Panorama, Trends and Opportunities in the Sustainable Energy sector.
In recent years, the transition towards cleaner and more sustainable energy sources has driven the global development and adoption of advanced biofuels. These biofuels are mainly produced from biological feedstock such as non-food vegetable oils (inedible oils due to their high levels of contaminants, benzopyrenes, MOSH/MOAH, tank sediments, etc.), high sulphur refined pastes, agricultural residues or animal fats, among others. They play a crucial role in decarbonizing the energy sector and in reducing reliance to other fossil fuels.
What are Advanced Biofuels?
Advanced biofuels are defined by their sustainable origin and their capacity to reduce significatively their greenhouse gas emissions. Unlike conventional biofuels, these use non-food feedstock such as crop residues (wheat, barley or whey), used oils, not fit for human consumption oils or animal fats. Therefore, they do not compete directly with food production and promote circular economy.
Global Market Size and Projections
The advanced biofuels market has shown a visible growth. In 2025, it was estimated that a size of the market of 21.47 billion US dollars and then, these sizes are projected to grow up to 51.77 billion for 2035. This expansion equals to a compound annual growth rate (CAGR) higher than 9.2% in the 2026-2035 period. For 2026, the industry estimates that it will reach 23.25 billion dollars, which reflects a rising interest for sustainable energetic alternatives.
Market Growth Drivers
The constant increase in global energy consumption is a key driver for the sector. Although the growth of global energy consumption moderated in 2022 (+2,1%), it still is above the annual average of the past decade. Moreover, the accessibility and low cost of feedstock such as agricultural residues and animal fats facilitate the production of advanced biofuels. It made its adoption even more appealing for governments and industries.
Production and Feedstock
Advanced biofuel production relies on easily available and affordable sources in local markets, which helps reduce logistical costs and encourages rural development. The use of agricultural residues, such as wheat straw or whey, not only repurposes by-products that would otherwise be discarded but also contributes to environmental sustainability. Likewise, the use of animal fats, which cost if lower than that of vegetable oils, adds a competitive advantage to the sector.
Regional Analysis: North America and Asia-Pacific in the Forefront
North American market leads the adoption of advanced biofuels, with a projected global market of more than 34% for 2035. This growth is favoured by government regulations promoting cleaner fuels and strong industrial demand. Meanwhile, Asia-Pacific establishes itself as the second most relevant region, considering that it will reach a 25% share of the global market by 2035. Key factors in this progress include increased production, especially in countries like Indonesia, alongside the use of new transformation technologies.
Leading agents in European advanced biofuels market (2024-2029) include major energy companies such as Neste, Total Energies, Eni and Repsol. They lead the production of HVO (renewable diesel) and SAF (sustainable aviation fuel) as of residues. These stakeholders focus on non-food feedstocks like used cooking oils (UCO) and lignocellulosic biomass, with strong support of countries such as Finland, Sweeden and the Netherlands. Used cooking oils will not be the priority for advanced biofuels in the future.
Segment Outlook: Energy Crops and Agricultural Residues
Within the advanced biofuel market, the cover crops segment stands out for its potential, projected to reach a 34% market share by 2035. The abundance and availability of high- energetic agricultural residues positions this segment as one of the more promising solutions to meet the demand for renewable energy in the near future.
The Olive Sector Focuses on By-Product Valorization and Business Efficiency
The biofuels industry positions itself as a clearer and more sustainable alternative for management of food waste generated by the vegetable oil sector. In this context, the Annex III of the Order TED/728/2024 (Sustainability Reporting Requirements) of July 15th, which establishes the support mechanism for biofuels and other renewable fuels for Spanish transport, gains special importance. The annex represents transposition of the European Annex IX and details the list of materials categorized as wastes by Europe, thereby opening new opportunities for valorization.
This strategy will not only contribute to environmental improvement through waste reduction but will drive the agrifood sector development and circular economy. Collaboration between producers and specialized in biofuels companies will reinforce sustainability and competitiveness aligning with European objectives for energetic transition and emissions reduction.
The utilization of by-products in the vegetable oils industry, within the current regulatory framework, represents a key opportunity to transition towards more responsible and profitable production models. Thereby, consolidating the sector as a benchmark on innovation and environmental commitment.
At Ofade Consulting, we collaborate with the sector identifying advance waste feedstock.
(Source: Report ID: 6008; Published Date)
