Brazil Biofuel Market Size, Share Analysis, Growth and Forecast 2026-2034

Market Overview

The Brazil biofuel market reached a size of USD 13.9 Billion in 2025. The market is forecasted to expand significantly, attaining USD 28.8 Billion by 2034 with a compound annual growth rate (CAGR) of 8.44% during the forecast period 2026-2034. Growth is driven by rising demand for ethanol and biodiesel along with supportive government policies and investments in advanced biofuels. This thriving market is an essential part of Brazil's transition to sustainable and renewable energy solutions. For detailed insights, visit the Brazil Biofuel Market. 

Study Assumption Years

• Base Year: 2025
• Historical Years: 2020-2025
• Forecast Period: 2026-2034

Brazil Biofuel Market Key Takeaways

• The market size reached USD 13.9 Billion in 2025.
• The market is expected to grow at a CAGR of 8.44% during 2026-2034.
• Forecasted market size is USD 28.8 Billion by 2034.
• Brazil is a global leader in ethanol production, with 35.4 billion liters produced in 2023, marking a 15.5% increase over the previous year.
• The biodiesel sector is expanding rapidly, with a government mandate to increase the blend in diesel fuel to 20% by 2030.
• Significant investments are underway in advanced biofuels, including second-generation cellulosic ethanol plants.
• Supportive policies and rising international demand bolster market growth.

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Market Growth Factors

Brazil's biofuel market is really taking off, mainly thanks to its big ethanol production. In 2023, the country produced 35.4 billion liters of ethanol, which is a 15.5% jump from the previous year. Specifically, the anhydrous ethanol that gets mixed with gasoline saw a 13.5% rise, and sales of hydrated ethanol went up by 16.8%. The Southern region was the standout, churning out 17.2 billion liters, making up nearly half of the total production. The rise in flex-fuel vehicles, which can run on either ethanol or gasoline, is also boosting local demand. Plus, government blending rules and incentives are pushing up both consumption and production.

On the biodiesel front, Brazil is experiencing rapid growth, largely due to government efforts to incorporate more renewable energy. In March 2024, the Chamber of Deputies passed a plan to up the biodiesel blend in diesel fuel to 20% by 2030, starting at 15% in 2025. This new policy includes a system to trace fuel quality and allows for more voluntary use of biodiesel, which in turn is driving demand for essential crops like soybeans. This move is part of Brazil's broader strategy to transition energy sources, promote economic growth, and cut down carbon emissions.

Brazil is also putting a lot of money into advanced biofuels, particularly second-generation types like cellulosic ethanol made from agricultural waste, rather than food crops. Just last May, Raizen opened its second cellulosic ethanol plant in Sao Paulo, aiming to produce 440 million liters a year, backed by a hefty 1.2 billion reais investment to tap into the growing European market. They have plans for four more plants and might start contract sales again soon. These advanced biofuels are great for lowering greenhouse gas emissions and enhancing energy security, putting Brazil in the spotlight as a leader in cutting-edge biofuel technology.

Market Segmentation

Type:

• Biodiesel
• Ethanol
• Others

These types represent the core categories in Brazil’s biofuel market, with ethanol and biodiesel being the primary contributors driving growth and innovation.

Feedstock:

• Coarse Grain
• Sugar Crop
• Vegetable Oil
• Others

The market utilizes diverse feedstocks including coarse grains, sugar crops, and vegetable oils for biofuel production, reflecting the country’s varied agricultural base.

Regional Insights

The Southern region of Brazil dominated ethanol production in 2023 with 17.2 billion liters, representing 48.5% of the total ethanol output. This leadership underscores the region's pivotal role in the biofuel market, benefiting from extensive agricultural resources and infrastructure. Such dominance positions the South as a critical area for the ongoing expansion and investment in Brazil's biofuel sector.

Recent Developments & News

• In October 2024, Grupo Potencial announced a $108.86 million investment to expand biodiesel production at its Parana facility, increasing annual output from 900 million to 1.62 billion liters and becoming the world’s largest soy oil-based biodiesel producer.
• In August 2024, the Brazilian government allocated R$6 billion (around $1.09 billion) to promote biorefineries for sustainable aviation fuel (SAF) and marine biofuels, supported by the National Bank for Economic and Social Development (BNDES) and FINEP.
• In June 2024, Mubadala Capital announced plans to invest $13.5 billion in Brazil's biofuels sector over the next decade, including projects by Acelen and refinery conversion in Bahia by Petrobras.

Key Players

• Grupo Potencial
• Raizen
• Mubadala Capital
• Acelen
• Petrobras

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