Aviation Biofuel Market Size, Share, Growth Analysis, By Type(HEFA, HVO, FT, SIP), By Application(Commercial and Military), By Region - Industry Forecast 2025-2032

Aviation Biofuel Market size was valued at USD 42.46 Billion in 2023 and is poised to grow from USD 44.97 Billion in 2024 to USD 71.12 Billion by 2032, growing at a CAGR of 5.9% during the forecast period (2025-2032).

The global aviation biofuel market has witnessed significant growth and advancements in recent years. The aviation biofuel market is where sustainable aviation fuels are taking steps to address the aviation industry's growing environmental concerns. These fuels are key drivers in boosting market growth as they meet the industry's needs while addressing environmental issues. The fluctuating oil and gas prices continually impact aircraft fuel, driving up demand due to various new commercial and military applications emerging alongside increased air transport and a growing fleet of airplanes. The aviation fuel industry is expected to grow as major players like United Airlines invest in initiatives to support sustainable aviation fuel (SAF) development. For instance, United Airlines established the sustainable flight fund in February 2023, aiming to assist startups focusing on eco-friendly aviation fuel with over USD 100 million in contributions from companies like Boeing, GE Aerospace, Honeywell, JP Morgan Chase, and Air Canada.

Given aviation's significant greenhouse gas emissions, there's a pressing need to transition to cleaner energy sources for airplanes. Opportunities in the aircraft biofuel sector are projected to increase as more countries commit to reducing emissions under the Paris Agreement, attracting investment into renewable energy markets. However, challenges such as limited raw resources for fuel production, refinery constraints essential for optimal utilization of these sources, and supply chain issues affecting fuel blending and performance may hinder the adoption of environmentally friendly aircraft fuel. Additionally, rising crude oil prices and concerns about lubricant pollution are expected to restrain market growth.

Renewable aviation fuel may not be readily accessible initially, as production capabilities are developed on a contractual basis rather than as a commodity, making it challenging for biofuel plants to achieve sustainability at scale. The increasing costs of developing biofuel plants post-operation further complicates reaching sustainability goals.