Second Generation Biofuel Market Size, Share, and Industry Analysis By Feedstock (Field Crop Residue, Forest Residue, Lignocellulose Biomass, and Others), By Type (Biodiesel, Bioethanol, and Others), By Process (Biochemical Process, Thermochemical Process, and Others), By Application (Transportation, Power Generation, and Others), and Regional Forecast till 2032

The global second generation biofuel market is growing due to rising environmental concerns such as climate change and waste management. Second generation biofuels can significantly reduce greenhouse gas emissions compared to fossil fuels. Utilizing non-food biomass and adopting advanced conversion technologies can lower the carbon footprint of energy production.

• The International Maritime Organization has set an aim to reduce greenhouse gas emissions from international shipping by at least 40% by 2030 and 70% by 2050 compared to 2008.


• Further, the International Civil Aviation Organization has implemented the Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA) to stabilize CO2 emissions at 2020 levels.

Second Generation Biofuel Market Driver

Improved Conversion Technologies for Fuels has Increased the Demand for Second Generation Biofuels

Advances in technologies such as enzyme-based hydrolysis, gasification, and advanced fermentation processes have made the production of second generation biofuels more feasible and cost-effective. Ongoing research continues to improve these technologies, making them more efficient and scalable.

• For instance, improved enzyme technologies and more efficient gasification have lowered production costs by up to 40% in some cases.


• Further, improved fermentation and hydrolysis methods can increase ethanol yields from lignocellulosic biomass by 20-30%

Second Generation Biofuel Market Restraint

Lack of an Adequate Supply of Feedstock Hinders the Growth of the Market

A reliable and sustainable supply of feedstock is crucial. Though second generation biofuels use non-food biomass, the availability of sufficient quantities of agricultural residues, forestry residues, and dedicated energy crops can be limited. Seasonal and geographic variations can impact feedstock availability.

• Europe’s intake of used cooking oil more than doubled between 2015 and 2022, with most of it working in the continent’s cars and trucks in the form of biodiesel. But local UCO supplies are limited by the capacity of local authorities to collect them.

Second Generation Biofuel Market Opportunity

Rising Investments to Offer New Opportunities for Expansion

The production of second generation biofuels can stimulate economic activity in rural areas by creating new markets for agriculture and forestry residues. This can lead to job creation and income opportunities for farmers and landowners. Further, investment in these biofuels fosters the growth of new industries and technological innovations. 

• AM Green has shared plans to invest USD 1 billion investments in second generation biofuels in India. The company intends to establish two bio-ethanol plants as part of new ventures.

Segmentation

Key Insights

The report covers the following key insights:

• Recent Advancements in the Market


• Key Industry Development (Mergers, Acquisitions, and Partnerships)


• Impact of COVID-19 on the Market 


• Key Industry Trends


• Regulatory Landscape for the Market

Analysis by Feedstock

Based on feedstock, the market is subdivided into field crop residue, forest residue, lignocellulose biomass, and others.

Field crop residues are often available in large quantities and at low cost, as they are by-products of food production. Using agriculture residues helps in managing waste and avoiding open burning or decomposition which can release greenhouse gases.

• Project Sppedbird, a partnership between Nova Pangaea Technologies (NPT), LanzaJet, and British Airways (BA) got funding of EUR 9 million (USD 9.47 million) from the Government’s Advanced Fuels Fund (AFF).  

Analysis by Type

Based on type, the market is divided into biodiesel, bioethanol, and others.

Bioethanol, primarily derived from lignocellulosic biomass, is pretreated to make cellulose and hemicellulose more accessible. It can lower carbon emissions compared to fossil fuels and reduce competition with food crops.

• In June 2024, the European Investment Bank (EIB) and Cepsa signed a EUR 285 million (USD 299.96 million) loan agreement for the construction of an advanced biofuels plant in Palos de la Frontera, Andalusia.

Analysis by Process

Based on process, the market is fragmented into biochemical process, thermochemical process, and others.

The thermochemical process converts biomass into syngas, which is a blend of carbon monoxide, hydrogen, and carbon dioxide through high-temperature, partial oxidation. It can produce various fuels and chemicals from a wide range of feedstocks. Further, it can be highly efficient, particularly when integrated with combined heat and power systems.

• The Horizon 2020 project CLARA, synchronized by the Technical University of Darmstadt, worked on the functioning of biochemical thermal technology to deliver sustainable second generation biofuels for the transportation segment to move it toward CO2 neutrality.

Analysis by Application

By application, the market is divided into transportation, power generation, and others.

Transportation is the leading application of second generation biofuels, often blended with gasoline, to reduce emissions and improve fuel sustainability. Commonly used in various blends, such as E85 (85% ethanol, 15% gasoline) and E10 (10% ethanol, 90% gasoline), the biofuels help in reducing greenhouse gas emissions compared to pure gasoline. Furthermore, they can be used in existing internal combustion engines with minimal modification.

• European Commission approved a EUR 4.7 billion (USD 4.9 billion) public support scheme for advanced biomethane and biofuels in Italy. Under the scheme, biofuels collect a premium, which allows them to recompense for these higher costs and compete with fossil fuels in the transport sector.

Regional Analysis

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Based on region, the market has been studied across North America, Europe, Asia Pacific, Latin America, and the Middle East & Africa.

In North America, companies such as Nestle and Renewable Energy Group are investing in advanced biodiesel production facilities that utilize waste oils and fats. Biodiesel can be used in diesel engines both as a pure fuel (B100) and blended with petroleum diesel.

• The Renewable Fuel Standard (RFS) commands the blending of renewable fuels into the national fuel supply, including second generation biofuels. The Department of Energy (DOE) also provides funding for biofuel research and development.

In Europe, second generation biofuels are integral to the region’s strategy for reducing greenhouse gas emissions, achieving energy security, and promoting sustainability. The European Union (EU) and discrete European countries countries are actively investing in and developing various biofuels.

• Countries such as Germany, France, and the U.K. have national regulations and incentives to support biofuel production and use. In Germany, the Renewable Energy Source Act (EEG) provides financial support for biogas and biofuel projects.

There are emerging projects and research initiatives in countries such as China, India and Thailand focusing on developing advanced bioethanol technologies.

• In China, Yuan Longping High-Tech Agriculture Co. is involved in research on bioethanol production from agricultural residues.

Key Players Covered

The global second generation biofuel market is fragmented, with the presence of a large number of group and standalone providers.

The report includes the profiles of the following key players:

• Algenol Biofuels (U.S.)


• Clariant AG (Switzerland)


• DuPont (U.S.)


• Fiberight LLC (U.S.)


• GranBio (Brazil)


• Ineos Group Orsted AG (U.K.)


• POET-DS (U.S.)


• Advanced Biofuels LLC (India)


• Reliance Industries (India)


• Total Energies (Netherlands)


• Advanced Enzyme Technologies (India)

Key Industry Developments

• In August 2024, Total Energies Marine Fuels commissioned its first B100 biogas plant in Singapore, marking a significant step forward in its low-carbon fuel portfolio and supporting global carbon reduction targets. For this shipment, Total Energies Marine Fuels used the IMO Type II chemical tanker, MAPLE, from the Global Energy Group to transport 700 tons of biofuel based on 100% used methyl ester cooking oil (UCOME). The biofuel was supplied to the Pure Car and Truck Company (PCTC), Glovis Cosmos, operated by Hyundai Glovis.


• In December 2021, GranBio announced a strategic partnership with NextChem, a subsidiary of the Italian engineering group Maire Tecnimont dedicated to energy conversion, to co-license its patented technology for the production of second-generation biodiesel across the globe.