Sustainable Fuel Market by Type (Renewable Fuels, Low Carbon Fossil Fuels), Fuel Type (Biofuels, E-Fuels, Hydrogen, Biomethane, CNG), End User (Road transportation, Marine, Aviation), State (Liquid, Gas) and Region - Global Forecast to 2029
[341 Pages Report] The global sustainable fuel market in terms of revenue was estimated to be worth $193.8 billion in 2024 and is poised to reach $299.9 billion by 2029, growing at a CAGR of 9.1% from 2024 to 2029. Rising concerns about climate change, stringent government regulations to reduce carbon emissions and reduced dependency on fossil fuels are few of the factors accelerating the growth of sustainable fuel market.
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Sustainable Fuel Market Dynamics
Driver: Growing environmental concerns associated with conventional fuels
Most transportation relies heavily on conventional fuels like gasoline and diesel, which when burned, emit carbon dioxide, a significant greenhouse gas, into the atmosphere, contributing to environmental issues. According to the United Nations Environment Programme (UNEP), the transportation sector accounts for approximately one-quarter of all greenhouse gas (GHG) emissions related to energy. Also, carbon dioxide emissions directly resulting from fossil fuel combustion in the road sector increased by 200 million metric tons from 2015 to 2022 According to the International Energy Agency (IEA). To meet the IEA Net Zero Emissions by 2050 Scenario (NZE Scenario), emissions must decrease by about one-third by 2030. Many countries are actively working to reduce their greenhouse gas emissions, necessitating a shift towards cleaner energy sources.
Sustainable fuels, such as low-carbon and renewable fuels, are crucial in transitioning to sustainable transportation. According to the World Economic Forum, Sustainable Aviation Fuel (SAF) made from renewable biomass and waste resources will play a significant role in achieving net zero emission goals. Additionally, hydrogen, biofuels, and renewable natural gas (RNG) have the potential to reduce emissions from the transportation sector.
Restraint: Requirement of high initial capital investment
The high initial investment acts as one of the major barriers to the adoption of sustainable fuels. The cost of building and operating biofuel, biomethane, e-fuels, and hydrogen plants is significant, making it difficult for these fuels to compete with fossil fuels. The investment encompasses costs associated with the installation of biorefineries, procurement, testing, maintenance, and feedstock. Sustainable fuel production is a capital-intensive endeavor, relying on advanced technologies with limited prior experience and insufficient historical data. The energy-intensive processes involved necessitate specialized energy production systems for co-generating heat or electricity. These factors contribute to the high expense and perceived undesirability of investing in sustainable fuels.
Opportunities: Transitioning towards renewable energy
Global economies' efforts to diminish their carbon footprint and greenhouse gas emissions have spurred the adoption of clean and sustainable energy alternatives. The increasing energy demand driven by rapid industrialization and urbanization has further hastened the shift towards renewable energy sources. This transition has prompted economies to utilize renewable energy sources such as biomass, hydroelectric, and geothermal power. For instance, vehicles can utilize biofuels like ethanol and biodiesel, derived from renewable biomass sources such as corn, sugarcane, and soybeans. Similarly, hydrogen fuel cells can use green hydrogen, another renewable energy source.
According to the International Energy Agency (IEA), biofuels and renewable electricity could reduce oil demand in the transportation sector by nearly 4 million barrels of oil equivalent per day by 2028. This reduction would help to limit the global carbon footprint and greenhouse gas emissions.
Challenges: Limited commercial availability of sustainable fuel powered vehicles
Sustainable fuels such as e-fuels, biofuels, biomethane, and hydrogen play a pivotal role in reducing carbon emissions whereas one of the major challenges faced by these fuels is their limited infrastructure. Hydrogen powered vehicles are still in their early stage of commercialization. According to the International Energy Agency’s (IEA) new Global EV Outlook 2023 report, there are approximately 72,000 Fuel Cell Electric Vehicle (FCEV) in the world as of 2022. The developing countries such as India, Brazil are still in its early stages of development.
