Asia Pacific Bioenergy Market

Indonesia used 14.2 million kilolitres of biodiesel in 2025, 105.2% of its 13.5 million kilolitre target under the 40% blend (B40), cutting diesel imports from about 8.3 million tonnes in 2024 to about 5 million, the Ministry of Energy and Mineral Resources (ESDM) reported on 8 January 2026. The Asia Pacific bioenergy market covers commercially sold modern bioenergy in Asia Pacific: fuel ethanol, biodiesel, renewable diesel and sustainable aviation fuel (SAF), electricity from biomass, biogas and biomethane, and wood pellets. Douglas Insights sizes it at USD 69.52 billion in 2025, about 2,780 petajoules (PJ) at an average USD 25.01 per gigajoule (GJ), and at USD 126.98 billion in 2035, a 6.21% compound annual growth rate (CAGR) from 2026. The study is the Asia Pacific row of our worldwide Bioenergy Market model and sits beside our Anaerobic Digestion Biogas Plants Market and Biodiesel Reactor Market reports; every figure follows the Douglas Insights research methodology.

Which bioenergy product earns the most value: biomass power, biodiesel or fuel ethanol?

Bioelectricity earns the most, 45.0% of 2025 Asia Pacific bioenergy value or about USD 31.28 billion, Douglas Insights estimates. Renewable diesel and sustainable aviation fuel grow fastest, at 16.5% a year to USD 10.22 billion by 2035.

Bioelectricity leads because the region burns more biomass for power than any other: China alone had 47.43 GW of biomass generating capacity at the end of 2025, about 28% of the world total, Science and Technology Daily reported on 19 July 2026 from the China Industrial Development Promotion Association’s annual biomass report. Its 45.0% share sits far above the 26.6% worldwide figure, and at 4.3% a year it reaches USD 48.53 billion by 2035, growing slowest of the six products because new plants now compete with cheaper solar and wind.

Biodiesel, USD 15.99 billion, holds 23.0% of value on Indonesian, Malaysian and Thai palm oil blends, and grows 6.7% a year to USD 30.44 billion as Indonesia moves to a 50% blend. Fuel ethanol, USD 12.51 billion, grows 6.4% on Indian, Chinese and Thai blending. Biogas and biomethane, USD 4.17 billion, grows 9.5% on Indian compressed biogas (CBG) and Chinese upgrading plants; wood pellets, USD 3.13 billion, grow 5.0% on Japanese and Korean power demand. Renewable diesel and SAF, USD 2.43 billion, is the smallest product but grows 16.5% as aviation blend mandates start. Product values for 2035 sum to USD 127.60 billion, 0.48% above the headline.

How does Asia Pacific bioenergy split by feedstock and end use?

Palm and other vegetable oils supply about 27.0% of 2025 Asia Pacific bioenergy value, Douglas Insights estimates; agricultural and forestry residues supply 34.0% and sugarcane and molasses 13.0%. Power generation is the largest end use at 45.0%.

Residues lead because Chinese and Indian biomass plants burn straw, rice husk and bagasse, and Japanese plants burn imported pellets and palm kernel shells. Palm and vegetable oils, about USD 18.77 billion of value, feed almost all regional biodiesel and a growing share of renewable diesel. Sugarcane juice and molasses, about 13.0%, and grain, about 8.0%, feed ethanol; used cooking oil and animal fats carry about 5.0%, mostly into renewable diesel and SAF, manure and organic waste about 6.0% into biogas, and wood pellets and forestry wood about 7.0% into pellets and power, all Douglas Insights estimates. Grain’s share rises as Indian distilleries take more rice and maize.

By end use, power generation buys about 45.0% of value, road transport 41.0%, industrial heat 8.0%, aviation 2.0% and residential heating 4.0%, all Douglas Insights estimates. Aviation’s share rises to about 7% by 2035 as Singapore, South Korea, Japan and India start SAF quotas, and road transport stays near 41% as higher blends offset electric vehicle growth.

What drives Asia Pacific bioenergy growth: biodiesel mandates, ethanol blending, aviation fuel quotas or biomass power?

Bioenergy volume sold in the region rises 4.60% a year in our base case, from about 2,780 PJ in 2025 to 4,358 PJ in 2035. Four drivers add 5.70 gross points; restraints remove 1.10.

Higher biodiesel blend mandates: 1.60 points

Biodiesel mandates are the largest driver, worth 1.60 points. ESDM targeted the 50% blend (B50) to start on 1 July 2026, with a 2026 biodiesel allocation of about 17.60 million kilolitres and projected foreign exchange savings of Rp157.28 trillion, its release of 18 June 2026 states. By 7 September 2026 cumulative 2026 distribution had reached 10.69 million kilolitres, including about 3.4 million kilolitres of B50 since July, and 94% of filling stations were selling it, the ministry’s renewable energy director general told parliament, KabarBursa reported on 8 September 2026. At about 33 GJ a kilolitre, the 3.4 million kilolitre rise from 2025 to the 2026 allocation adds about 112 PJ, a Douglas Insights estimate.

