Alternate Fuel and Raw Materials (AFR) - Market Share Analysis, Industry Trends & Statistics, Growth Forecasts (2026-2031)

The alternate fuel and Raw Materials Market size is expected to grow from USD 16.85 billion in 2025 to USD 18.33 billion in 2026 and is forecast to reach USD 25.45 billion by 2031 at 6.78% CAGR over 2026-2031. This report is Segmented by Fuel Type (RDF, SRF, Biomass, and Others), Raw Material Type (Fly Ash, BF Slag, and Others), End-User Industry (Cement, Power Generation, and Others) and Geography (North America, Europe, Asia-Pacific, South America, and Middle East and Africa). The Market Forecasts are Provided in Terms of Value (USD).

Global Alternate Fuel and Raw Materials (AFR) Market Trends and Insights

Rising Decarbonization Targets in Cement Manufacturing

Cement producers are using recovered fuels because thermal substitution can reduce fossil fuel use without replacing existing kiln systems. Germany’s cement sector raised its alternative-fuel use from 7% in 1990 to 77% in 2024 and has set a 90% target for 2045. Austria’s cement plants reached an 87.7% thermal substitution rate in 2024, using waste plastics, used tires, old oils, solvents, and paper-fiber residues. France’s sector achieved 55% fossil-fuel substitution in 2024, compared with 52% in 2023, and its industry association is targeting 80% by 2030. The alternative fuel and raw material market benefits when these targets move from voluntary commitments into plant-level procurement and capital programs. A peer-reviewed review found that 20% RDF thermal substitution can reduce global warming potential by 3.3% to 4.2%, giving operators a measurable environmental basis for fuel switching.

Landfill Diversion and Circular Economy Mandates

Landfill diversion policies are enlarging the pool of residual materials that can be processed into industrial fuel. The European Union’s landfill policy includes a 10% municipal-landfill target by 2035, increasing pressure to find alternatives for non-recyclable waste. An EU study found that SRF and RDF use in energy-intensive industries could reach 2 to 3 times current levels under suitable market conditions. The same study reported that cement and lime plants can substitute up to 85% of solid fossil fuels when fuel quality and volumes remain consistent. This puts greater value on sorting, drying, and contamination control across the alternative fuel and raw material market. It also creates pressure between energy recovery operators and cement kilns for high-calorific residual materials.

Inconsistent Waste Quality and Supply Reliability

Irregular material composition remains a major operational risk for kiln operators and fuel suppliers. Municipal waste in India often contains 40% to 50% moisture and high levels of sand, glass, and stone. These materials can damage equipment and require more extensive pre-processing before they can replace coal. In Europe, tighter quality specifications are increasing processing costs and favoring operators with established testing systems. The alternative fuel and raw material market can face local shortages when cement plants depend on imported or poorly sorted fuel. Cross-border shipments also remain exposed to national waste-management rules, which can disrupt established supply routes.

Other drivers and restraints analyzed in the detailed report include:

• Fossil Fuel Price Volatility and Energy Security Concerns
• Emerging-Market Cement Capacity and Waste Infrastructure Build-Out
• High Pre-Processing, Storage and Kiln Retrofit Capital Requirements

Segment Analysis

RDF held 29.3% of the alternative fuel and raw material market share in 2025, supported by established co-processing systems in Europe, India, and Southeast Asia. SRF is projected to expand at an 8.5% CAGR between 2026 and 2031 as kiln operators place greater weight on fuel consistency. SRF can offer tighter control over calorific value, chlorine, and mercury than mixed RDF. These characteristics support compliance with EN 15359 and more demanding emissions requirements. Higher-quality fuel can also reduce operational disruption at cement plants.