Various countries like US, Brazil, UK, and other countries are focusing on flex fuel vehicles, which have the capability to function using gasoline or any combination of gasoline and ethanol, with blends reaching up to 83% whereas, 100% biofuel powered vehicles are still in its early stages of development. For instance, in August 2023, India has introduced world’s first electrified flex-fuel vehicle which can run on 100% ethanol. Also, the maritime sector is adopting hydrogen to reduce its emissions, but it is still in its early stages of development.
Sustainable Fuel Market Ecosystem
In this market, leading companies emerge as established and financially robust suppliers of sustainable fuels. With extensive experience, these firms offer a diverse product range, advanced technologies, and strong global sales and marketing networks. Their track record in the industry makes them dependable partners for customers seeking sustainable fuel solutions. These companies have shown agility in responding to market changes and consistently delivering top-quality products and services, establishing themselves as leaders in meeting the needs of the oil and gas sector. Prominent companies in this market include ADM (US), Shell plc (UK), Saudi Arabian Oil Co. (Saudi Arabia), Siemens Energy (Germany) and Chevron Corporation (US).
The e-fuels segment, by fuel type, is expected to be the fastest growing during the forecast period.
This report segments the sustainable fuel market based on fuel type into different types: biofuels, e-fuels, hydrogen, biomethane and compressed natural gas (CNG). The e-fuels segment is expected to be the fastest market during the forecast period. E-fuels are hailed as a sustainable and environmentally friendly alternative to conventional fuels, which are typically derived from fossil fuels. E-fuels are gaining prominence owing to the increasing government initiatives for cleaner fuel and achieving the goal of net-zero emissions.
By end user, marine is expected to be the fastest growing during the forecast period.
This report segments the sustainable fuel market based on phase into three segments: road transportation, marine, and aviation. The marine segment is expected to be the fastest growing during the forecast period. According to United Nations (UN), around 80% of global trade relies on maritime shipping, contributing to nearly 3% of total global greenhouse gas emissions. Achieving zero CO2 emissions from ships by 2050 is essential in combating climate change; therefore, various organizations and countries are setting different standards and policies. Enforcement of strict regulations to curb emissions in maritime drives the growth of sustainable fuels.
“North America: The largest region in the sustainable fuel market.”
North America is expected to be the largest region in the sustainable fuel market between 2024–2029, followed by Asia Pacific and Europe. North America has been leading the sustainable fuel market. Urbanization and population growth have resulted in the need for vast infrastructure development, which has propelled the energy demand across the region. The growth is driven by the enforcement of stringent pollution control regulations, efforts to reduce greenhouse gas emissions, and a growing preference for low-carbon and renewable energy alternatives. Reflecting the global trend towards sustainable fuels, investments in North America are on the rise. These increased investments in sustainable fuels are expected to bolster market growth in the region during the forecast period. The regional sustainable fuel market is experiencing growth due to the presence of leading sustainable fuel providers like ADM (US), INFINIUM (US) and Air Products and Chemicals, Inc. (US) also contribute to the market's development by creating opportunities for sustainable fuel projects.
Key Market Players
The sustainable fuel market is dominated by a few major players that have a wide regional presence. The major players in the sustainable fuel market include ADM (US), Shell plc (UK), Saudi Arabian Oil Co. (Saudi Arabia), Siemens Energy (Germany) and Chevron Corporation (US). Between 2019 and 2024, Strategies such as new product launches, contracts, agreements, acquisitions, and expansions are followed by these companies to capture a larger share of the sustainable fuel market.
