Saudi Arabia Biofuel Market: Renewable Energy Targets, Green Investments & Growth Outlook

According to IMARC Group's latest research publication, Saudi Arabia Biofuel Market size reached USD 992.5 Million in 2025. The market is projected to reach USD 2,520.0 Million by 2034, exhibiting a growth rate (CAGR) of 10.91% during 2026-2034.

How AI is Reshaping the Future of Saudi Arabia Biofuel Market

• Machine Learning for Feedstock Optimization: AI algorithms analyze fatty acid compositions and process parameters to optimize biodiesel production from waste cooking oil, predicting yields with 95 percent accuracy and reducing trial-and-error waste in Saudi refineries.
• Predictive Analytics for Production Efficiency: Advanced neural networks monitor transesterification processes in real-time, enabling Saudi facilities to maximize methane output while minimizing carbon emissions through continuous parameter adjustments and energy consumption optimization.
• Smart Supply Chain Management: AI-powered logistics systems track used cooking oil collection across the Kingdom, optimizing collection routes, predicting feedstock availability, and ensuring consistent supply to biofuel refineries in Jubail, Jeddah, and Riyadh.
• Automated Quality Control Systems: Computer vision and spectroscopy combined with AI verify biodiesel compliance with EN 14214 standards instantly, detecting impurities and ensuring product quality meets international export requirements for European markets.

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How Vision 2030 is Revolutionizing Saudi Arabia Biofuel Industry

Vision 2030 is fundamentally reshaping Saudi Arabia's biofuel sector through the Circular Carbon Economy framework and aggressive renewable energy targets. The Saudi Green Initiative's 187 billion dollar investment aims to reduce carbon emissions by 278 million tonnes annually by 2030, with 50 percent of electricity generation coming from renewable sources. The Circular Carbon Economy National Program has allocated 15 billion dollars specifically for carbon reduction initiatives, creating direct market opportunities for biofuel producers converting waste into clean energy. Royal Commissions in Jubail and Yanbu have mandated that used cooking oil within their jurisdictions be converted into biodiesel, establishing regulatory frameworks that support domestic production capacity. The Kingdom's carbon neutrality target by 2060 drives infrastructure investments in collection networks, processing facilities, and distribution systems, while export incentives position Saudi biofuels as competitive alternatives in European markets where shipping penalties increasingly favor low-carbon fuels.

Saudi Arabia Biofuel Market Trends & Drivers:

Domestic production capacity is expanding rapidly to meet both local demand and international export opportunities. The Biofuel Company operates the Gulf's largest biofuel refinery in Jubail, currently refining 12 million liters of B100 biodiesel annually from reclaimed cooking and palm oil. The company announced plans to triple refining capacity by 2025, with new facilities in Jeddah and Riyadh each targeting 12 million liters annually, bringing total national production to 36 million liters. In March 2023, Saudi Arabia inaugurated its first biofuel production plant in Al Jubail with yearly capacity of 4.2 million liters, serving primarily domestic markets while exporting excess output to Europe. These expansion efforts align with Vision 2030's carbon neutrality goals while establishing the Kingdom as a regional biofuel hub capable of serving maritime shipping demands across major ports and supporting the logistics sector's transition to low-carbon fuels.

Transportation sector decarbonization is accelerating biofuel adoption across commercial fleets and public infrastructure. In January 2024, Red Sea Global became the first Saudi company to use low-carbon biofuel in its entire delivery truck fleet, sourcing fuel from used cooking oil that emits only 0.17 kilograms of CO2 per liter compared to 2.7 kilograms from conventional diesel. This represents an 86 percent reduction in greenhouse gas emissions, demonstrating biofuel's practical effectiveness in meeting sustainability targets. The company's broader strategy includes transitioning to green hydrogen by 2030, positioning biofuels as a bridge technology during the renewable energy transition. Maritime applications are expanding as international shipping regulations impose significant financial penalties on vessels not using green low-sulfur fuels, creating demand for biodiesel blends at Saudi bunkering hubs. The Kingdom's strategic positioning as a regional logistics supply hub makes offering blended maritime biodiesels essential for maintaining port competitiveness.

Regulatory frameworks and waste management policies are creating structured feedstock supply chains that reduce biofuel production costs. Under the Basel Climate Change agreement, Saudi Arabia must reprocess its own waste into energy rather than exporting used cooking oil, establishing domestic priority for UCO conversion. The UAE's recent implementation of a 150 dollar per metric tonne export tax on used cooking oil demonstrates regional policy alignment supporting local biofuel industries. Some Royal Commissions have already mandated UCO-to-biodiesel conversion within their jurisdictions to support Vision 2030 objectives, creating guaranteed feedstock streams for producers. The government is reviewing policies around UCO export bans and taxation, with stakeholders proposing that establishing transparency, governance, and mandates for the UCO waste stream would significantly lower biodiesel end-user prices. These regulatory developments are transforming waste cooking oil from a drainage infrastructure problem into a valuable feedstock driving the Kingdom's renewable energy transformation.

Saudi Arabia Biofuel Market Industry Segmentation:

The report has segmented the market into the following categories:

Type Insights:

• Biodiesel
• Ethanol
• Others

Feedstock Insights:

• Coarse Grain
• Sugar Crop
• Vegetable Oil
• Others

Regional Insights:

• Northern and Central Region
• Western Region
• Eastern Region
• Southern Region

Competitive Landscape:

The competitive landscape of the industry has also been examined along with the profiles of the key players.

Recent News and Developments in Saudi Arabia Biofuel Market

• January 2026: Biofuel Company triples UCO refining capacity to 36 million liters annually across Jubail, Jeddah, and Riyadh sites, cutting urban transport emissions by 40% via B100 biodiesel mandates.
• July 2025: King Salman Airport inks MOU with Biofuel Company for B100 deployment in construction, replacing fossil diesel and supporting Vision 2030 sustainability targets.
• June 2025: Saudi Green Initiative advances algae-based biofuel pilots using wastewater, boosting feedstock efficiency by 30% in Riyadh circular economy projects.
• April 2025: Aramco launched the Kingdom's first CO2 Direct Air Capture test unit capable of removing 12 tons of carbon dioxide annually from the atmosphere, developed in collaboration with Siemens Energy, representing significant advancement in carbon removal technologies complementing biofuel decarbonization efforts.

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