While wind and solar decarbonize the power grid, a critical challenge remains: the 80% of global energy consumed not as electrons, but as molecules—the liquid fuels and feedstocks powering planes, ships, and heavy industry. For these “hard-to-abate” sectors, electrification can be impractical. The solution is renewable molecules, and biomass is the only scalable, commercially-ready source.
The biomass energy economy is best understood as a tale of two distinct trajectories. On one side lies the established biomass power sector—burning solid biomass like wood pellets to generate electricity—characterized by mature technologies and modest growth. On the other are the dynamic, high-growth segments of advanced biofuels (SAF/RD) and Renewable Natural Gas (RNG). These segments use advanced chemistry to convert waste (cooking oils, animal fats, etc.) into high-value, drop-in replacements for fossil fuels.
For investors, the most compelling opportunities are concentrated in the latter. To give a sense of the opportunity scale: The global aviation industry consumes approximately 100 billion gallons of jet fuel annually. Sustainable aviation fuel (SAF), an emerging biofuel, supplies less than 0.5% of that total market. Meeting the industry’s 2030 target of 10% SAF usage would require a 20x increase in production from today’s levels.
This mismatch—a huge target relative to a tiny base—underpins the biomass energy investment thesis. In this report, we explore the top biomass energy stocks positioned to capture that mismatch.
Why Biomass Energy, Why Now?
First is the decarbonization of commercial aviation and other hard-to-abate sectors. Global airlines are bound by net-zero by 2050 commitments and binding mandates, like the EU’s ReFuelEU law requiring SAF to comprise 70% of jet fuel by 2050. Aviation has no other viable decarbonization path for long-haul flights, creating uniquely inelastic, high-margin demand. Similarly, heavy-duty trucking and marine shipping are turning toward biofuels and RNG as drop-in, low-carbon solutions.
Second, a revolution in feedstock sidesteps the “food vs. fuel” debate. Modern biorefineries no longer rely on food crops. Instead, the dominant technology, Hydroprocessed Esters and Fatty Acids (HEFA), excels at converting low-cost, waste-based inputs—used cooking oil, inedible animal fats, and agricultural residues—into renewable diesel and SAF. Policy further amplifies this shift. The U.S. Inflation Reduction Act’s 45Z credit, for instance, pays producers based on a single metric: carbon intensity reduction. This creates a direct economic incentive to process society’s waste streams.
How to Invest in Biomass Energy
The business of advanced biofuels is fundamentally an arbitrage on waste streams. Profitability is driven by three levers: 1) the market price of the finished fuel, often linked to crude oil; 2) the fluctuating value of government incentives, like California’s LCFS credits or federal RINs; and 3) the competitive cost of securing waste feedstocks.
Three distinct business models have emerged to manage these variables:
- Biofuel & SAF Producers: Industrial-scale operations focused on maximizing refinery uptime and securing vast, low-cost feedstock supply chains to protect margins from commodity swings.
- Biofuel Infrastructure: This model avoids refining risk by owning “last mile” distribution, focusing instead on building fueling stations and long-term contracts with vehicle fleets.
- Emerging Biorefiners & RNG: This group carries the highest risk and reward, where success hinges on scaling new technology and proving commercial viability.
The following analysis explores the top stocks within each of these strategic frameworks.
Biofuel & SAF Producers
This segment is the industrial core of renewable fuels: large-scale producers converting waste biomass into renewable diesel and SAF to displace petroleum. Success for these biomass energy stocks depends on securing cheap feedstock, running efficient refineries, and navigating complex government credits. They are capital-intensive businesses directly exposed to the risks and rewards of decarbonizing heavy transport, making them a direct play on the industry’s growth.
Neste (XHEL: NESTE, OTC: NTOIY)
HQ: Finland; Blue-chip scale leader in waste-based renewable fuels.