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Report Metric |
Details |
Market size available for years |
2019–2029 |
Base year considered |
2023 |
Forecast period |
2024–2029 |
Forecast units |
Value (USD Million) |
Segments Covered |
Sustainable Fuel Market by Fuel Type, state, type, end user, and Region. |
Geographies covered |
North America, Europe, Asia Pacific, Middle East & Africa, and South America. |
Companies covered |
Shell plc(UK), Chevron Corporation(US), Air Liquide (France), Saudi Arabian oil Co. (Saudi Arabia), AUDI AG (Germany), Siemens Energy (Germany), Gasum Ltd (Finland), Linde PLC (Ireland), Air Products and Chemicals, Inc. (US), Electrochaea GmbH (Germany), ADM (US), Valero (US), Neste (Finland), Cargill, Incorporated (US), Nature Energy (Denmark), Archaea Energy Inc.(US), OPAL Fuels (US), Repsol (Spain), ENGIE (France), TotalEnergies (France), Uniper SE (Germany), Orsted A/S (Denmark), MAN Energy Solutions (Germany), Verbio SE (Germany), Kinder Morgan (US), E.ON SE (Germany), Messer Group (Germany), Equinor ASA (Norway), Dr. Ing. h.c. F. Porsche AG (Germany), MITSUBISHI MOTORS CORPORATION (Japan), Green Plains Inc. (US), POET, LLC (US), Wilmar International Ltd (Singapore), The Andersons, Inc. (US), EnviTec Biogas AG (Germany), Future Biogas Limited (Canada), Waga Energy (France), INFINIUM (US), Indian Oil Corporation Ltd (India), CNPC (China), BP p.l.c. (England), ConocoPhillips Company (US), |
This research report categorizes the sustainable fuel market based on fuel type, state, type, end user, and region.
On the basis of fuel type:
- Biofuels
- E-fuels
- Hydrogen
- Biomethane
- Compressed Natural Gas (CNG)
On the basis of state:
- Liquid
- Gas
On the basis of type:
- Renewable Fuels
- Low carbon Fossil Fuels
On the basis of end user:
- Road Transportation
- Aviation
- Marine
On the basis of region:
- North America
- Europe
- Asia Pacific
- Middle East & Africa
- South America
Recent Developments
- In May 2024, TotalEnergies and SINOPEC have been working together for many years, notably in Angola and Brazil in Upstream operations, and more generally in various domains such as oil, LNG, oil product trading, and engineering. Recently, the companies have joined forces to develop a 230,000 tons per year sustainable aviation fuel (SAF) production unit at a SINOPEC refinery in China.
- In March 2024, Gasum and the Norwegian Road Transport Association (NLF) signed a collaboration agreement to promote biogas as one of various green energy sources for the green transition. This will be accomplished by promoting biogas as a viable alternative to fossil fuels.
- In September 2023, OPAL Fuels signed a joint venture with South Jersey Industries, an energy infrastructure holding company, to develop, construct, own, and operate RNG facilities.
- In April 2023, Air Products and Chemicals, Inc. signed an agreement with Edmonton International Airport as the hydrogen and technology provider for Alberta’s first hydrogen fuel cell passenger vehicle fleet.
- In October 2022, Air Liquide, Chevron Corporation, LyondellBasell, a global chemical and plastic company, and Uniper SE intended to work on a collective study to assess and progress the creation of a hydrogen and ammonia production facility along the US Gulf Coast.
Frequently Asked Questions (FAQ):
What is the current size of the sustainable fuel market?
The current market size of the sustainable fuel market is USD 180.3 billion in 2023.
What are the major drivers for the sustainable fuel market?
Growing emphasis on reducing carbon emissions and transition towards renewable energy has emerged as some of major drivers for the sustainable fuel market.
Which is the largest region during the forecasted period in the sustainable fuel market?
North America is expected to dominate the sustainable fuel market between 2024–2029, followed by Asia Pacific and Europe.
Which is the largest segment, by fuel type, during the forecasted period in the sustainable fuel market?
Biofuels segment is expected to be the largest market during the forecast period. supportive policies and schemes such as tax credits and mandates to encourage the adoption of biofuels.
Which is the fastest growing segment, by end user, during the forecasted period in the sustainable fuel market?
Marine is expected to be the fastest growing market during the forecast period. The widespread adoption of sustainable fuels in marine sector is due to enforcement of strict regulations to curb emissions. .
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The study involved major activities in estimating the current size of the sustainable fuel market. Exhaustive secondary research was done to collect information on the peer and parent markets. The next step was to validate these findings, assumptions, and sizing with industry experts across the value chain through primary research. Both top-down and bottom-up approaches were employed to estimate the total market size. Thereafter, market breakdown and data triangulation were used to estimate the market size of the segments and subsegments.