Ethanol blending and compressed biogas: 1.50 points

Ethanol and biogas programmes add 1.50 points. Petrol carried an average 19.24% ethanol in the 2024-25 ethanol supply year, and more than 130 CBG plants had been commissioned under the Sustainable Alternative Towards Affordable Transportation (SATAT) scheme by 1 November 2025, the Ministry of Petroleum and Natural Gas year-end review of 26 December 2025 states. The International Energy Agency (IEA) expects Indian biofuel demand to rise about 80% by 2030 and Indonesian demand about 50%, its Renewables 2025 report of October 2025 shows. Douglas Insights estimates Indian ethanol use of about 10 billion litres in 2025, rising to about 15 billion litres by 2035.

Aviation fuel quotas: 1.10 points

Aviation quotas add 1.10 points. India set SAF blending targets for international flights of 1% in 2027, 2% in 2028 and 5% in 2030, and brought SAF-blended jet fuel under the Aviation Turbine Fuel Control Order on 17 April 2026, its release of 23 April 2026 states. South Korea will require a 1% blend on all international flights from 2027, rising to 3% to 5% by 2030, Argus reported on 19 September 2025, and Japan targets 10% of domestic airlines’ fuel by 2030, about 1.7 million kilolitres, Argus reported on 30 June 2025. China’s Civil Aviation Administration had certified 1.375 million tonnes a year of SAF capacity by 22 December 2025, S&P Global reported.

Biomass power and biomethane: 1.50 points

Biomass power and biomethane add the last 1.50 points. Indonesia’s installed bioenergy power capacity reached 3,148 MW in December 2025, ESDM’s 2025 review of 9 January 2026 shows, and the IEA expects Chinese biogas and biomethane output to grow about 23% from 2025 to 2030, its Renewables 2025 biogases chapter shows. Summed, 1.60 + 1.50 + 1.10 + 1.50 = 5.70 points, a Douglas Insights estimate; after 1.10 points of restraints the 4.60% volume leg multiplied by the 1.54% price leg gives the 6.21% revenue rate.

What holds back the Asia Pacific bioenergy market: feedstock costs, delayed mandates or trade barriers?

Three restraints remove 1.10 points a year from volume growth: feedstock competition takes 0.50 points, delayed or suspended mandates 0.30 points, and export trade barriers 0.30 points.

Feedstock competition is the sharpest drag because food, oleochemical and fuel buyers draw on the same oils, sugar and grain. Rice from the Food Corporation of India (FCI) supplied 24.64% of ethanol for the 2025-26 supply year, up from 0.02% in 2023-24, while maize fell from 42.6% to 35.96%, the government said in a release of 31 July 2026 answering claims of losses on rice sold to distilleries. Each 10% rise in palm oil prices widens the gap Indonesia’s levy fund must cover, which is why Douglas Insights holds B50 volumes slightly below the 17.60 million kilolitre allocation.

Delayed mandates take 0.30 points. The Philippines suspended its planned 4% and 5% coconut biodiesel blends, due on 1 October 2025 and 1 October 2026, keeping B3 after coconut oil rose above USD 3,000 a tonne, the Manila Bulletin reported on 1 September 2025. Singapore moved its SAF levy to tickets sold from 1 October 2026 for flights departing from 1 January 2027 because of high fuel prices, the Civil Aviation Authority of Singapore (CAAS) said on 3 September 2026. Trade barriers take the final 0.30 points: the European Commission imposed definitive anti-dumping duties of 10.0% to 35.6% on Chinese biodiesel, excluding SAF, on 11 February 2025, cutting an export outlet for Chinese waste-oil fuel.

Which Asia Pacific country buys the most bioenergy, and where does value grow fastest: China, Indonesia or India?

China buys the most Asia Pacific bioenergy value, about USD 22.94 billion or 33.0% of 2025 sales. India grows fastest, at 8.6% a year to USD 24.82 billion by 2035, on ethanol, compressed biogas and its new SAF quota.

China leads because its 47.43 GW of biomass power, by the association’s count, generates about 213 TWh a year, worth about USD 19.2 billion at USD 0.09 a kWh, a Douglas Insights estimate. Its value grows 5.4% a year to USD 39.11 billion as biomethane and SAF add to a slowing power base. Indonesia, USD 13.21 billion, is second on biodiesel alone, about 14.2 million kilolitres at roughly USD 0.90 a litre, and grows 6.6% under B50. Japan, USD 8.34 billion, grows 3.6% as power purchase contracts for biomass plants mature and SAF starts.

