Industrial Biorefinery Market– Global Industry Size, Share, Trends, Opportunity, and Forecast, Segmented by Product (Energy, Chemical and Material), By Production Facility Size (Small and medium-sized production facility, and large production facility), By Feedstock, (Primary Biomass and Secondary Biomass), By Process (Thermochemical, Biochemical, Chemical, and Mechanical & Thermomechanical), By Region, Competition 2021-2031F

Forecast Period	2027-2031
Market Size (2025)	USD 173.95 Billion
CAGR (2026-2031)	9.92%
Fastest Growing Segment	Thermochemical
Largest Market	Asia Pacific
Market Size (2031)	USD 306.82 Billion

Market Overview

The Global Industrial Biorefinery Market will grow from USD 173.95 Billion in 2025 to USD 306.82 Billion by 2031 at a 9.92% CAGR. Industrial biorefineries are integrated processing facilities that convert biomass feedstocks into a spectrum of chemicals, fuels, and power. The primary drivers supporting market growth include increasing regulatory mandates for carbon reduction and a strategic global shift toward energy independence to mitigate reliance on fossil fuels. These factors are encouraging heavy industries to adopt sustainable processing methods. According to the World Bioenergy Association, in 2024, bioenergy installed capacity reached 151 GW globally. This data highlights the expanding infrastructure scale that is underpinning the transition to renewable industrial processes.

A significant challenge impeding market expansion is the substantial capital investment required to establish advanced technical infrastructure. The complex logistics involved in securing a consistent and affordable supply of biomass further complicate operations and deter potential investors. These financial and supply chain hurdles make it difficult for renewable alternatives to compete directly with established petrochemical products without sustained government incentives.

Key Market Drivers

The implementation of stringent environmental regulations and carbon reduction mandates is the primary catalyst reshaping the Global Industrial Biorefinery Market. Governments worldwide are enforcing strict emission limits and circular economy frameworks, compelling heavy industries to transition from fossil-fuel dependence to sustainable bio-based alternatives. This regulatory pressure is directly driving a massive expansion in production capabilities for biodegradable materials and renewable chemicals. According to European Bioplastics, December 2024, in the 'Market Data Update 2024', global bioplastics production capacity is projected to surge from approximately 2.47 million tonnes in 2024 to 5.73 million tonnes by 2029. This significant increase underscores how compliance requirements are forcing manufacturers to invest in biorefinery infrastructure to meet the mandated quotas for sustainable packaging and industrial materials.

Increasing government incentives and subsidies for bio-based infrastructure serves as the second critical driver, bridging the gap between high initial capital requirements and commercial viability. Developing integrated biorefineries involves complex technical risks and substantial upfront costs that private capital often avoids without public financial backing. Consequently, state-sponsored funding programs are essential for de-risking advanced technologies and accelerating scale-up. For instance, according to the U.S. Department of Energy, October 2024, in the 'FY24 Scale-Up of Integrated Biorefineries Funding Opportunity Announcement', the agency allocated $12 million specifically to support pilot and demonstration-scale projects that reduce technology uncertainty for low-carbon biofuels and biochemicals. These financial mechanisms are successfully stimulating sector-wide growth. According to the International Energy Agency (IEA), in 2024, global demand for biogases is expected to accelerate significantly, climbing an estimated 30% over the period to 2030, reflecting the broader market momentum generated by these supportive policies.

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Key Market Challenges

The substantial capital investment required to establish advanced technical infrastructure presents a significant obstacle to the expansion of the industrial biorefinery market. Developing these integrated facilities involves complex processing units that demand high upfront funding, creating a barrier to entry for new stakeholders. This financial burden is further exacerbated by the logistical difficulties associated with securing a consistent and affordable biomass supply. The costs related to the collection, transport, and storage of feedstock elevate operational expenditures and extend the return on investment timeline, making the economic model less attractive compared to conventional refining.

These financial and operational pressures hinder the ability of renewable alternatives to compete directly with established petrochemical products. Investors often remain cautious regarding capital-intensive projects that lack immediate price parity with fossil fuels. According to the International Energy Agency, in 2024, global investment in low-emissions fuels reached only USD 20 billion, a figure that reflects a continued hesitation to allocate sufficient capital to this sector relative to traditional energy sources. This deficit in funding limits the scalability of biorefinery operations and restricts the industry's capacity to build the necessary density of infrastructure.

Key Market Trends

The transition toward second and third-generation biomass feedstocks is significantly altering market input dynamics. Biorefineries are increasingly retooling to process non-food biomass like agricultural residues and used cooking oils, reducing reliance on edible crops. This shift addresses food security concerns while buffering operations against agricultural volatility. Manufacturers are prioritizing these waste streams to ensure compliance with sustainability mandates. According to Neste, February 2025, in the 'Financial Statements Release 2024', the share of waste and residue feedstocks averaged 90% of the company's total renewable material inputs in 2024, highlighting the pivot toward waste-derived production.