Secondary Research
This research study on the sustainable fuel market involved the use of extensive secondary sources, directories, and databases, such as Hoover’s, Bloomberg, Factiva, IRENA, International Energy Agency, and Statista Industry Journal, to collect and identify information useful for a technical, market-oriented, and commercial study of the market. The other secondary sources included annual reports, press releases & investor presentations of companies, white papers, certified publications, articles by recognized authors, manufacturer associations, trade directories, and databases.
Primary Research
The sustainable fuel market comprises several stakeholders, such as sustainable fuel providers, technology providers in the supply chain. The demand side of this market is characterized by the rising demand for sustainable fuels in various end users such as road transportation, aviation, and marine. The supply side is characterized by rising demand for contracts from the industrial sector and mergers & acquisitions among big players. Various primary sources from both the supply and demand sides of the market were interviewed to obtain qualitative and quantitative information. Following is the breakdown of primary respondents:
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Market Size Estimation
Both top-down and bottom-up approaches were used to estimate and validate the total size of the sustainable fuel market. These methods were also used extensively to estimate the size of various subsegments in the market. The research methodology used to estimate the market size includes the following:
- The key players in the industry and market have been identified through extensive secondary research, and their market share has been determined through primary and secondary research.
- The industry’s value chain and market size, in terms of value, have been determined through both primary and secondary research processes.
- All percentage shares, splits, and breakdowns have been determined using secondary sources and verified through primary sources.
Sustainable Fuel Market Size: Top-Down Approach
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Sustainable Fuel Market Size: Bottom-Up Approach
Data Triangulation
After arriving at the overall market size from the above estimation process, the total market has been split into several segments and subsegments. Data triangulation and market breakdown processes have been employed to complete the overall market engineering process and arrive at the exact statistics for all the segments and sub-segments, wherever applicable. The data has been triangulated by studying various factors and trends from both the demand- and supply sides. Along with this, the market has been validated using both the top-down and bottom-up approaches.
Market Definition
Sustainable fuels are characterized as low or zero emission fuels that produce fewer greenhouse gas emissions compared to conventional fossil fuels when combusted. They encompass biofuels, e-fuels, hydrogen, biomethane, and other alternatives. These fuels are essential in the fight against climate change, reducing overall carbon content and promoting environmental sustainability.
The sustainable fuel market comprises revenues of companies offering sustainable fuels for various applications such as road transportation, aviation and marine.
Key Stakeholders
- Energy Regulators
- Renewable fuel producers
- Low carbon fuel producers
- Consulting companies in the energy and power sector
- Institutional investors/shareholders
- Governments and research organizations
Objectives of the Study
- To describe, segment, and forecast the sustainable fuel market, by fuel type, state, type, and end users in terms of value
- To forecast the market across five key regions, namely, North America, Europe, Asia Pacific, Middle East & Africa, and South America in terms of value
- To forecast the market by fuel type, in terms of volume
- To provide detailed information regarding key drivers, restraints, opportunities, and challenges influencing the growth of the market
- To strategically analyze the micromarkets1 with respect to individual growth trends, prospects, and contributions to the overall market size
- To provide the supply chain analysis, trends/disruptions impacting customers’ businesses, market map, ecosystem analysis, tariffs and regulations, pricing analysis, patent analysis, case study analysis, technology analysis, key conferences and events, trade analysis, Porter’s five forces analysis, key stakeholders and buying criteria, and regulatory analysis of the market
- To analyze opportunities for stakeholders in the sustainable fuels and draw a competitive landscape of the market
- To benchmark players within the market using the company evaluation matrix, which analyzes market players on several parameters within the broad categories of business and product strategies
- To compare key market players with respect to product specifications and applications
- To strategically profile key players and comprehensively analyze their market rankings and core competencies2
- To analyze competitive developments, such as contracts & agreements, investments & expansions, mergers & acquisitions, new product launches, partnerships, joint ventures & collaborations, in the sustainable fuel market
Available Customizations:
With the given market data, MarketsandMarkets offers customizations according to the specific requirements of companies. The following customization options are available for the report:
Product Analysis
- Product Matrix, which provides a detailed comparison of the product portfolio of each company
Company Information
- Detailed analyses and profiling of additional market players
Growth opportunities and latent adjacency in Sustainable Fuel Market