Top renewable fuels trends to watch out in 2025

The renewable fuels landscape is shifting fast, and 2025 is set to be a year of breakthroughs, challenges, and bold investments. As industries push harder to reduce emissions, new technologies and policies are transforming what’s possible.

Sustainable Aviation Fuel (SAF) is moving beyond pilot programs, with airlines locking in multi-year supply agreements. Bio-based diesel alternatives are expanding as feedstock innovation helps sidestep resource constraints. Hydrogen, long seen as a wildcard, is seeing real traction — but can production scale match the hype?

Regulatory pressure is also intensifying. The EU’s Renewable Energy Directive III is setting aggressive targets, and the U.S. Inflation Reduction Act is pumping billions into clean fuel incentives. But funding alone isn’t enough. Supply chain bottlenecks, land-use debates, and certification challenges are forcing companies to rethink their strategies.

Which technologies will gain momentum? How will policy shifts influence market demand? And where should companies place their bets?

In this blog post, we are outlining the trends driving renewable fuels in 2025 and accelerating the global transition to clean energy, with insights on emerging feedstocks, advanced software technologies, and the shifting regulatory landscape.

 

Renewable natural gas trends in 2025

The Renewable Natural Gas sector is seeing rapid growth due to its role in decarbonizing energy systems. Innovations and policy shifts will continue to shape the trajectory of RNG throughout 2025.

Impact of the USEPA’s Renewable Fuel Standard (RFS) program on RNG

The Renewable Fuel Standard (RFS) program, managed by the U.S. Environmental Protection Agency (USEPA), incentivizes the production of RNG by requiring a certain volume of renewable fuels. Renewable Identification Numbers (RINs) act as tradable credits, influencing RNG market prices. Fluctuations in RIN values create market uncertainty, but the program’s waiver authority allows for flexibility in compliance. 

RNG’s role in various markets

Renewable natural gas is being increasingly used in multiple sectors such as transportation, electricity generation, and industrial applications. It can be integrated into existing natural gas infrastructure, making it a versatile and scalable option for reducing greenhouse gas emissions across different industries.

Navigating section 45Z tax credit

Section 45Z offers a tax credit to RNG producers, which provides financial incentives for creating RNG from biogas. This incentive is crucial in helping new projects become viable and support the expansion of RNG production, especially in areas where infrastructure is lacking.

Market expectations for RNG

The RNG market is expected to grow significantly in 2025, driven by both policy support and innovation. Emerging technologies will improve the cost-effectiveness of RNG production, while policy stability and the expansion of renewable fuel standards will enhance market dynamics.

LCA software for RNG

LCA software for renewable natural gas helps evaluate the environmental impacts of RNG production, from feedstock to final use. It provides transparency, allowing companies to assess carbon footprints and improve sustainability. By analyzing energy consumption, emissions, and waste management practices, this software offers actionable insights to reduce impacts and enhance production efficiency. With increasing interest in RNG, LCA software is essential for sustainable decision-making.

 

Ethanol trends in 2025

Ethanol production and consumption are evolving rapidly in response to global sustainability pressures. As new technologies, policies, and market shifts take hold, 2025 will see some remarkable changes in the ethanol landscape.

Increased ethanol blending in fuels

In Brazil, tests are underway to boost ethanol blending in gasoline to 30% (E30), a significant leap from the current 27%. These tests have shown promising results in maintaining engine performance while enhancing environmental benefits. As a result, other countries may follow suit, aiming to reduce carbon emissions and fuel costs.

Expansion of second-generation bioethanol

Second-generation bioethanol, made from non-food biomass, is gaining momentum. This shift reduces the risk of food crop competition, tapping into agricultural waste and other byproducts. The adoption of this technology could significantly lower the environmental footprint of ethanol production, making it a more sustainable alternative.

Integration of advanced technologies

The Ethanol industry is embracing artificial intelligence and automation to streamline production processes, altogether with the adoption of Life Cycle Assessment. By applying machine learning and AI, producers can optimize efficiency, minimize waste, and cut costs. These technologies will make ethanol production more cost-effective and help meet growing demand in an environmentally-conscious market.

Policy initiatives to boost ethanol production

Governments worldwide are introducing policies to stimulate local ethanol production. India’s recent decision to allow ethanol production from cane juice is one such example. Such moves not only secure energy supply but also encourage innovation in biofuel production. These policies could shape the future of sustainable fuel use in emerging economies.

LCA software for Ethanol

LCA software for ethanol production helps trace the lifecycle impacts from agricultural practices to fuel combustion. It quantifies greenhouse gas emissions, water use, and land impacts. This tool aids producers in optimizing practices, reducing carbon footprints, and meeting sustainability goals. As demand for biofuels grows, LCA software ensures ethanol remains a competitive and environmentally responsible energy source, empowering companies to make data-driven improvements to their processes.

 

Biodiesel trends in 2025

Biodiesel continues to play a key role in the biofuel market. With new policies and innovations on the horizon, this fuel is poised for significant growth in 2025.

Biodiesel production outlook

Biodiesel production is expected to increase in 2025, driven by favorable government policies and growing demand for renewable fuels. The new administration’s focus on clean energy will likely lead to stronger incentives for biofuel production, aligning with global decarbonization goals.

Impact of RFS volume shifts

Shifts in the Renewable Fuel Standard (RFS) volumes will have significant effects on biofuel production. Increased mandates will create opportunities for growth, but also present challenges in meeting these volumes. Biofuel producers will need to innovate to stay competitive.

Trade considerations and strategic carbon initiatives

Trade policies are influencing the biofuel export market, and carbon reduction strategies are shaping ethanol and biodiesel production. As global demand for low-carbon fuels grows, U.S. producers are exploring new markets while aligning with sustainability initiatives.