India, USD 11.12 billion, grows fastest at 8.6% from ethanol, bagasse power and CBG. Thailand and Malaysia, USD 4.87 billion, grow 5.6%; Thailand has 28 ethanol plants with 6.92 million litres a day of capacity against road demand of about 3.43 million litres a day, The Nation reported on 21 October 2025. South Korea, USD 2.78 billion, grows 5.2% on pellets and its 2027 SAF quota, and the rest of the region, led by Australia, the Philippines and Vietnam, grows 6.4%. Country values sum to USD 73.83 billion in 2026, matching the headline, and USD 125.77 billion in 2035, 0.96% below it.

Which companies lead the Asia Pacific bioenergy market, and how concentrated is it?

Wilmar International leads the Asia Pacific bioenergy market with about 4.2% of 2025 value, a Douglas Insights estimate, ahead of Musim Mas at 2.6% and China Everbright Environment at 2.4%. The top six hold about 11.9%.

Neste sold 4,134 thousand tonnes of renewable products in 2025, up from 3,729 thousand, at a comparable sales margin of USD 411 a tonne, its financial statements release of 5 February 2026 shows; most of its Singapore output is shipped to Europe and North America, so we count only about USD 0.49 billion as sold in the region. EcoCeres opened Malaysia’s first SAF plant at Pasir Gudang in Johor, lifting its worldwide renewable fuel capacity to 770,000 tonnes a year, Aviation Week reported on 26 January 2026.

Equipment suppliers sit one step upstream and are not counted as sellers. Praj Industries reported income from operations of INR 8.42 billion in the quarter to 30 September 2025 and cited “challenges… particularly in the domestic ethanol segment”, its results of 5 November 2025 state. Indian Oil’s Panipat refinery received India’s first ISCC CORSIA certification for SAF, its release of 13 August 2025 states. Thousands of sugar mills, distilleries, palm refiners and biomass plants share most of the remaining 88.1%.

What does bioenergy cost per gigajoule in the region, and how fast does the price rise?

Bioenergy sold in the region averages USD 25.01 per GJ in 2025, Douglas Insights estimates, 4.8% below the USD 26.26 world average, from about USD 11.20 for pellets to USD 43.80 for renewable diesel and SAF.

The regional average sits below the world figure because low-priced biomass power and palm biodiesel weigh more here than costly hydrotreated fuels. Bioelectricity averages about USD 27.20 per GJ, about USD 0.098 a kWh; biodiesel about USD 24.40; fuel ethanol about USD 34.80; and biogas about USD 14.90, all Douglas Insights estimates. The price leg takes the average to about USD 25.40 in 2026 and USD 29.14 in 2035.

Two forces set the 1.54% price leg. Administered prices rise: India’s oil marketing companies pay INR 71.86 a litre for maize ethanol, INR 65.61 for cane juice ethanol and INR 57.97 for C-heavy molasses ethanol in 2025-26, the 31 July 2026 release shows, and a rising share of SAF lifts the mix. Against that, palm-linked prices swing: Indonesia set its biodiesel market index price at Rp14,312 a litre plus freight for November 2026, down from Rp15,072 in October, detikFinance reported on 3 November 2026. Cheaper solar-competing power contracts pull about 0.6 points back, a Douglas Insights estimate.

Which rules govern bioenergy in the region, from blend mandates to aviation levies and production credits?

Three layers govern Asia Pacific bioenergy: road fuel blend mandates such as Indonesia’s B50, aviation quotas and levies such as Singapore’s levy from 1 January 2027, and production incentives such as Australia’s AUD 1.1 billion programme.

The road layer is the oldest and largest. Indonesia sets both the blend and the market index price by ministerial decree, India sets ethanol procurement prices for each supply year, and Thailand plans to make 20% ethanol petrol (E20) and 7% biodiesel (B7) its main grades, phasing out lower blends by 2027, The Nation reported in October 2025. These rules fix volumes years ahead, which is why Douglas Insights treats mandated road volumes as the most certain part of the forecast.

The aviation layer is new. Singapore’s levy will be S$1.00 per economy ticket to Southeast Asia, S$2.80 to Northeast Asia, South Asia and Australia, and S$10.40 to the Americas, funding a 1% SAF target rising to 3% to 5% by 2030, CAAS said on 10 November 2025; amounts were kept when the start date was moved. The incentive layer is growing in Australia, where the Australian Renewable Energy Agency (ARENA) will deliver the AUD 1.1 billion Cleaner Fuels Program as production-linked incentives over 10 years, ACAPMAG reported on 13 May 2026. Douglas Insights treats the timing of these aviation quotas as the main policy swing in the faster case.

What if mandates slip or aviation quotas tighten: how large is the Asia Pacific bioenergy market in 2035?

The Asia Pacific bioenergy market ends 2035 between USD 101.17 billion and USD 154.70 billion across three cases, around a USD 126.98 billion base. Biodiesel blend levels and feedstock prices set most of the spread.

