Bioliquid Heat & Power Generation Market – Global Industry Size, Share, Trends, Opportunity, and Forecast, Segmented By Fuel Type (Bioethanol, Biodiesel and Others), By Technology (Engine, Turbine and Others), By Region, Competition 2021-2031F

Forecast Period	2027-2031
Market Size (2025)	USD 2.62 Billion
CAGR (2026-2031)	8.23%
Fastest Growing Segment	Biodiesel
Largest Market	Europe
Market Size (2031)	USD 4.21 Billion

Market Overview

The Global Bioliquid Heat & Power Generation Market will grow from USD 2.62 Billion in 2025 to USD 4.21 Billion by 2031 at a 8.23% CAGR. The Global Bioliquid Heat & Power Generation Market utilizes liquid fuels derived from biomass, such as vegetable oils, biodiesel, and bioethanol, to produce electricity and thermal energy through combustion engines or turbines. Key drivers accelerating market growth include stringent government decarbonization mandates aiming to reduce fossil fuel dependency and the critical requirement for dispatchable renewable power to stabilize grids against intermittent sources like wind and solar. Additionally, the economic capability to valorize agricultural residues and waste streams provides a fundamental impetus for adoption that is distinct from temporary technological trends.

A significant challenge hindering expanding market saturation is the high volatility of feedstock prices and availability, often exacerbated by the ethical competition between land use for food versus fuel. According to the World Bioenergy Association, in 2024, global bioenergy electricity generation reached 711 TWh. While this figure illustrates the substantial scale of the broader biomass power sector, the specific expansion of bioliquid applications remains constrained by these complex upstream supply chain logistics and sustainability certification requirements.

Key Market Drivers

The implementation of supportive renewable energy policies and incentives serves as the primary catalyst for the Global Bioliquid Heat & Power Generation Market. Governments worldwide are enacting blending mandates and fiscal subsidies to accelerate the transition from fossil fuels to bioliquids in thermal and power applications. These regulatory frameworks reduce the green premium associated with biofuel production, making sustainable liquid fuels economically viable for utilities and industrial operators. According to the International Energy Agency (IEA), October 2024, in the 'Renewables 2024' report, renewable fuel deployment is set to expand by 4 EJ by 2030, driven largely by dedicated support policies in major economies like India, Brazil, and the United States. This policy-driven demand ensures a stable investment environment for expanding bioliquid infrastructure.

Escalating global focus on decarbonization and carbon emission reduction further propels the adoption of bioliquid technologies, particularly in sectors requiring high-temperature heat or dispatchable electricity. Industries facing strict carbon constraints utilize bioliquids to maintain operational continuity while significantly lowering greenhouse gas footprints compared to coal or diesel. This urgency to decarbonize supply chains drives production scaling and integration of bioenergy into the wider power mix. According to the Energy Institute, June 2025, in the '2025 Statistical Review of World Energy', renewables met 32% of global electricity supply in 2024, reflecting the intensified industrial commitment to low-carbon energy sources. According to the International Renewable Energy Agency (IRENA), in 2025, global bioenergy capacity expanded by 4.6 GW in 2024, underscoring the growing role of biomass-based solutions in the transition to a net-zero energy system.

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Key Market Challenges

The primary impediment restricting the expansion of the Global Bioliquid Heat & Power Generation Market is the high volatility of feedstock prices and availability, compounded by the ethical competition between land use for food versus fuel. Bioliquid power generation relies heavily on agricultural commodities like vegetable oils and biodiesel, which are inherently susceptible to unpredictable weather patterns, geopolitical instability, and competing demand from the food sector. These factors create a precarious supply chain where the cost of fuel can fluctuate drastically, undermining the economic viability of power plants that require stable operating expenditures to remain competitive with other renewable baseload options.

This instability directly hampers market saturation by creating an unfavorable investment climate and disrupting consistent power generation. Investors are hesitant to commit capital to infrastructure where the primary input cost is variable and ethically contested, leading to stalled capacity additions. According to the Food and Agriculture Organization, in late 2024, the global vegetable oil price index surged by 32% compared to the previous year, driven by tightening supplies in major producing regions. Such sharp price escalations erode profit margins and force operators to scale back production, effectively preventing bioliquid technologies from achieving the broad adoption necessary to significantly increase their share of the global energy mix.

Key Market Trends

The rapid adoption of Hydrotreated Vegetable Oil (HVO) constitutes a transformative trend in the bioliquid power sector, primarily due to its ability to serve as a drop-in replacement for conventional diesel in existing infrastructure. Utilities and data center operators are increasingly utilizing this paraffinic fuel to decarbonize backup and peaking power generation without requiring capital-intensive engine modifications or voiding warranties. This compatibility allows for an immediate reduction in lifecycle emissions while maintaining the reliability essential for critical power systems. According to Caterpillar, May 2025, in the '2024 Sustainability Report', customers utilizing their rental power solutions have consumed over 30 million liters of HVO since 2022, demonstrating the scaling commercial viability of this fuel in demanding industrial applications.

