Europe Biofuel Market Size Likely to Surpass at a CAGR of 5.73% By 2034

Market Size and Growth

The Europe Biofuel Market size was valued at USD 26.75 Billion in 2025 and is expected to reach USD 46.3 Billion by 2034 at a CAGR of 5.73% during the forecast period 2025 to 2034.

Overview

According to CMI Analysis, the European Biofuel Market is driven by the region’s ambitious climate neutrality targets, energy security measures to reduce dependency on Russian fossil fuels, and rising decarbonisation requirements for transport and heavy industries. Additionally, technological innovations in advanced feedstocks and the expanding use of Sustainable Aviation Fuel (SAF) are expected to create lucrative opportunities through 2034.

Key Trends & Drivers

• Strong Policy Support & Climate Goals: The EU’s Fit-for-55 initiative and Renewable Energy Directives (RED II & RED III) provide enforceable climate neutrality commitments by 2050. These policies require countries to increase biofuel blending targets, incentivize green investment into biofuels, and pursue decarbonizing fuel use across road, maritime, and aviation.

• Energy Security & Supply Chain Transformations: The REPowerEU strategy explicitly addresses dependence on Russian fossil fuels by initiating a direct regional investment program to ramp up domestic biofuels and advanced feedstock production in Europe. Therefore, removing importation with more for-profit production in Europe reduces vulnerability to geopolitical challenges or disrupted supply chains.

• Significant Adoption in Heavy Industrial and Aviation: Trucking fleets, shipping operators, and airlines are all ramping up biodiesel, bioethanol, and Sustainable Aviation Fuel (SAF) consumption to decarbonize their operations. Drop-in fuels have significant value as they use current (installed) engines, fuels, and distribution systems.

• Investments in Advanced Feedstocks & Technologies: Companies are investing consistently in lignocellulosic biomass, municipal waste, used cooking oil, algae, and other advanced feedstocks for next-generation biofuels and other significant decarbonized technologies. These advanced feedstocks have low or zero indirect land use change and an increase in sustainability levels, and biorefineries and treatment technologies add to biofuel output efficiencies.

• Expansion of Sustainable Aviation Fuel (SAF): EU climate policies are forcing airlines to gradually increase the SAF share of jet fuel blends, creating large-scale opportunities for producers of SAF from waste oils and algae, who can deliver GHG savings and help aviation meet net-zero.

• Momentum for Biogas and Renewable Gases: The REPowerEU plan also has biomethane production within its targets of 35 billion cubic meters by 2030. Biomethane production from agricultural and organic waste provides an important opportunity for rural economies while helping to mitigate climate GHG emissions and allowing for an increase in the share of biogas in Europe’s sustainable energy mix.

• Increasing mandates for Pure Biodiesel blending: Countries like Germany, the UK, the Netherlands, and Sweden are also increasing mandates for pure biodiesel (B100) blending for road transport. This encourages domestic production and helps fleet operators with flexible choices for quickly achieving lower carbon emission goals.
• Feedstock Diversification & Circular Economy Emphasis: Financing for feedstocks from waste is becoming much more available and puts a dent into the European aspiration to a circular economy for several reasons, as they produce lower carbon biofuels, and also reduce the issues of food instability and several overall environmental issues.

Report Scope

SWOT Analysis

• Strengths: Clear and binding climate targets, mature national roadmaps, and existing agriculture and domestic production providing potential feedstocks such as rapeseed oil, sugar beets, and grains create a well-defined biofuel industry in Europe. The region has existing refineries and blending infrastructure, and in-country demand for both conventional biofuels and upcoming advanced biofuels, backed by a national mandate and governments also provide financial incentives.

• Weaknesses: Biofuel prices always remain higher than fossil fuels throughout the entire refining process, making nationally established mandates and subsidies necessary to remain competitive. Sustainability criteria established under RED II/III are considerably rigorous and lengthy, with compliance prohibitive to smaller producers, requiring verification and certification to prove compliance, as well as traceability to substantiate sustainability. Depending on how international conflicts are handled, supply chains for feedstock are also potentially impacted by various vegetable oils and grains used as inputs.

• Opportunities: Efforts in Europe to achieve climate neutrality have increased blending rates of pure biodiesel (B100), especially in the freight transport sector. Sustainable Aviation Fuel for commercial airlines is becoming a mandate for airlines to reduce GHG emissions, which will create attractive compressible capital to grow. Businesses receiving grants from EU governments and through public-private partnerships are increasingly funneling large sums of money into R&D for biofuel feedstock, particularly next-generation biomass, algae, food crop waste, and municipal waste.

• Threats: The rapidly fluctuating price of agricultural products can impact margins and disrupt the planning cycle for biofuel producers. Disputed sustainability is increasing competition for land and the availability of agricultural products for food, which creates hurdles to sustained growth as an industry. Compliance for smaller producers can perhaps become burdensome, and with increased complexity to processes and testing costs for proving compliance, it might kill smaller producers and affect market share dynamics. Fossil fuels remain a much cheaper alternative for market sellers in less-regulated markets or countries with less regulation, which leads to uncertainty around the competitiveness of biodiesel products.

List of the prominent players in the Europe Biofuel Market:

• UPM-Kymmene Oyj
• Neste Oyj
• Preem AB
• SunPine AB
• Svenska Cellulosa AB (SCA)
• Galp Energia SGPS SA
• Green Fuel Nordic Oy
• Beta Renewables SpA
• Biomethanol Chemie Nederland BV
• Borregaard ASA
• Others

The Europe Biofuel Market is segmented as follows:

By Type

• Biodiesel
• Ethanol
• Other Types

By Feedstock

• Coarse Grain
• Sugar Crop
• Vegetable Oil
• Other Feedstocks

Regional Coverage:

Europe

• Germany
• France
• U.K.
• Russia
• Italy
• Spain
• Netherlands
• Rest of Europe