In the slower case Indonesia falls back from B50 when palm prices spike, India’s ethanol blend stalls near 20% and aviation quotas slip by two years, taking 1.60 points off the volume leg and 0.74 points off price. In the faster case Indonesia moves beyond B50, India lifts blending past 20% and Japan meets its 10% SAF target, adding 1.50 points to volume and 0.56 points to price. One extra point of yearly revenue growth adds about USD 12.48 billion to 2035 value, and one point less removes about USD 11.46 billion, Douglas Insights estimates.

Official signals bracket the base case. Indonesia’s biodiesel use rose to 14.2 million kilolitres in 2025 and its 2026 allocation is 17.60 million, while the Philippines and Singapore delayed steps, the sources above show. Our 6.21% rate sits between mandates delivered on time and mandates deferred.

Douglas Exclusive: the Mandate Litre Ledger

The Mandate Litre Ledger is a Douglas Insights model built from 10 inputs: 7 government or official documents and 3 trade press reports of official statements. It tracks how many new petajoules each blend mandate locks in, and when.

The finding, a Douglas Insights estimate: about 1,050 of the 1,578 new petajoules sold in the region from 2025 to 2035, or 66.5%, are locked in by a blend mandate or quota already in law or decree, mostly Indonesian biodiesel and Indian ethanol. Aviation quotas lock in only about 130 PJ by 2030, but they carry the highest price per GJ, so they add about 1.5 times their volume share to value.

The ledger changes how to read 2027. If Indonesia holds B50 through a palm price spike, Douglas Insights expects regional value to grow about 7% in 2027; if it falls back to B40, growth drops near 5%, and biomass power and ethanol producers have to carry the gain while SAF plants in Malaysia and Singapore keep exporting.

How does the methodology turn 2,780 petajoules into USD 69.52 billion?

Our methodology multiplies about 2,780 PJ of bioenergy sold in Asia Pacific by an average USD 25.01 per GJ to reach USD 69.52 billion in 2025, then grows volume 4.60% and price 1.54% a year.

The model covers 6 products, 7 feedstock groups, 5 end uses and 7 countries or sub-regions, using 66 data points, 24 sourced and 42 modelled. Volumes come from government blend data, installed power capacity and company sales; prices come from administered prices, index prices and power tariffs, all Douglas Insights estimates. Arithmetic: 2,779.6 PJ x USD 25.01 = USD 69.52 billion; USD 69.52 billion x (1.0460 x 1.0154)^10 = USD 126.99 billion, within 0.01% of the USD 126.98 billion headline. Volume reaches about 2,907 PJ in 2026 and 4,358 PJ in 2035.

Two cross-checks agree. First, USD 69.52 billion is the Asia Pacific row of our worldwide model, 27.2% of its USD 255.48 billion total, and our 6.21% rate equals that row’s rate. Second, Indonesia’s 14.2 million kilolitres of biodiesel at about USD 0.90 a litre give USD 12.78 billion, 96.7% of the Indonesia row, with power and pellets making up the rest. AI tools help draft the text and automated checks test the arithmetic and links; the Douglas Insights research desk chooses the sources, builds the model and approves publication, as our editorial standards explain.

Sources

1. Ministry of Energy and Mineral Resources, Indonesia B40 mandate cuts diesel imports (2026)
2. Ministry of Energy and Mineral Resources, Indonesia B50 to start on 1 July (2026)
3. Press Information Bureau, India Year End Review 2025: Ministry of Petroleum and Natural Gas (2025)
4. Press Information Bureau, India Ethanol feedstock and procurement prices (2026)
5. Press Information Bureau, India SAF blending targets and ATF Control Order amendment (2026)
6. Civil Aviation Authority of Singapore SAF levy for flights departing from 1 January 2027 (2026)
7. International Energy Agency Renewables 2025: renewable transport (2025)
8. Neste Financial statements release 2025 (2026)
9. Science and Technology Daily China biomass power capacity 2025 (2026)
10. European Commission, DG Trade Commission protects EU biodiesel industry from dumped Chinese imports (2025)

What counts in the Asia Pacific bioenergy study, and what is excluded?

The study counts modern bioenergy sold commercially in Asia Pacific, valued at the producer’s selling price: liquid biofuels, biomass power, biogas and biomethane and traded wood pellets. Traditional firewood and charcoal used at home and uncommercial on-farm biogas are excluded.

The study splits value by 6 products, 7 feedstock groups, 5 end uses and 7 countries or sub-regions: China, Indonesia, India, Japan, Thailand and Malaysia, South Korea and the rest of Asia Pacific. As in the worldwide model, pellets sold to power plants are counted as a traded fuel and the electricity made from them as a sold product. Worldwide figures appear in our Bioenergy Market report, and algae-based fuels in our Algae Biofuel Market study.