Biomass Pyrolysis Oil Market – Global Industry Size, Share, Trends, Opportunity, and Forecast, Segmented By Type (Fast Pyrolysis Oil, Slow Pyrolysis Oil, Hydrotreated Pyrolysis Oil), By Application (Fuel, Chemicals, Power Generation), By Region, By Competition, 2020-2030F

Market Overview

The Global Biomass Pyrolysis Oil Market was valued at USD 0.6 billion in 2024 and is expected to reach USD 1.8 billion by 2030 with a CAGR of 20.1% through 2030. The global biomass pyrolysis oil market is being propelled by a growing demand for sustainable and renewable energy alternatives to fossil fuels. As environmental concerns intensify and climate change mitigation becomes a global priority, industries and governments are increasingly shifting toward low-carbon energy sources. Biomass pyrolysis oil, derived from agricultural residues, forestry waste, and other organic materials, offers a viable, carbon-neutral solution that supports circular economy principles. Technological advancements in pyrolysis systems—such as improved reactor designs and feedstock flexibility—have enhanced production efficiency and reduced costs, making pyrolysis oil more commercially viable.

Additionally, expanding applications across various sectors, including transportation, power generation, and industrial heating, are driving market adoption. Governments worldwide are also incentivizing the use of bio-based fuels through subsidies, tax benefits, and stricter emissions regulations, further stimulating market growth. The abundance and renewability of biomass feedstock offer a strategic advantage, especially in developing regions with high agricultural activity. As global energy strategies increasingly prioritize diversification and decarbonization, biomass pyrolysis oil is emerging as a key player in the renewable energy mix, contributing to energy security, rural development, and reduced environmental impact. These factors collectively position the market for steady expansion in the coming years.

Key Market Drivers

Rising Demand for Renewable and Sustainable Energy Alternatives

The global energy landscape is undergoing a transformative shift as the urgency to reduce carbon emissions and mitigate climate change intensifies. One of the most significant drivers of the biomass pyrolysis oil market is the increasing demand for renewable and sustainable alternatives to conventional fossil fuels. Biomass pyrolysis oil, derived from the thermal decomposition of organic biomass under limited oxygen, offers a viable, carbon-neutral energy source. Unlike fossil fuels, which release sequestered carbon into the atmosphere, biomass-based fuels are part of a short-term carbon cycle, making them more environmentally friendly. 

The push for sustainability is being driven by global climate commitments, such as the Paris Agreement, which requires nations to significantly reduce their greenhouse gas emissions. In response, countries across the globe are incorporating renewable fuels into their national energy policies. For instance, the European Union’s Renewable Energy Directive and the U.S. Renewable Fuel Standard both mandate the increased use of renewable fuels, including bio-oils. These regulatory frameworks are creating a conducive environment for the growth of the biomass pyrolysis oil market. 

Industries such as power generation, transportation, and manufacturing are under growing pressure to adopt cleaner fuels. Biomass pyrolysis oil can be used as a substitute for furnace oil, diesel, and even coal in industrial boilers and furnaces, thereby helping industries lower their carbon footprints. In addition, the demand for second-generation biofuels, which do not compete with food crops, is gaining traction. Pyrolysis oil, produced from non-edible biomass like forest residue, agricultural waste, and sawdust, fits this category and meets sustainability goals without compromising food security.

Furthermore, the decentralized nature of biomass resources makes pyrolysis oil particularly appealing in rural and agricultural regions, offering energy independence and local economic development opportunities. Governments and development agencies are increasingly investing in bio-refinery projects and funding R&D initiatives to improve the efficiency and scalability of biomass pyrolysis technology. In 2023, global renewable energy capacity additions reached a record high of over 500 GW, (IRENA). The total installed renewable energy capacity worldwide exceeded 3,870 GW by the end of 2023, representing a 13.9% year-on-year increase. Global investment in renewable energy reached $495 billion in 2023, with the majority directed toward solar and wind power projects. The International Energy Agency (IEA) forecasts that renewables will supply over 42% of global electricity by 2030, up from about 30% in 2023.