Biomass remains important in kiln main burners because wood residues, agricultural by-products, and processed pellets can lower reliance on fossil fuels. Turboden installed a 1.8 MW biochar-based power-generation project using organic waste, showing that biomass conversion can also support electricity production. Waste plastics are used as high-calorific precalciner fuel in many European kilns. The European waste hierarchy limits the use of clean plastic fractions for energy recovery because recycling receives priority. This directs fuel suppliers toward more detailed separation of mixed waste streams. ANDRITZ commissioned a commercial Steam-Ex pellet facility in Malaysia during 2026, using oil palm residues to produce advanced solid biofuels for industrial applications.

Complete Report Scope:

• By Fuel Type
  • Refuse-Derived Fuel (RDF)
  • Solid Recovered Fuel (SRF)
  • Biomass
  • Waste Plastics
  • Other Fuel Types
• By Raw Material Type
  • Fly Ash
  • Blast Furnace Slag
  • Foundry Sand
  • Steel Slag
  • Other Raw Material Types
• By End-User Industry
  • Cement Manufacturing
  • Power Generation
  • Metal Processing
  • New Energy Generation
  • Oil & Gas Industry
  • Other Energy-Intensive Industries
• By Geography
  • North America
    • United States
    • Canada
    • Mexico
  • Europe
    • Germany
    • France
    • Italy
    • Spain
    • United Kingdom
    • Poland
    • Russia
    • Rest of Europe
  • Asia-Pacific
    • China
    • India
    • Japan
    • South Korea
    • Australia
    • Indonesia
    • Vietnam
    • Thailand
    • Rest of Asia-Pacific
  • South America
    • Brazil
    • Argentina
    • Chile
    • Rest of South America
  • Middle East and Africa
    • Saudi Arabia
    • United Arab Emirates
    • Egypt
    • South Africa
    • Morocco
    • Rest of Middle East and Africa

Geography Analysis

Europe held 41.3% of the alternative fuel and raw material market in 2025 because it has mature co-processing systems, landfill restrictions, and long-standing waste directives. Germany’s cement sector used 77% alternative fuels in 2024 and is targeting 90% by 2045. France reached a 55% fossil-fuel substitution rate in 2024 and has a sector target of 80% by 2030 AFOCO. Italy and Spain offer further near-term volume potential as more regional fuel-processing capacity is developed. Poland and other Central and Eastern European countries also represent the next phase of infrastructure investment. Holcim Germany achieved an 81.2% thermal substitution rate in 2024, setting a high operational reference point for regional producers.

Asia-Pacific is expected to expand at an 8.7% CAGR from 2026 to 2031, the fastest pace among regions in the alternative fuel and raw material market. India and China are central to this outlook because both need larger waste-processing systems alongside cement capacity. India’s large municipal waste stream can support higher fuel use once moisture, contamination, and collection gaps are addressed. China is also investing in pre-processing technology that can increase the use of prepared fuels in cement kilns. Vietnam, Thailand, and Indonesia are important markets for new cement capacity and related waste-management investment. Japan, South Korea, and Australia provide stable demand from more mature industrial systems.

North America, South America, and the Middle East and Africa remain less developed but offer specific growth routes. In North America, state and provincial regulatory differences continue to limit co-processing compared with Europe. Biomass and renewable-gas projects remain relevant for managing organic and landfill-derived material. In South America, integrated waste and cement operators can expand capacity by building regional supply networks. The Middle East and Africa are earlier in the development cycle because waste rules and pre-processing systems are still evolving. The alternative fuel and raw material market in these regions depends on stronger links among municipalities, industrial waste generators, and cement plants.

List of Companies Covered in this Report:

• Averda International Limited
• Biffa Limited
• Blue Phoenix Group B.V.
• Ecoserv
• EEW Energy from Waste GmbH
• Enva Group Limited
• Fomento de Construcciones y Contratas, S.A.
• Geocycle SA
• Indaver NV
• PreZero International GmbH
• Ragn-Sells AB
• REMONDIS SE & Co. KG
• Renewi plc
• SARIA SE & Co. KG
• Sembcorp Environment Pte. Ltd.
• SUEZ S.A.
• Tradebe Environmental Services, LLC
• Veolia Environnement S.A.
• Viridor Limited

Additional Benefits:

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