Brazil Biofuel - Market Share Analysis, Industry Trends & Statistics, Growth Forecasts (2026-2031)

The brazil biofuel market size is projected to be USD 8.15 billion in 2025, USD 9.43 billion in 2026, and reach USD 17.82 billion by 2031, growing at a CAGR of 13.58% from 2026 to 2031. This report is Segmented by Fuel Type (Bioethanol, Biodiesel FAME, Renewable Diesel HVO, Sustainable Aviation Fuel, and More), Generation (First-Gen, Second-Gen, Third-Gen, and Fourth-Gen), Feedstock (Sugar Crops, Starch Crops, Oilseeds, and More), Technology (Fermentation, Trans-Esterification, Hydrotreatment, and More), and End-Use Sector (Road Transport, Aviation, Marine, and Power Generation and Heating).

Brazil Biofuel Market Trends and Insights

RenovaBio Decarbonization Targets Drive Carbon-Credit Revenue

RenovaBio obliges distributors to offset 10.1% of 2026 emissions, expanding to 11.8% by 2028, which anchors a predictable credit stream for compliant producers. CBIO prices rose from BRL 45 in early 2024 to BRL 85 by year-end 2025, rewarding mills that retrofit for cellulosic ethanol or hydrotreatment. Raízen’s Bonfim 2G plant earns 1.8 CBIOs per cubic meter, a 50% lift over first-generation ethanol, enhancing margins by USD 0.15 per liter. Transparent ANP accounting reduces counterparty risk, enabling CBIO-backed loans that accelerate retrofit paybacks.

Mandatory Blend Ratios Lock in Structural Demand

The Fuel of the Future Law lifts ethanol blends to E30 by 2028 and biodiesel to B20 by 2030, removing discretionary toggles that destabilized earlier mandates. The higher E30 ceiling alone requires 2.5 billion additional liters of ethanol a year, equal to the capacity from eight greenfield mills, while B20 pulls an extra 1.2 billion liters of biodiesel, tightening oilseed markets. ANP audits inventory monthly and levies penalties up to BRL 50,000 per violation, ensuring compliance across 27 states. Flex-fuel penetration above 95% of new car sales nullifies infrastructure barriers, allowing rapid field execution.

ILUC & Deforestation Concerns Threaten Export Access

Soybean-linked land conversion cleared 7,800 km² of Cerrado in 2024, attracting EU scrutiny under the 2025 Deforestation Regulation. Brazilian biodiesel exports worth USD 420 million risk exclusion unless full traceability is proven, a challenge for smallholders lacking satellite monitoring. Only 38% of ethanol output carried third-party certification in 2025, forcing mills to fund compliance upgrades that raise cash costs by USD 0.02-0.04 per liter.

Other drivers and restraints analyzed in the detailed report include:

• Sugarcane Feedstock Advantage Underpins Cost Leadership
• Flex-Fuel Fleet Expansion Sustains Demand Elasticity
• Soy-Oil Price Volatility Squeezes Biodiesel Margins

Segment Analysis

Bioethanol retained a 55.8% hold on the Brazil biofuel market in 2025, reflecting half a century of fermentation experience and widespread flex-fuel fleet adoption. SAF, though less than 2% in 2025, is scaling at 25.6% CAGR, buoyed by airline offtake contracts and hydrotreatment investments. Biodiesel’s 28% share rests on B15 mandates but faces soy-oil margin risk, while HVO capacity under construction signals a pivot to higher energy density diesel substitutes.

SAF becomes the fastest rising slice of the Brazil biofuel market as Petrobras and Raízen accelerate refinery retrofits. Azul aims for 10% jet blending by 2030, equivalent to 150 million liters yearly commitment, and Embraer certification removes technical doubts. Biodiesel share growth tilts on feedstock diversification toward used cooking oil and animal fats to escape soy-oil volatility, while bio-naphtha lines cater to petrochemical clients but remain niche.

First-generation pathways commanded 69.3% of the Brazil biofuel market in 2025, thanks to 400 cane mills and cash costs under USD 0.35 per liter. Second-generation cellulosic ethanol is growing at a 15.2% CAGR as mills monetize the 140 million-ton annual bagasse and straw stream.

Second-generation output reached 80 million liters in 2025 and pockets higher CBIO revenue, generating 1.8 credits per cubic meter versus 1.2 for first-generation fuel. GranBio’s plant restart illustrates debt-restructuring efficacy, while enzyme firms target cost cuts to USD 0.30 per liter by 2028, underpinning break-even economics.

Complete Report Scope:

• By Fuel Type
  • Bioethanol
  • Biodiesel (FAME)
  • Renewable Diesel/HVO
  • Sustainable Aviation Fuel (SAF)
  • Bio-naphtha and Other Drop-in Biofuels
• By Generation
  • First-Generation (Sugar and Starch)
  • Second-Generation (Cellulosic)
  • Third-Generation (Algae-based)
  • Fourth-Generation (Synthetic Biology/Photobiological)
• By Feedstock
  • Sugar Crops (Sugarcane, Sugar Beet)
  • Starch Crops (Corn, Wheat, Cassava)
  • Oilseeds (Soy, Rapeseed, Palm)
  • Used Cooking Oil and Animal Fat
  • Lignocellulosic Agri-Residues
  • Algae
• By Technology
  • Fermentation
  • Trans-esterification
  • Hydrotreatment (HVO/SAF)
  • Gasification and FT-Synthesis
  • Pyrolysis and Upgrading
• By End-use Sector
  • Road Transport
  • Aviation
  • Marine
  • Power Generation and Heating

List of Companies Covered in this Report:

• Raízen S.A.
• BP Bunge Bioenergia S.A.
• Petrobras Biocombustíveis S.A.
• Atvos Agroindustrial Investimentos S.A.
• Brasil BioFuels
• BSBios Indústria e Comércio de Biodiesel
• GranBio Investimentos
• Cargill Agrícola S.A.
• ADM do Brasil Ltda.
• Cofco International Brasil
• Copersucar S.A.
• Biosev S.A.
• FS Bioenergia
• Louis Dreyfus Company Brasil
• Infinity Bio-Energy
• Ubrabio (Union of Biodiesel & Biokerosene)
• ECB Group (Omega Green)
• Tereos Açúcar & Energia Brasil
• Usina Alta Mogiana
• Usina São Martinho
• Usina CerradinhoBio
• Usina Caeté
• Caramuru Alimentos
• Imcopa Food Ingredients

Additional Benefits:

• The market estimate (ME) sheet in Excel format
• 3 months of analyst support