Technological Advancements in Pyrolysis Processes and System Designs

A major driving force behind the growth of the global biomass pyrolysis oil market is the continuous advancement in pyrolysis technologies and reactor system designs. These innovations are significantly improving the economic viability, operational efficiency, and scalability of biomass-to-oil conversion processes. Pyrolysis—the thermochemical decomposition of organic material at elevated temperatures in the absence of oxygen—has evolved from a basic batch process to sophisticated continuous systems capable of producing higher yields of consistent-quality oil.

Recent breakthroughs in reactor design, such as fluidized bed reactors, ablative pyrolysis, and vacuum pyrolysis, have enhanced the heat transfer efficiency and reaction control, which in turn has increased the bio-oil yield and quality. Innovations in catalyst development and process optimization have further reduced tar formation and improved the stability and energy content of the resulting oil. Additionally, the integration of waste heat recovery systems, feedstock pre-treatment units, and automated process control systems has reduced energy consumption and operating costs.

These technological advancements are addressing some of the key limitations of pyrolysis oil, such as its high acidity, low heating value, and instability during storage. For example, new upgradation techniques—such as hydrodeoxygenation and emulsification—are being adopted to improve the physicochemical properties of pyrolysis oil, making it more suitable for end-use in transportation fuels and industrial burners. As a result, the scope of application for pyrolysis oil is expanding beyond traditional heat and power sectors to include marine fuels, diesel engines, and even chemical feedstock production.

Moreover, modular and mobile pyrolysis units are gaining popularity, especially in remote or biomass-rich regions. These compact systems can be deployed near biomass sources, minimizing transportation costs and logistics challenges. This decentralization of production enables small-scale players, local communities, and agricultural cooperatives to participate in the biomass-to-energy value chain.

On the research front, collaborations between academia, industry, and government bodies are yielding promising results. Global R&D efforts are focused on improving reactor throughput, extending catalyst lifespans, and developing hybrid systems that combine pyrolysis with gasification or fermentation. Pilot projects in countries like the Netherlands, Canada, and India are setting new benchmarks for scalability and commercial feasibility.

Download Free Sample Report

Key Market Challenges

Technical Limitations and Quality Issues of Pyrolysis Oil

One of the most pressing challenges facing the global biomass pyrolysis oil market is the technical limitation associated with the quality and usability of the oil produced. Unlike conventional fuels, pyrolysis oil—also referred to as bio-oil—is a complex, heterogeneous mixture with several unfavorable characteristics. These include high water content, low energy density, high acidity, chemical instability, and high viscosity. Such properties make direct use in conventional combustion engines or existing fuel infrastructure problematic without significant modification or upgradation.

For instance, the acidity of pyrolysis oil can lead to corrosion in storage tanks, pipelines, and engine components. Similarly, the presence of water reduces its heating value, and its thermal instability can lead to phase separation during storage. These quality issues hinder its acceptance as a drop-in fuel and limit its compatibility with established fuel supply chains, especially in transportation and power generation.

Moreover, upgradation technologies such as hydrodeoxygenation or catalytic cracking are required to improve the physicochemical properties of pyrolysis oil. However, these processes are capital-intensive and require high operating costs, often making the end product economically uncompetitive when compared to conventional fossil fuels or even other biofuels like biodiesel and ethanol. In addition, these upgradation techniques often require hydrogen, catalysts, and high pressure, which may not be feasible in decentralized or rural settings.

Furthermore, the lack of standardized protocols for quality assessment and performance benchmarking of pyrolysis oil is another barrier. The absence of universally accepted product standards makes it difficult for end-users to evaluate and trust the product, ultimately hampering market penetration. Different production technologies and feedstock types can yield varying oil qualities, resulting in inconsistency that deters industrial consumers from integrating pyrolysis oil into their operations.

Efforts are being made in research institutions and pilot plants worldwide to improve the consistency, quality, and stability of pyrolysis oil. Nevertheless, these solutions require time to mature and scale commercially. Until these technological barriers are overcome, the global acceptance and commercial viability of pyrolysis oil will remain constrained.

Economic Viability and Infrastructure Constraints

A significant challenge impeding the growth of the global biomass pyrolysis oil market is the issue of economic viability and inadequate infrastructure to support widespread adoption. The production of pyrolysis oil, especially at commercial scale, requires substantial capital investment in processing equipment, feedstock logistics, upgradation systems, and storage facilities. Despite ongoing technological advancements, the cost of producing high-quality pyrolysis oil remains higher than that of fossil-based alternatives, especially in regions where petroleum products are subsidized or readily available.