LCA software for biodiesel

LCA software for biodiesel evaluates environmental impacts from feedstock cultivation to biodiesel combustion. It provides insights into land use, water consumption, and carbon emissions. This software helps producers refine their methods, minimize resource use, and ensure sustainable production. As the biodiesel market continues to expand, LCA software supports the industry’s commitment to sustainability by offering detailed, data-driven analyses that inform better operational and regulatory decisions.

 

Hydrogen trends in 2025

Hydrogen is emerging as a critical component of the clean energy transition. Investment and policy incentives are accelerating its growth, positioning hydrogen as a key solution for decarbonizing various industries.

Investment growth in clean hydrogen

Both private and public sector investments in clean hydrogen are surging. Hydrogen is gaining traction as a key technology for decarbonizing heavy industries, transportation, and power sectors. Its ability to store and transport energy efficiently is central to its growth.

Impact of section 45V tax credit

The Section 45V tax credit provides a financial incentive for hydrogen production, especially in clean hydrogen. This tax credit is expected to stimulate significant investment in hydrogen infrastructure and production, accelerating the sector’s growth in 2025 and beyond.

Transparency and emerging technologies

The push for transparency in hydrogen production is crucial to ensuring its sustainability. Emerging technologies are making hydrogen more affordable and efficient, paving the way for wider adoption in industries such as steel manufacturing and transportation.

LCA software for hydrogen

LCA software for hydrogen production helps assess the full environmental impact of various hydrogen production methods, such as green, blue, and grey hydrogen. It evaluates emissions, resource use, and energy efficiency, offering transparency across the lifecycle. As hydrogen plays an increasingly important role in decarbonizing industries, LCA software helps stakeholders understand environmental trade-offs and improve the sustainability of hydrogen production and distribution networks moving forward.

 

Renewable diesel trends in 2025

Renewable diesel is becoming increasingly important, especially in regions like California, where state-level policies are driving adoption. As companies prioritize sustainability, RD is poised to grow in 2025.

Growth of renewable diesel in California

California’s renewable diesel market is expanding rapidly, thanks to strong state-level policies like the Low Carbon Fuel Standard (LCFS). These regulations are pushing the state toward cleaner fuels, boosting RD adoption in both transportation and industrial sectors.

Policy changes and new state programs

New state programs aimed at reducing carbon emissions will have a direct impact on renewable diesel production. These policies, which include credits for RD producers, will increase RD availability and drive down costs, making it more competitive with traditional diesel.

Corporate sustainability commitments driving renewable diesel demand

Corporate sustainability goals are accelerating demand for renewable diesel. Companies looking to reduce their carbon footprints are increasingly turning to RD as part of their decarbonization strategies. This demand is expected to drive continued RD market growth.

LCA software for renewable diesel

LCA software for renewable diesel assesses the environmental impacts of feedstock sourcing, production, and final fuel usage. By examining carbon emissions, energy consumption, and other environmental factors, the software provides vital data to optimize production processes. As renewable diesel demand grows, LCA software will be increasingly important in improving sustainability practices and demonstrating compliance with evolving regulations, helping companies stay ahead in a competitive market.

 

Sustainable Aviation Fuel trends in 2025

Sustainable Aviation Fuel (SAF) is gaining momentum, driven by both regulatory incentives and growing demand from the aviation industry.

Policy changes and new state programs

New regulations supporting SAF production and blending are emerging in key aviation markets. These policies are encouraging investment in SAF technology and production, helping to meet the sector’s sustainability targets.

SAF demand’s influence on renewable diesel Production

Increasing SAF demand is creating ripple effects in the renewable diesel market. As more resources are allocated to SAF production, renewable diesel production may experience changes to meet the evolving fuel needs of the transportation sector.

Corporate sustainability commitments driving SAF demand

Airlines and corporate stakeholders are pushing SAF demand to meet ambitious sustainability targets. Corporate sustainability commitments are accelerating the adoption of SAF as a cleaner alternative to traditional jet fuels, further driving its market growth.

LCA software for Sustainable Aviation Fuel

LCA software for Sustainable Aviation Fuel (SAF) quantifies environmental impacts across SAF’s lifecycle, from feedstock sourcing to fuel combustion. This tool identifies key areas for improvement, such as emission reductions and resource optimization. As the aviation industry targets net-zero goals, LCA software is essential for evaluating different SAF production pathways and ensuring that fuels meet rigorous sustainability standards, enhancing transparency and supporting regulatory compliance in the sector.

 

Renewable fuels trends shaping the next era of clean energy

In 2025, renewable fuels like RNG, ethanol, biodiesel, hydrogen, renewable diesel, SAF, and carbon markets will continue to drive the clean energy transition. With increasing investment, evolving policies, and new technologies, these trends will shape the future of energy systems, accelerating the global push toward carbon neutrality.

The growing reliance on LCA software is a common trend across all renewable fuel innovations. As regulatory frameworks tighten and carbon accounting becomes more precise, companies must quantify their fuels’ environmental impact at every stage, and this advanced technology enables data-driven decision-making, helping businesses optimize sustainability strategies, meet compliance standards, and gain a competitive edge in low-carbon markets.

For industry stakeholders, understanding and adapting to these trends will be essential. Staying updated on policy changes and technological advancements will help you navigate the ever-evolving landscape and leverage opportunities for growth. The renewable fuel sector is poised for innovation, offering both challenges and vast potential for those ready to seize the future of sustainable energy.

Want deeper insights into the future of renewable fuels? Download the 10 trends shaping the Transportation Fuels industry in 2025 exclusive eBook and stay ahead with expert insights to guide your sustainability strategy.