First Generation Biofuel

Global First Generation Biofuel Market to Reach US$211.5 Billion by 2030

The global market for First Generation Biofuel estimated at US$157.2 Billion in the year 2024, is expected to reach US$211.5 Billion by 2030, growing at a CAGR of 5.1% over the analysis period 2024-2030. Biodiesel Type, one of the segments analyzed in the report, is expected to record a 4.1% CAGR and reach US$138.7 Billion by the end of the analysis period. Growth in the Ethanol Type segment is estimated at 7.0% CAGR over the analysis period.

The U.S. Market is Estimated at US$42.8 Billion While China is Forecast to Grow at 7.9% CAGR

The First Generation Biofuel market in the U.S. is estimated at US$42.8 Billion in the year 2024. China, the world`s second largest economy, is forecast to reach a projected market size of US$41.6 Billion by the year 2030 trailing a CAGR of 7.9% over the analysis period 2024-2030. Among the other noteworthy geographic markets are Japan and Canada, each forecast to grow at a CAGR of 2.5% and 5.0% respectively over the analysis period. Within Europe, Germany is forecast to grow at approximately 3.2% CAGR.

Global First Generation Biofuel Market – Key Trends & Drivers Summarized

Why Does First Generation Biofuel Continue to Play a Pivotal Role in the Renewable Energy Mix?

First generation biofuels, derived primarily from food crops such as corn, sugarcane, wheat, and vegetable oils, remain a significant component of the global bioenergy landscape. Despite criticism over food-versus-fuel debates and land use concerns, these biofuels—mainly bioethanol and biodiesel—still account for the majority of global biofuel production due to their established infrastructure, mature technologies, and strong policy support. In regions like North America, Brazil, and parts of Europe, first generation biofuels are integral to national energy strategies, especially in decarbonizing the transportation sector. Their compatibility with existing internal combustion engine vehicles and ability to blend seamlessly with petroleum-based fuels offer a practical path for reducing greenhouse gas emissions in the short to medium term. Additionally, government mandates such as Renewable Fuel Standards (RFS), blending obligations, and carbon credit incentives have provided market stability and demand assurance for producers. While second and third generation biofuels are gaining traction, first generation variants continue to play a critical bridging role in the global transition to cleaner energy, particularly in markets where energy security and rural economic development are top priorities.

How Are Policy Frameworks and Trade Dynamics Influencing Market Momentum?

Policy support has been a cornerstone of the first generation biofuel market, with a wide array of subsidies, tax incentives, and blending mandates underpinning demand. In the U.S., the Renewable Fuel Standard (RFS) continues to drive substantial ethanol consumption, especially from corn-based sources. Brazil, leveraging its sugarcane industry, has built one of the most advanced ethanol programs globally, supported by mandatory blend rates and a robust flex-fuel vehicle market. The European Union’s Renewable Energy Directive (RED II) also supports biofuel usage, albeit with increasing scrutiny on feedstock sustainability and indirect land-use change (ILUC). Meanwhile, global trade dynamics have become increasingly complex, with tariffs, antidumping duties, and sustainability certifications shaping cross-border biofuel flows. Countries such as Indonesia and Argentina, major producers of biodiesel from palm and soybean oil respectively, have faced export restrictions in key markets over environmental and trade disputes. This has led to fluctuating pricing and supply volatility, prompting nations to reassess sourcing strategies. Despite these challenges, policy backing and geopolitical diversification efforts are expected to continue shaping the market’s direction, as governments balance energy goals with sustainability imperatives.

What Are the Technological and Sustainability Challenges Facing First Generation Biofuels?

While first generation biofuels offer a scalable alternative to fossil fuels, they face increasing scrutiny over environmental and ethical concerns. The reliance on food crops raises critical issues related to food security, land degradation, and water use. The production of feedstock for bioethanol and biodiesel can contribute to deforestation, biodiversity loss, and greenhouse gas emissions if not managed sustainably. Technological constraints also limit efficiency; for instance, fermentation and transesterification processes have relatively modest energy yields compared to more advanced methods. In response, regulatory agencies are imposing more stringent sustainability criteria, requiring traceability, lifecycle emissions assessments, and third-party certification to verify compliance. At the same time, ongoing R&D efforts are focused on improving conversion efficiencies, reducing input costs, and minimizing ecological footprints. Enhanced crop varieties, better land-use practices, and integrated biorefinery models are being developed to optimize feedstock utilization. However, the gradual shift in investment toward second generation (non-food biomass) and third generation (algae-based) biofuels is a clear indication that while first generation biofuels serve an important role today, their long-term viability will hinge on how effectively they can address environmental and ethical constraints.