Biomass feedstock collection and transportation add further logistical and financial burdens. Biomass, by nature, is bulky and has low energy density, making it expensive to transport over long distances. This limits the geographical feasibility of large centralized pyrolysis plants, pushing toward smaller, decentralized units that may lack economies of scale. Additionally, biomass feedstock availability is seasonal and subject to regional variability, affecting the continuity and reliability of operations throughout the year.

The absence of a well-developed supply chain for biomass pyrolysis oil—from feedstock procurement to final distribution—hinders its ability to compete with conventional fuels. Unlike gasoline or diesel, there is no global or regional distribution infrastructure specifically designed for pyrolysis oil. Storage facilities also need to be resistant to corrosion and capable of handling chemically unstable fuels, which increases capital expenditure. Moreover, retrofitting existing engines, burners, or power plants to accommodate pyrolysis oil adds further to operational costs.

From a market economics perspective, the price volatility of biomass feedstock, coupled with inconsistent government subsidies and fluctuating oil prices, makes it difficult for investors and producers to achieve long-term financial planning. In countries where fossil fuel prices are low due to subsidies or domestic production, pyrolysis oil may not be cost-competitive without significant policy support or carbon pricing mechanisms.

Financing is another bottleneck. Since biomass pyrolysis oil technology is still considered emerging and carries perceived technological and market risks, it often struggles to attract private investment. Investors are wary of uncertain returns, long payback periods, and unclear regulatory frameworks. This lack of financial confidence slows down project development, especially in developing countries where energy diversification is most needed.

Key Market Trends

Increasing Integration of Pyrolysis Oil into Industrial Heat and Power Applications

A significant trend shaping the global biomass pyrolysis oil market is its growing integration into industrial heat and power generation applications. As industries worldwide face rising pressure to decarbonize their operations and reduce reliance on fossil fuels, pyrolysis oil is increasingly being adopted as a renewable substitute for heavy fuel oil, diesel, and coal. Particularly in sectors such as cement, steel, chemicals, and pulp & paper—where thermal energy is a major component of operations—biomass pyrolysis oil offers a practical solution for reducing greenhouse gas emissions.

Several pilot and commercial-scale projects have demonstrated the successful use of pyrolysis oil in industrial burners, boilers, and combined heat and power (CHP) plants. Pyrolysis oil is especially suitable for retrofitted systems that require medium- to high-temperature heating. Its adoption is further driven by government-imposed carbon taxes and stricter emission norms that penalize the use of fossil-based fuels. European countries, in particular, are at the forefront of this trend, with Sweden, Finland, and the Netherlands supporting pyrolysis oil integration through biofuel mandates and funding initiatives.

The push for cleaner manufacturing processes has also led companies to explore co-firing systems, where pyrolysis oil is used alongside traditional fuels to gradually reduce carbon intensity. Co-firing allows for a smoother transition toward full decarbonization while minimizing the need for major infrastructure overhauls. Additionally, biomass-rich regions in Asia and Latin America are exploring pyrolysis oil use in local industries, where feedstock availability and energy demand align to create attractive market conditions.

Technological developments in atomization and combustion systems are also aiding this trend. Advanced burners designed to handle the unique viscosity and combustion characteristics of pyrolysis oil are enabling more efficient and cleaner burning, thereby improving overall system performance. These advancements, along with standardized fuel handling systems, are removing historical barriers to pyrolysis oil adoption.

Rising Investments and Collaborations in Bio-Refinery Projects

Another pivotal trend influencing the global biomass pyrolysis oil market is the rising wave of investments, partnerships, and collaborations in bio-refinery projects. As the transition to a circular and low-carbon economy accelerates, governments, energy companies, and technology developers are increasingly investing in integrated bio-refinery models that use biomass to produce a variety of high-value outputs—such as pyrolysis oil, biochar, syngas, and specialty chemicals.

Unlike conventional single-product facilities, modern bio-refineries are designed to maximize the value of biomass feedstock by leveraging multiple process streams. Pyrolysis oil, in this framework, acts as both a fuel and a chemical feedstock, enhancing its market relevance. Companies are partnering across the value chain—from feedstock suppliers and technology providers to end-users and logistics firms—to create scalable, sustainable, and economically viable bio-refinery ecosystems.