Neste is the world’s largest producer of renewable diesel (RD) and sustainable aviation fuel (SAF). Using its proprietary NEXBTL refining technology, the Finnish company converts diverse waste inputs into premium drop-in fuels. In 2025, over 95% of its feedstock is waste like used cooking oil and animal fats, a key advantage that insulates it from virgin oil volatility and the “food vs. fuel” debate. This waste focus gives its products a very low carbon intensity, maximizing their value in credit markets.
Neste’s value stems from its ability to use its scale and technology to meet massive, policy-driven SAF demand. Global aviation is bound by blending mandates like the EU’s ReFuelEU law, creating inelastic demand with few alternatives. While facing margin compression in early 2025, Neste is responding by optimizing its supply chain and expanding its Singapore and Rotterdam refineries. This boosted SAF capacity allows it to capture lucrative airline offtake agreements, making Neste the blue-chip investment in the secular growth of renewable fuels.
Darling Ingredients (NYSE: DAR)
HQ: USA; Vertically integrated arbitrage on waste-to-fuel value chain.
Darling Ingredients is a global leader in collecting and repurposing organic waste. It processes animal by-products and used cooking oil into fats, proteins, and meals. This backbone supplies its primary growth engine: a 50/50 joint venture with Valero called Diamond Green Diesel (DGD), one of the world’s largest renewable diesel producers. DGD converts the low-cost waste Darling collects into high-value fuel. This vertical integration, from waste collection to fuel production, is Darling’s defining strategic advantage.
Darling’s model is an incentivized arbitrage on waste. While other refiners compete for feedstock, Darling controls its own supply, granting a structural margin advantage. This was tested in mid-2025 when slumping regulatory credit prices (RINs) squeezed DGD’s profitability, but the long-term case remains intact. As demand for low-carbon feedstocks grows, Darling’s vast network becomes an increasingly valuable asset. The company offers investors a unique two-part exposure: a stable recycling business coupled with the high-growth upside of a world-class biofuel platform.
Calumet (NASDAQ: CLMT)
HQ: USA; De-risked, first-mover in North American SAF production.
Calumet, a legacy petroleum refiner, is successfully transforming into a pure-play renewable fuels producer. Its core asset is now Montana Renewables (MRL), created by converting its conventional refinery in Great Falls. By retooling existing infrastructure—a capital-efficient “brownfield” approach—Calumet leapfrogged competitors to become an early leader in the North American SAF market. This pivot was significantly de-risked in early 2025 when MRL secured a landmark $1.44 billion loan guarantee from the U.S. Department of Energy for a massive expansion.
Calumet’s edge is its first-mover advantage in SAF, backed by government financing. The DOE loan directly funds the “MaxSAF” project, expanding MRL’s capacity to 300 million gallons per year by 2028, focused on high-margin SAF. Its strategic location allows processing of flexible feedstocks like inedible tallow and canola oil from the Northern Plains. By using existing assets to minimize costs and securing favorable financing, Calumet has engineered a clean break from its volatile past and is on a trajectory to become a significant SAF supplier.
Biofuel Infrastructure
Where producers are the manufacturers, this niche is the distribution network. The sole company covered here owns the “last mile” fueling stations that deliver RNG to trucking fleets. This creates a stable, toll-road business model insulated from commodity volatility. Among biomass energy stocks, this company offers a picks-and-shovels play on the rate of biofuel adoption by heavy-duty transport.
Clean Energy Fuels (NASDAQ: CLNE)
HQ: USA; Picks-and-shovels infrastructure play on RNG for trucking.
Clean Energy Fuels is North America’s largest provider of renewable natural gas (RNG) as a transportation fuel. Its model focuses not on production, but on owning and operating the critical “last mile” of distribution infrastructure. It runs a network of over 600 fueling stations serving heavy-duty fleets in trucking, refuse, and transit. CLNE sources RNG—biomethane from landfills and dairy farms—and delivers it to customers seeking a simple, affordable, drop-in diesel replacement.
