Sustainable Fuel Market Report 2026

The sustainable fuel market size has grown rapidly in recent years. It will grow from $196.04 billion in 2025 to $220.46 billion in 2026 at a compound annual growth rate (CAGR) of 12.5%. The growth in the historic period can be attributed to government support for renewable energy, early biofuel commercialization, rising awareness of carbon emissions, development of alternative fuel pathways, initial hydrogen infrastructure investments.

The sustainable fuel market size is expected to see rapid growth in the next few years. It will grow to $349.5 billion in 2030 at a compound annual growth rate (CAGR) of 12.2%. The growth in the forecast period can be attributed to increasing net-zero emission targets, expansion of hydrogen economy initiatives, rising demand for sustainable transport fuels, growth in power-to-liquid technologies, increasing corporate decarbonization commitments. Major trends in the forecast period include increasing adoption of green hydrogen fuels, rising production of advanced biofuels, growing investment in synthetic fuel technologies, expansion of sustainable aviation fuels, enhanced focus on carbon-neutral energy.

The transition to renewable energy sources is expected to drive the growth of the sustainable fuel market in the future. This shift is motivated by various factors, including the need to address climate change, the rise in electricity consumption, the move away from fossil fuels, international agreements, and energy security concerns. Sustainable fuels, such as biofuels, green hydrogen, and synthetic fuels, play a key role in this transition by providing low-carbon alternatives to fossil fuels, reducing environmental impact, and promoting energy sustainability. For example, in September 2024, the Department for Energy Security and Net Zero, a UK-based governmental department, reported that renewable energy accounted for 51.6% of the UK’s total energy generation in the second quarter (Q2) of 2024, marking an increase of 9.9 percentage points compared to the same period in 2023. As a result, the growing shift towards renewable energy is fueling the demand for sustainable fuels.

Leading companies in the sustainable fuel market are focusing on developing innovative solutions, such as advanced biomass-to-fuel conversion technologies, to reduce carbon emissions and decarbonize hard-to-abate sectors. These technologies transform agricultural and forestry waste into low-carbon fuels, including renewable diesel, sustainable aviation fuel, and marine fuel, using advanced thermochemical or biochemical methods. For example, in October 2025, Honeywell International Inc., a US-based industrial technology company, launched its Biocrude Upgrading process technology. This innovation converts low-value lignocellulosic biomass into ready-to-use renewable fuels, addressing cost and feedstock limitations while enabling modular deployment to reduce project risks and support energy transition goals. The Biocrude Upgrading process utilizes pyrolysis oil intermediates and advanced catalyst systems to produce renewable fuels with higher carbon yields and lower production costs compared to traditional biofuel pathways, generating sustainable aviation fuel suitable for blending with conventional jet fuel.

In April 2024, Southwest Airlines Co., a US-based company, acquired SAFFiRE Renewables LLC for an undisclosed amount. This acquisition was aimed at expanding Southwest Airlines’ portfolio by incorporating SAFFiRE Renewables’ expertise in sustainable fuel solutions. SAFFiRE Renewables LLC is a US-based company that specializes in providing sustainable fuels.

Major companies operating in the sustainable fuel market are TotalEnergies SE, Neste Oyj, Cargill Inc, The Archer‑Daniels‑Midland Company, Aemetis Inc, Gevo Inc, World Energy LLC, Renewable Energy Group Inc, Diamond Green Diesel, LanzaTech Inc, Infinium Holdings Inc, UPM (biofuels), Algenol Biotech LLC, POET LLC, Alto Ingredients Inc, Green Plains Inc, Bangchak Corporation Public Co Ltd, Norsk e‑Fuel AS, Air Company, Woodland Biofuels Inc.

North America was the largest region in the sustainable fuel market in 2025. The regions covered in the sustainable fuel market report are Asia-Pacific, South East Asia, Western Europe, Eastern Europe, North America, South America, Middle East, Africa. The countries covered in the sustainable fuel market report are Australia, Brazil, China, France, Germany, India, Indonesia, Japan, Taiwan, Russia, South Korea, UK, USA, Canada, Italy, Spain.

The sustainable fuel market consists of sales of biodiesel, ethanol, biogas, alcohol fuels and processed engineered fuels. Values in this market are ‘factory gate’ values, that is the value of goods sold by the manufacturers or creators of the goods, whether to other entities (including downstream manufacturers, wholesalers, distributors and retailers) or directly to end customers. The value of goods in this market includes related services sold by the creators of the goods.

The market value is defined as the revenues that enterprises gain from the sale of goods and/or services within the specified market and geography through sales, grants, or donations in terms of the currency (in USD unless otherwise specified).

The revenues for a specified geography are consumption values that are revenues generated by organizations in the specified geography within the market, irrespective of where they are produced. It does not include revenues from resales along the supply chain, either further along the supply chain or as part of other products.

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