Global players such as BTG Biomass Technology Group, Valmet, and Envergent Technologies (a Honeywell subsidiary) are advancing modular and scalable pyrolysis systems as part of broader bio-refinery strategies. Simultaneously, energy majors like Shell, TotalEnergies, and Neste are exploring pyrolysis oil as a blendstock in their renewable fuel production, signaling a mainstream shift toward diversified biomass utilization.

Public-private collaborations are further fueling this trend. National and regional governments are funding demonstration and commercialization projects to accelerate pyrolysis technology deployment. For example, the European Union’s Horizon programs and the U.S. Department of Energy's Bioenergy Technologies Office are actively supporting R&D and infrastructure development for advanced biofuels, including pyrolysis oil. These initiatives aim to reduce technical and financial risks, foster innovation, and attract private investment.

Startups and research institutions are also playing a vital role. They are developing innovative catalytic upgradation methods and hybrid systems that integrate pyrolysis with other biomass conversion techniques. Additionally, venture capital is flowing into cleantech companies with novel pyrolysis solutions, indicating strong investor confidence in the long-term potential of bio-refineries.

From a market perspective, this trend reflects the increasing convergence of energy, agriculture, and waste management sectors. Agricultural cooperatives, municipalities, and forest product companies are partnering with technology developers to transform local biomass waste into value-added products, including pyrolysis oil. This localized production approach promotes energy independence and rural economic development. The number of operational biorefineries worldwide reached over 1,200 facilities by the end of 2024, with major growth in North America, Europe, and Asia-Pacific. Between 2023 and 2025, more than 50 strategic partnerships and joint ventures have been announced globally to develop advanced biorefinery infrastructure.

Segmental Insights

Application Insights

Fuel segment dominated the Biomass Pyrolysis Oil Market in 2024 and is projected to maintain its leadership throughout the forecast period, primarily driven by the increasing global demand for sustainable and low-carbon energy alternatives. Pyrolysis oil, derived from the thermal decomposition of biomass, is gaining traction as a renewable substitute for fossil fuels in various sectors, particularly for heat and power generation. Its ability to directly replace heavy fuel oils and diesel in industrial boilers, furnaces, and turbines makes it an attractive option for industries aiming to reduce their carbon footprint. Additionally, as countries around the world implement stricter emissions regulations and carbon pricing mechanisms, businesses are under growing pressure to shift towards cleaner fuel sources—further propelling the use of pyrolysis oil.

Another key factor contributing to the segment's growth is the compatibility of pyrolysis oil with co-firing systems, allowing a gradual transition from fossil fuels without major infrastructure changes. The rising focus on energy security and the need to utilize locally available biomass resources also support the segment's dominance. Moreover, ongoing research and improvements in pyrolysis technology have enhanced the quality and stability of the oil, making it more efficient and viable as a commercial fuel. As a result, the fuel segment is expected to continue leading the biomass pyrolysis oil market, supported by both environmental imperatives and economic incentives.

Download Free Sample Report

Regional Insights

Largest Region

North America dominated the Biomass Pyrolysis Oil Market in 2024 and is anticipated to maintain its leadership throughout the forecast period, driven by strong policy support, technological advancements, and an increasing focus on renewable energy adoption. The United States and Canada, in particular, have established robust frameworks encouraging the use of bio-based fuels as part of their broader climate action goals. Supportive regulations such as the U.S. Renewable Fuel Standard (RFS) and various state-level initiatives have incentivized investment in pyrolysis technologies and commercial-scale production facilities. These policies have created favorable conditions for integrating pyrolysis oil into the regional energy mix, especially in industrial heating and power generation.

North America’s dominance is also fueled by its well-developed research and development infrastructure. Numerous universities, national laboratories, and private companies are actively working on improving pyrolysis techniques, upgrading oil quality, and enhancing process efficiency. The availability of diverse biomass feedstock—from forestry residues to agricultural waste—further strengthens the region’s supply base, ensuring a steady input for pyrolysis operations.

In addition, North America has witnessed growing interest from energy companies and startups investing in integrated bio-refinery models, where pyrolysis oil plays a central role. With strong government backing, innovative technology development, and increasing demand for sustainable fuels, North America is expected to maintain its leadership in the global biomass pyrolysis oil market in the coming years.

