Aggressive federal incentives and tightening carbon targets are powerful market drivers for U.S. biofuels, while feedstock price volatility and limited logistics continue to impose market restraints. These dynamics are reshaping market opportunities and challenging stakeholders to optimize supply chains.
Aggressive policy support and tightening carbon targets are reshaping market dynamics and expanding market opportunities across the U.S. supply chain. At the same time, feedstock volatility and logistical constraints remain critical market challenges for producers and end-users.
U.S. Biofuels Market is estimated to be valued at USD 38.32 Bn in 2025 and is expected to reach USD 65.25 Bn in 2032, exhibiting a compound annual growth rate (CAGR) of 7.9% from 2025 to 2032.
Our market research team has conducted an in-depth market analysis to produce this U.S. Biofuels Market Forecast, offering strategic market insights and a comprehensive report for stakeholders aiming to capitalize on emerging industry trends. This examination of industry size and market revenue informs business growth strategies and expands the market scope to include next-generation feedstocks.
Key Takeaways
• Dominating Region (2025): Midwest region leads, with Iowa contributing 42% of U.S. ethanol capacity—evidenced by Archer Daniels Midland’s 2025 expansion at its Decatur, IL facility.
• Fastest-Growing Region (2025): Gulf Coast posted an 18% year-on-year rise in biodiesel output, driven by Louisiana’s 2025 blending mandates.
• Feedstock Segment: Dominant sub-segment – corn-based ethanol; POET LLC achieved 5.1 billion gallons in 2025. Fastest-growing sub-segment – cellulosic ethanol, with GranBio’s first commercial plant reaching 30 million liters in 2024.
• Product Segment: Dominant sub-segment – ethanol, holding approximately 90% market share of the U.S. biofuels mix in 2025. Fastest-growing sub-segment – biodiesel; Renewable Energy Group boosted capacity by 22% in 2024.
• End-User Segment: Dominant sub-segment – road transport, fueled by E10 blending in over 30 states. Fastest-growing sub-segment – aviation biofuel; Neste supplied 5 million gallons to Delta Air Lines in 2024.
• Our assessment of U.S. Biofuels Market share dynamics highlights the interplay of feedstock costs and regulatory credits.
Market Key Trends
One pivotal trend shaping the U.S. Biofuels Market is the rapid commercialization of cellulosic ethanol facilities, spurred by the extension of Section 45Z tax credits in the 2022 Inflation Reduction Act. According to our U.S. Biofuels Market report, cellulosic output jumped from 150 million liters in 2023 to 235 million liters in 2024, marking a 57% increase year-on-year. Leading producers such as POET LLC and GranBio initiated greenfield projects in Iowa and Louisiana, targeting a combined 400 million liters capacity by mid-2025. This shift is altering traditional market share dynamics, as cellulosic ethanol’s lower carbon intensity is increasingly valued under California’s Low Carbon Fuel Standard, driving higher U.S. Biofuels Market revenue per gallon. Our latest market insights reveal that cellulosic ethanol accounted for 6% of total bioethanol revenue in 2025, up from 3.5% in 2023. This emerging pattern underscores evolving market trends centered on advanced biofuels. Infrastructure networks are adapting to handle diverse biomass feedstocks, confirming that cellulosic innovation will be an enduring market trend and key market driver in the coming years.
Key Players
Archer Daniels Midland
Renewable Energy Group
Valero Energy Corporation
Darling Ingredients Inc.
Cargill Inc.
POET LLC
Green Plains Inc.
Flint Hills Resources
Marathon Petroleum Corporation
BP (US)
Shell New Energies
Chevron
Novozymes
GranBio
The following list highlights primary market players and market companies in the U.S. biofuels industry. In 2025, Archer Daniels Midland partnered with LanzaTech to pilot carbon recycling for ethanol production, boosting throughput by 10% at its Illinois facility. In 2024, Renewable Energy Group acquired Valero’s Meraux biodiesel plant, increasing its capacity by 100 million gallons and enhancing its Gulf Coast footprint. Several market players have adopted market growth strategies—joint ventures, acquisitions and greenfield expansions—to capture rising market revenue and bolster industry share.
FAQs
1. Who are the dominant players in the U.S. Biofuels Market?
Dominant players include Archer Daniels Midland, Renewable Energy Group, Valero Energy Corporation, Darling Ingredients, Cargill and POET LLC, all of which lead in corn-based ethanol, biodiesel refining and advanced biofuel projects.
2. What will be the size of the U.S. Biofuels Market in the coming years?
Our analysis projects the market will grow from USD 38.32 Bn in 2025 to approximately USD 64.50 Bn by 2032 at a CAGR of 7.9%.
3. Which end-user segment has the largest growth opportunity?
Road transport remains the largest segment by volume, but aviation biofuel is the fastest-growing end-use, driven by sustainable aviation fuel mandates and offtake agreements with major carriers.
4. How will market development trends evolve over the next five years?
Expect continued expansion of cellulosic ethanol, scaling of sustainable aviation fuel, stronger state-level blending mandates and more public-private partnerships to reduce carbon intensity.
5. What is the nature of the competitive landscape and challenges in the U.S. Biofuels Market?
The landscape is moderately consolidated among integrated agribusiness and energy majors. Key challenges include feedstock price volatility, logistics infrastructure constraints and evolving policy frameworks.
6. What go-to-market strategies are commonly adopted in the U.S. Biofuels Market?
Producers leverage partnerships and joint ventures for technology licensing, pursue M&A to scale capacity, deploy greenfield plants for advanced feedstocks and secure long-term offtake agreements to hedge against market fluctuations.
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