The global push toward decarbonization is transforming the way the world sources its energy and chemicals. At the heart of this transition lies the biorefinery market, a sector growing at an impressive pace. Valued at US$ 148.4 billion in 2023, the market is projected to surge at a CAGR of 8.0% from 2024 to 2034, reaching US$ 360.5 billion by the end of the forecast period.
As the demand for alternative fuels and renewable chemicals increases, biorefineries are stepping up to fill the gap, offering sustainable solutions rooted in biomass. From producing low-carbon fuels to driving a circular economy, the biorefinery industry is primed for a transformative decade.
What Is a Biorefinery?
A biorefinery is a facility that processes biomass feedstocks into a wide array of valuable products, including biofuels, energy, chemicals, and materials. Biomass inputs can be as diverse as energy crops, agricultural residues, sugar and starch crops, and algae, each contributing to different types of outputs.
Biorefineries are categorized by generation type:
- First-generation: Food crops like corn and sugarcane.
- Second-generation: Agricultural residues and non-edible plants.
- Third-generation: Algae and advanced microorganisms.
This technology enables the maximum utilization of biological resources, promoting both energy security and sustainability.
Key Growth Drivers
1. Surge in Demand for Alternative Fuel Sources
With fossil fuel reserves projected to deplete by 2060, countries worldwide are urgently exploring renewable alternatives. Biorefineries are emerging as a cornerstone of this transition. They help build bio-based economies and promote the concept of a zero-waste society by using organic waste streams to create high-value products.
According to the International Energy Agency (IEA), global biofuel demand reached 4.3 exajoules (EJ) in 2022, the highest on record. Notably, most of this demand was met using waste and non-food crop-based feedstocks, which aligns perfectly with the core capabilities of modern biorefineries.
2. Policy Push for Renewable Energy Adoption
Governments are playing a critical role in accelerating market growth through stringent regulations and incentives for renewables. In Europe, the REPowerEU Plan, launched in response to geopolitical tensions, emphasizes the expansion of renewable energy and streamlining project approvals.
Companies are aligning with these frameworks by repurposing traditional oil refineries into biorefineries. In March 2024, NordFuel partnered with Chempolis Ltd. to launch a next-generation bioproduct facility in Finland aimed at meeting the region’s growing demand for sustainable energy.
Regional Trends
North America: The Largest Regional Market
In 2023, North America held the largest share of the global biorefinery market. This leadership position is bolstered by the region’s increasing investment in renewable diesel and sustainable aviation fuel (SAF). According to Rystad Energy, biofuel production in the U.S. is expected to rise by 53% by 2035, reflecting a shift toward cleaner, bio-based alternatives.
Europe: Leading the Regulatory Push
Europe remains at the forefront of environmental legislation, with the EU’s goal to reduce greenhouse gas emissions by 55% by 2030 compared to 1990 levels. Biorefineries are a central component in achieving these goals, with multiple new facilities being planned or under construction across the continent.
Innovations & Investments by Key Players
Leading companies such as Neste, Chevron, Valero Energy Corporation, TotalEnergies, and Cargill are driving innovation in biorefinery technologies. They are investing in R&D, targeting the development of low-carbon fuels and exploring new feedstock processing techniques.
Recent developments include:
- Verbio began converting its South Bend ethanol plant into North America’s second integrated biorefinery in May 2024.
- Eni S.p.A. is awaiting approval for its third biofuel production facility in Livorno, Italy, to strengthen its sustainable fuels portfolio.
- Numaligarh Refinery Ltd. (NRL) in India is starting ethanol production to support the nation’s green energy goals.
These initiatives reflect a broader trend of industrial biotechnology integration, enabling cleaner, more efficient conversion of biomass into high-value products.
Market Segmentation at a Glance
The biorefinery market is segmented based on feedstock, product, type, and technology:
- Feedstock: Energy crops, sugar & starch crops, agricultural residues, and more.
- Type: First-generation, second-generation, and third-generation.
- Product: Material-driven and energy-driven outputs.
- Technology: Thermochemical, physicochemical, and industrial biotechnology.
This segmentation provides companies with multiple entry points and niches to explore depending on their technological strengths and market strategies.
The Road Ahead
As the world accelerates toward a low-carbon future, biorefineries are set to play a pivotal role in global energy and material transition. They offer a compelling alternative to fossil fuels, reduce dependency on non-renewables, and promote the sustainable use of biomass.
With supportive government policies, strong R&D efforts, and rising industrial collaboration, the biorefinery market is well on its way to becoming a mainstream component of the global energy matrix.