Emerging Region

South America is the emerging region in the Biomass Pyrolysis Oil Market, fueled by its abundant biomass resources and growing interest in renewable energy solutions. Countries such as Brazil, Argentina, and Colombia possess vast agricultural and forestry sectors, generating large volumes of biomass residues that can serve as cost-effective feedstock for pyrolysis oil production. With increasing global and regional pressure to reduce carbon emissions and transition away from fossil fuels, South American nations are beginning to explore pyrolysis oil as a sustainable alternative for industrial fuel and power generation.

Government support for renewable energy development, along with rising environmental awareness, is creating favorable conditions for market growth. Brazil, for example, already has a strong bioenergy infrastructure due to its experience with ethanol and biodiesel, positioning it well for expanding into pyrolysis-based technologies. Local startups and research institutions are also beginning to invest in pilot projects and technology partnerships to develop scalable pyrolysis solutions tailored to regional conditions.

Moreover, South America’s focus on rural development and energy independence in remote areas makes decentralized biomass-to-energy systems particularly attractive. The adoption of pyrolysis oil could offer both environmental and economic benefits by reducing waste, creating jobs, and supplying renewable energy. As investment and policy support increase, South America is expected to become a key growth frontier in the global biomass pyrolysis oil market.

 Recent Developments

• In August 2024, APChemi announced the launch of its PUREMAX Pyrolysis Oil Purification Plant, marking a significant step forward in the company's commitment to sustainable plastic recycling. Developed with the vision of upcycling single-use plastic waste, the PUREMAX plant is designed to purify pyrolysis oil derived from waste plastics, enabling its use as a high-quality feedstock for petrochemical and fuel production. This advanced purification technology represents a crucial milestone in APChemi’s circular economy journey, enhancing the value and usability of plastic-derived pyrolysis oil by removing impurities and improving its consistency and performance. The launch underscores APChemi’s dedication to delivering innovative and scalable solutions that address the growing global challenge of plastic waste, while supporting cleaner, more sustainable industrial processes. 
• In January 2025, Sulzer introduced PyroCon, an advanced technology designed to support the reduction of plastic and biomass waste. PyroCon enhances the pyrolysis process—a method of heating and liquefying plastic in the absence of oxygen—by rapidly cooling (quenching) the gases emitted during the reaction. This quick cooling minimizes harmful emissions and prevents further chemical reactions that could degrade the final product. The resulting pyrolysis oil can be utilized as a fuel or further refined into valuable chemicals, contributing to a more efficient circular economy. By improving both the quality and yield of pyrolysis oil, PyroCon plays a key role in reducing plastic waste and advancing sustainable waste-to-resource solutions.

Key Market Players

• Alterra Energy, LLC
• Bioenergy Ae Cote-Nord
• Green Fuel Nordic Oy
• Mk Aromatics Limited
• New Energy Kft.
• New Hope Energy
• Nexus Circular
• Plastic Advanced Recycling Corp.

Report Scope:

In this report, the Global Biomass Pyrolysis Oil Market has been segmented into the following categories, in addition to the industry trends which have also been detailed below:

• Biomass Pyrolysis Oil Market, By Type:

o   Fast Pyrolysis Oil

o   Slow Pyrolysis Oil

o   Hydrotreated Pyrolysis Oil      

• Biomass Pyrolysis Oil Market, By Application:

o   Fuel

o   Chemicals

o   Power Generation        

• Biomass Pyrolysis Oil Market, By Region:

o   North America

§  United States

§  Canada

§  Mexico

o   Europe

§  Germany

§  France

§  United Kingdom

§  Italy

§  Spain

o   Asia Pacific

§  China

§  India

§  Japan

§  South Korea

§  Australia

o   South America

§  Brazil

§  Colombia

§  Argentina

o   Middle East & Africa

§  Saudi Arabia

§  UAE

§  South Africa

Competitive Landscape

Company Profiles: Detailed analysis of the major companies present in the Global Biomass Pyrolysis Oil Market.

Available Customizations:

Global Biomass Pyrolysis Oil Market report with the given market data, Tech Sci Research offers customizations according to a company's specific needs. The following customization options are available for the report:

Company Information

• Detailed analysis and profiling of additional market players (up to five).

Global Biomass Pyrolysis Oil Market is an upcoming report to be released soon. If you wish an early delivery of this report or want to confirm the date of release, please contact us at [email protected]