Simultaneously, the market is undergoing a structural transition toward second-generation and waste-based feedstocks to mitigate ethical concerns regarding land use and improve supply chain resilience. Producers are shifting procurement strategies away from virgin crop oils toward circular inputs such as used cooking oil and animal fat residues, which decouple energy production from volatile food commodity markets. This shift not only enhances the sustainability profile of bioliquid power but also aligns with tightening regulatory standards that incentivize non-food biomass. According to Neste, February 2025, in the 'Annual Report 2024', the share of waste and residue feedstocks averaged 90% of the company’s total renewable material inputs in 2024, highlighting the industrial scale of this strategic pivot toward circular economy principles.

Segmental Insights

Based on recent industry analysis, the Biodiesel segment is recognized as the most rapidly expanding category within the Global Bioliquid Heat & Power Generation Market. This significant growth is primarily driven by the fuel's ability to function as a direct substitute for conventional fossil fuels in existing diesel generators and heating boilers without requiring expensive infrastructure modifications. Furthermore, stringent decarbonization mandates from regulatory bodies such as the U.S. Environmental Protection Agency and the European Commission are aggressively incentivizing the adoption of renewable fuel blends. Consequently, the industrial and residential sectors are increasingly utilizing biodiesel to ensure reliable power generation and heating while meeting rigorous environmental sustainability targets.

Regional Insights

Europe maintains a leading position in the Global Bioliquid Heat & Power Generation Market, driven largely by robust regulatory frameworks established by the European Commission. The implementation of the Renewable Energy Directive compels member nations to increase their share of renewable energy, directly promoting the use of bioliquids as a viable alternative to coal and oil. This legislative pressure encourages substantial infrastructure development for district heating and industrial power generation. Furthermore, national governments provide financial incentives that lower adoption barriers, ensuring that the region consistently prioritizes low-carbon energy strategies over traditional fossil fuel dependency.

Recent Developments

• In March 2025, Wärtsilä partnered with a Brazilian energy company to conduct a pioneering trial using ethanol as a fuel for power generation. The project involves testing the Wärtsilä 32M engine with sugarcane-derived ethanol to validate its efficiency and reliability for producing electricity. This initiative represents a significant step towards utilizing widely available liquid biofuels to decarbonize the power sector. The agreement includes operating the engine for up to 4,000 hours over two years, potentially establishing ethanol as a viable cleaner alternative to fossil fuels in the country's upcoming energy auctions.
• In December 2024, MAN Energy Solutions announced a collaboration with an international general contractor to construct a bioenergy plant in Corsica, France. The 130 MW facility, which will be operated by a major French utility, is set to be powered by eight MAN 18V51/60 engines optimized to run on 100% liquid biomass fuel derived from plant origin. This project aims to guarantee the energy security of the region while adhering to strict environmental standards. The engines will utilize the bioliquid to generate dispatchable power, replacing an older heavy fuel oil plant and significantly reducing emissions.
• In December 2024, the Power Systems division of Rolls-Royce and its partner AVK announced a significant sales milestone for their hydrotreated vegetable oil (HVO) compatible generators. The companies reported selling over 500 mtu generator sets to the data center, industrial, and building sectors throughout the year. These units, capable of running on renewable diesel, provide approximately 1.3 GW of standby power capacity. The collaboration highlights the growing market demand for sustainable power solutions that can reduce carbon emissions by up to 90% compared to fossil diesel without requiring engine modifications.
• In April 2024, Cummins Power Generation launched two new generator set models, the C2750D6E and C3000D6EB, designed for critical applications such as data centers and healthcare facilities. These units are powered by the QSK78 engine and were approved for use with paraffinic fuels, including hydrotreated vegetable oil (HVO), without necessitating any engine modifications. This product release allows operators to adopt renewable bioliquids to lower their carbon footprint while maintaining high power density and reliability. The launch underscores the manufacturer's commitment to providing lower-carbon fuel alternatives for large-scale stationary power generation.

Key Market Players

• Albioma SA
• Archer-Daniels-Midland Co
• Ameresco Inc
• Envitec Biogas AG
• Enviva Inc.
• Drax Group
• Strabag SE
• Pinnacle Renewable Energy Inc.
• Enerkem
• Green Plains Inc.

By Fuel Type	By Technology	By Region
Bioethanol Biodiesel and Others	Engine Turbine and Others	North America Europe Asia Pacific South America Middle East & Africa

Report Scope:

In this report, the Global Bioliquid Heat & Power Generation Market has been segmented into the following categories, in addition to the industry trends which have also been detailed below:

• Bioliquid Heat & Power Generation Market, By Fuel Type:

• Bioethanol
• Biodiesel and Others

• Bioliquid Heat & Power Generation Market, By Technology:

• Engine
• Turbine and Others

• Bioliquid Heat & Power Generation Market, By Region:

• North America
• United States
• Canada
• Mexico
• Europe
• France
• United Kingdom
• Italy
• Germany
• Spain
• Asia Pacific
• China
• India
• Japan
• Australia
• South Korea
• South America
• Brazil
• Argentina
• Colombia
• Middle East & Africa
• South Africa
• Saudi Arabia
• UAE