The deployment of Artificial Intelligence (AI) and digital twin process optimization is emerging as a vital trend for efficiency. Operators are integrating virtual asset replicas with machine learning to predict failures and optimize energy usage in real-time. This digitalization enables facilities to manage biological feedstock variability more effectively than legacy controls. According to BioEnergy Times, October 2025, in the article 'Applied Computing and Kongsberg Digital to bring digital twins powered with industrial AI to energy operations', the Orbital AI platform demonstrated the potential to reduce refinery emissions and energy waste by up to 10%, underscoring the value of advanced digital tools.

Segmental Insights

The Thermochemical segment is projected to emerge as the fastest-growing category within the Global Industrial Biorefinery Market, driven by its distinct capability to convert diverse biomass feedstocks, including recalcitrant agricultural residues and municipal waste, into valuable intermediates. Unlike biochemical pathways, thermochemical processes such as gasification and pyrolysis efficiently transform organic matter into syngas and bio-oil, which are essential for manufacturing drop-in liquid fuels. This expansion is further catalyzed by supportive policies from regulatory bodies like the U.S. Department of Energy, which actively fund research into technologies that accelerate the production of sustainable aviation fuels and renewable hydrocarbons.

Regional Insights

Asia Pacific commands the Global Industrial Biorefinery Market, largely due to the region's abundant availability of cost-effective biomass feedstocks, such as agricultural residues and sugarcane. This natural advantage is reinforced by strong regulatory frameworks prioritizing energy security and environmental sustainability. For instance, China’s National Development and Reform Commission actively implements policies to shift industrial reliance from fossil fuels to bio-based alternatives, fostering significant market expansion. Similarly, nations like India support growth through aggressive ethanol blending programs. These strategic government initiatives, combined with rapid industrialization and rising local energy demand, solidify Asia Pacific’s position as the industry leader.

Recent Developments

• In November 2024, Johnson Matthey and Honeywell UOP signed a Memorandum of Understanding to collaborate on the development of advanced alternative fuels. The partnership focused on integrating their respective expertise in syngas solutions and fuel upgrading technologies to process diverse feedstocks, such as municipal solid waste and residual biomass. The collaboration aimed to reduce operating costs and accelerate the deployment of viable projects producing sustainable aviation fuel and other renewable fuels via Fischer-Tropsch and methanol pathways. This alliance was established to expand the range of available feedstocks for the biorefinery market, effectively addressing supply constraints for traditional bio-oils.
• In October 2024, the Italian energy company Eni finalized a comprehensive transformation plan for its chemical subsidiary, Versalis. The strategy involved a capital allocation of approximately €2 billion to reposition the business towards sustainable chemistry and biorefining while gradually phasing out traditional basic chemical operations at specific sites. The company detailed plans to construct new industrial plants dedicated to bio-based products and energy storage, aiming to significantly reduce carbon dioxide emissions. This strategic pivot underscored a major shift away from fossil-based feedstocks and towards the development of circular and renewable chemical platforms to ensure long-term profitability.
• In August 2024, Honeywell announced that the Inner Mongolia Jiutai Group had selected its proprietary UOP eFining technology for a large-scale sustainable aviation fuel project. This agreement represented the first global commercial license for this methanol-to-jet processing solution, which is designed to convert renewable eMethanol into low-carbon jet fuel. The technology was selected to facilitate the annual production of 100,000 tons of sustainable aviation fuel, directly supporting the aviation industry's efforts to reduce greenhouse gas emissions. The project highlighted the growing adoption of advanced biorefinery technologies capable of converting carbon dioxide and green hydrogen into valuable renewable fuels.
• In January 2024, Novozymes and Chr. Hansen completed a strategic statutory merger to create a new global biosolutions entity named Novonesis. This significant corporate development integrated a workforce of 10,000 employees and combined a diverse portfolio across thirty industries, including industrial biorefining and agriculture. The newly formed company announced its commitment to developing transformative biological solutions that improve production efficiency and reduce chemical reliance. The merger aimed to leverage joint capabilities in enzymes and microbes to support the global transition toward sustainable biological alternatives, with the combined group targeting annual revenues of approximately €3.7 billion.

Key Market Players

• Valero Energy Corporation
• Honeywell UOP
• Renewable Energy Group
• Neste
• Abengoa
• Godavari Biorefineries Ltd.
• Sekab
• TotalEnergies
• Borregard AS
• Vivergo Fuel

By Production Facility Size	By Feedstock,	By Process	By Region
Small and medium-sized production facility large production facility	Primary Biomass and Secondary Biomass	Thermochemical Biochemical Chemical Mechanical & Thermomechanical	North America Europe Asia Pacific South America Middle East & Africa

Report Scope:

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

• Industrial Biorefinery Market, By Production Facility Size:

• Small and medium-sized production facility
• large production facility

• Industrial Biorefinery Market, By Feedstock,:

• Primary Biomass and Secondary Biomass

• Industrial Biorefinery Market, By Process:

• Thermochemical
• Biochemical
• Chemical
• Mechanical & Thermomechanical

• Industrial Biorefinery 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