Biofuels: From Feedstock to Fuel

Biofuels are fuels derived from biological materials, such as plants, animal fats, used cooking oil, organic waste, and algae. As demand for sustainable energy grows and businesses face increasing pressure to reduce GHG emissions, the biofuel market is expanding rapidly. Many companies worldwide are engaged in biofuel production.

Feedstocks for biofuels:

Biofuel feedstocks are the raw biological materials used to produce fuels. The following are common feedstocks used for biofuel production:

• Sugar crops (for ethanol): sugarcane, sugar beet, sweet sorghum
• Starch crops (for ethanol): corn (maize), wheat, cassava, barley
• Oils and fats (for biodiesel & renewable diesel): soybean oil, canola/rapeseed oil, sunflower oil, palm oil, used cooking oil (UCO), tallow/animal fats, corn oil, distillers’ corn oil
• Cellulosic biomass (advanced biofuels/ethanol/SAF): corn stover, wheat straw, rice straw, bagasse, forestry residues, wood chips/sawdust, energy grasses (switchgrass, miscanthus), short-rotation woody crops (poplar, willow)
• Wastes and residues (various fuels): municipal solid waste (biogenic fraction), food waste, manure, wastewater sludge, landfill gas/biogas
• Algae (emerging): microalgae oils and whole algal biomass

Biofuels are commonly grouped into:

• Biodiesel (FAME): Produced mainly from vegetable oils or waste oils and blended with diesel (e.g., B5, B20), and can be used in many diesel engines with little or no modification.
• Bioethanol: Typically produced from plant-based biomass such as sugarcane, corn, or agricultural residues by fermenting sugars and then distilling the alcohol. It’s mainly used as a renewable fuel blended with gasoline (e.g., E10, E15, E85).
• Renewable diesel (HVO): Renewable diesel is a drop-in diesel fuel made by hydrotreating fats and oils (e.g., vegetable oils, used cooking oil, animal fats) with hydrogen to produce hydrocarbons similar to petroleum diesel. It can be used in existing diesel engines and infrastructure without blending limits and typically has high cetane and low sulfur/aromatics.
• Sustainable aviation fuel (SAF): Sustainable aviation fuel is a jet fuel made from non-petroleum feedstocks—such as used cooking oil, waste fats, agricultural/forestry residues, or captured CO₂ combined with clean hydrogen—processed to meet aviation fuel specifications. It’s used as a “drop-in” blend with conventional jet fuel to reduce life-cycle greenhouse-gas emissions while remaining compatible with existing aircraft and fueling infrastructure.

According to data collected by Reswit Inc., 29% of biofuel companies worldwide produce biodiesel, followed by bioethanol (24%) and sustainable aviation fuel (20%).

Regional Insights

According to data collected by Reswit Inc., more than 580 companies produce biofuels worldwide. Among these companies, 41% are based in North America, followed by 27% in Europe and Central Asia, 12% in East Asia and Pacific, 7% in South Asia, 6% in Latin America and Caribbean, 5% in Sub-Saharan Africa, and 2% in the Middle East and North Africa.

The market direction: why SAF is the headline

SAF is becoming the focal point because aviation has few near-term alternatives. Airlines can blend SAF into conventional jet fuel without redesigning aircraft, and many governments are introducing SAF targets or incentives.

But SAF faces a classic scaling problem:

• demand is rising fast,
• production capacity is still limited,
• feedstocks are constrained,
• and costs remain higher than conventional jet fuel.

That combination is driving investment, partnerships, and intense scrutiny on sustainability and certification.

What’s next for biofuels?

Here’s where the momentum is building:

• More waste-based and residue-based fuels (better sustainability, but limited volumes)
• Process innovation to improve yields and reduce cost (especially for advanced pathways)
• Carbon intensity as a currency—fuels will increasingly compete on verified lifecycle emissions, not just price
• Integration with carbon capture in certain pathways (e.g., ethanol plants capturing fermentation CO₂)
• Hybrid systems—biofuels plus renewable hydrogen, better upgrading, and co-processing in refineries

Biofuels are not a silver bullet, but they are one of the most deployable tools we have for reducing emissions in sectors that can’t easily electrify. The winners in the next phase won’t just be those who can produce fuel—they’ll be those who can prove sustainability, secure feedstocks, and scale reliably.