What Is Driving Continued Global Demand and Investment in First Generation Biofuels?

The growth in the first generation biofuel market is driven by several factors related to transportation fuel demand, regulatory support, feedstock availability, and the global push for energy diversification. High oil prices and supply disruptions—exacerbated by geopolitical tensions—are reinforcing the strategic value of domestically produced biofuels, especially in energy-importing countries. The continued use of conventional vehicles in developing economies, where electric vehicle adoption remains low, is sustaining demand for ethanol and biodiesel blends as transitional fuels. The abundance and scalability of agricultural feedstocks in countries such as the U.S., Brazil, India, and Indonesia provide a reliable production base that supports domestic energy policies and rural employment. Blending mandates, carbon reduction targets, and compliance with international climate agreements are encouraging governments to maintain or expand biofuel quotas. Additionally, the growing interest in low-carbon fuel standards (LCFS), renewable fuel credits, and voluntary corporate sustainability programs is creating a parallel demand stream for certified, low-emission biofuel solutions. In summary, while the market faces long-term competition from advanced biofuels and electrification, the immediate drivers of policy, infrastructure readiness, and energy security continue to sustain and propel the global first generation biofuel industry.

SCOPE OF STUDY:

The report analyzes the First Generation Biofuel market in terms of units by the following Segments, and Geographic Regions/Countries:

Segments:
Type (Biodiesel Type, Ethanol Type); Feedstock (Coarse Grain, Sugar Crop, Vegetable Oil, Other Feedstocks); Application (Transportation Application, Aviation Application, Other Applications)

Geographic Regions/Countries:
World; United States; Canada; Japan; China; Europe (France; Germany; Italy; United Kingdom; Spain; Russia; and Rest of Europe); Asia-Pacific (Australia; India; South Korea; and Rest of Asia-Pacific); Latin America (Argentina; Brazil; Mexico; and Rest of Latin America); Middle East (Iran; Israel; Saudi Arabia; United Arab Emirates; and Rest of Middle East); and Africa.

Select Competitors (Total 34 Featured) -

• Archer Daniels Midland Company (ADM)
• Borregaard ASA
• Bunge Limited
• Cargill, Incorporated
• Chevron Corporation
• Cosan S.A.
• FutureFuel Corp.
• Green Plains Inc.
• Louis Dreyfus Company
• Neste Corporation
• Pacific Biodiesel
• Pacific Ethanol, Inc.
• Petrobras Biocombustível S.A.
• POET, LLC
• Raízen S.A.
• Renewable Energy Group
• TotalEnergies SE
• Valero Energy Corporation
• VERBIO Vereinigte BioEnergie AG
• Wilmar International Limited

TARIFF IMPACT FACTOR

Our new release incorporates impact of tariffs on geographical markets as we predict a shift in competitiveness of companies based on HQ country, manufacturing base, exports and imports (finished goods and OEM). This intricate and multifaceted market reality will impact competitors by artificially increasing the COGS, reducing profitability, reconfiguring supply chains, amongst other micro and macro market dynamics.

We are diligently following expert opinions of leading Chief Economists (14,949), Think Tanks (62), Trade & Industry bodies (171) worldwide, as they assess impact and address new market realities for their ecosystems. Experts and economists from every major country are tracked for their opinions on tariffs and how they will impact their countries.

We expect this chaos to play out over the next 2-3 months and a new world order is established with more clarity. We are tracking these developments on a real time basis.

As we release this report, U.S. Trade Representatives are pushing their counterparts in 183 countries for an early closure to bilateral tariff negotiations. Most of the major trading partners also have initiated trade agreements with other key trading nations, outside of those in the works with the United States. We are tracking such secondary fallouts as supply chains shift.

To our valued clients, we say, we have your back. We will present a simplified market reassessment by incorporating these changes!

APRIL 2025: NEGOTIATION PHASE

Our April release addresses the impact of tariffs on the overall global market and presents market adjustments by geography. Our trajectories are based on historic data and evolving market impacting factors.

JULY 2025 FINAL TARIFF RESET

Complimentary Update: Our clients will also receive a complimentary update in July after a final reset is announced between nations. The final updated version incorporates clearly defined Tariff Impact Analyses.

Reciprocal and Bilateral Trade & Tariff Impact Analyses:

USA
CHINA
MEXICO
CANADA
EU
JAPAN
INDIA
176 OTHER COUNTRIES.

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