment Analysis

By Fuel Type: Hydrogen Disrupts Traditional Biofuel Hierarchy

Bioethanol held a 45.3% renewable fuel market share in 2024, reflecting entrenched blending mandates and mature supply chains. Green hydrogen, however, is forecast to deliver a 41.5% CAGR, the highest among all fuel types, supported by Morocco’s USD 32.5 billion mega-project and Australia’s USD 814 million Hydrogen Headstart program. Renewable diesel and SAF fetch premium margins thanks to drop-in compatibility with existing logistics systems and airline willingness to pay carbon-reduced premiums. European palm-oil phase-outs and tighter ILUC rules constrain biodiesel growth.

The renewable fuel market size for hydrogen is expected to eclipse biodiesel by 2029 as oil majors allocate multibillion-dollar budgets to electrolyzer-based production. Biogas and biomethane draw support from waste-management synergies, with Monterey Regional’s California landfill-to-RNG plant showcasing scalable economics. Bio-methanol remains niche, targeting marine dual-fuel engines. Overall, momentum is shifting toward fuels offering the largest lifecycle-emissions cuts per dollar of capital deployed.

Note: Segment shares of all individual segments available upon report purchase

By Feedstock: Waste Streams Command Premium Economics

Sugar crops supplied 33.1% of 2024 feedstock volumes, buoyed by Brazil’s sugarcane ethanol complex and European sugar-beet flexibility. Yet the “Others” feedstock bucket—covering municipal solid waste, algae, and novel residues—sports the fastest 19.4% CAGR as end-users reward low-ILUC pathways.

Renewable fuel market share derived from waste oils and animal fats is climbing despite collection bottlenecks that drive price spikes. Municipal solid waste conversion is proving bankable, evidenced by Enerkem’s Edmonton facility processing 40,000 tons a year into 5 million liters of ethanol.^{(3)Source: Enerkem, “Edmonton Waste-to-Biofuels Facility,” enerkem.com} California and the EU Regulators are tightening seed-oil limits, further tilting economics toward non-food feedstocks. Producers who secure diversified supply contracts gain a structural cost advantage in volatile commodity cycles.

By End-User: Aviation Emerges as Premium Growth Vector

Road transportation absorbed 85.7% of renewable fuel demand in 2024, anchored by gasoline and diesel blending rules in the United States, Brazil, and the European Union. SAF, however, is forecast to grow at a 36.7% CAGR through 2030 as airlines lock in multiyear offtake deals to meet net-zero pledges.

Marine fuel adoption trails aviation but is accelerating in short-sea shipping lanes subject to regional carbon levies. Industrial heating and power-generation users adopt renewable molecules where electrification proves technically infeasible or capital-intensive. The renewable fuel market size for aviation is expected to quadruple by 2030, making it the fastest-growing demand pocket despite higher per-unit costs.

Note: Segment shares of all individual segments available upon report purchase

Geography Analysis

North America retained a 40.4% renewable fuel market share in 2024, buoyed by the U.S. Renewable Fuel Standard, California’s LCFS, and Canada’s Clean Fuel Regulation.^{(4)California Air Resources Board, “Final Statement of Reasons for LCFS Rulemaking,” arb.ca.gov} Integrated supply chains and ready access to low-carbon feedstocks underpin competitive cost structures. The new Section 45Z producer credit provides price certainty through 2029, further incentivizing brownfield and greenfield expansions.

Asia-Pacific records the fastest regional growth on an 18.8% CAGR as Indonesia’s B30 biodiesel mandate scales, India advances toward a 20% ethanol blend by 2026, and China accelerates its green-hydrogen rollout. Japan and South Korea prioritize advanced fuels, including SAF and renewable diesel, to meet decarbonization targets in the aviation and maritime sectors.

Europe balances robust policy ambition with stringent sustainability filters. The Fit-for-55 package supports demand, but ILUC and palm-oil restrictions pressure crop-based pathways. Scandinavian refiners leverage abundant waste-oil supply chains, while Southern Europe focuses on lignocellulosic residues. South America capitalizes on sugarcane economics in Brazil and soy-derived biodiesel in Argentina, though export markets face tariff uncertainty. The Middle East and Africa remain nascent but show rising interest in green-hydrogen export hubs.