Clean Energy is a picks-and-shovels play on transport decarbonization. As pressure to cut emissions mounts, RNG offers a practical path for heavy-duty fleets. CLNE’s extensive network creates a competitive moat, functioning as a toll road for the transition. The company is accelerating this shift through partnerships, like its 2025 joint venture with Pioneer Clean Fleet Solutions, which leases RNG trucks to fleets, creating captive demand. With policy tailwinds from the 45Z tax credit, Clean Energy is poised for growth by providing this essential infrastructure.
Emerging Biorefiners & RNG
This diverse group is the bioeconomy’s next frontier, featuring pure-play RNG producers, ethanol refiners adding carbon capture, and ventures commercializing new SAF technologies. These biomass energy stocks offer investors high growth potential through cutting-edge tech. That upside, however, comes with significant execution risk, dependence on nascent markets, and acute sensitivity to volatile environmental credit prices, demanding a higher risk tolerance.
Montauk Renewables (NASDAQ: MNTK)
HQ: USA; Pure-play owner of RNG assets with credit price exposure.
Montauk Renewables is a pure-play RNG company that develops, owns, and operates biogas projects across the U.S. Its core business is capturing biogas from landfills and agricultural waste and upgrading it into two products: pipeline-quality RNG and renewable electricity, sold as Renewable Energy Credits (RECs). By owning the assets, Montauk captures the full value chain, from biogas collection to monetizing the final energy and its environmental attributes.
Montauk offers direct asset-level exposure to RNG production and its corresponding environmental credits, primarily federal Renewable Identification Numbers (RINs). This makes the company highly sensitive to credit prices, as seen in mid-2025 when falling RIN values compressed profitability despite steady production. For investors bullish on the long-term value of these attributes, this volatility creates opportunity. Montauk is steadily growing its asset base with projects like its new Apex, Ohio, facility, offering a direct bet on converting waste methane into a valuable commodity.
Green Plains Inc. (NASDAQ: GPRE)
HQ: USA; Technology turnaround unlocking value with carbon capture.
Green Plains is transforming from a conventional corn ethanol producer into a technology-focused biorefiner, pivoting to escape the industry’s historically low margins. The strategy’s cornerstone is large-scale carbon capture and sequestration (CCS) across its Nebraska facilities, starting in late 2025 through a partnership with Summit Carbon Solutions. This technology will dramatically lower the carbon intensity (CI) score of its ethanol.
This technological upgrade is key to unlocking value from existing assets. A lower CI score makes Green Plains’ ethanol eligible for lucrative 45Z production tax credits and qualifies it as a premium SAF feedstock, repositioning the company higher up the value chain. Concurrently, Green Plains now produces high-value co-products like Ultra-High Protein animal feed and renewable corn oil. This diversifies revenue and makes Green Plains a bet on turning a legacy commodity into a portfolio of high-demand, low-carbon products.
Aemetis (NASDAQ: AMTX)
HQ: USA; California-focused developer stacking high-value carbon credits.
Aemetis is a renewable fuels company with a growth strategy centered on the highly incentivized California market. It operates several complementary businesses, including an advanced ethanol plant, a biodiesel facility, and its primary growth driver: a network of dairy-based renewable natural gas (RNG) projects. Aemetis’s strategy is to build a portfolio of low-carbon-intensity assets that can “stack” value from California’s Low Carbon Fuel Standard (LCFS) on top of federal incentives like the 45Z tax credit.
Aemetis’s success depends on executing this high-growth, policy-driven project pipeline. The company is rapidly expanding its network of dairy digesters in California’s Central Valley, targeting an annual production rate of 1 million MMBtus by 2026. This business converts agricultural methane into negative-carbon-intensity RNG, which commands premium LCFS pricing. In parallel, Aemetis is developing a large SAF and renewable diesel plant in Riverbank, CA, that will use waste wood feedstock and integrate carbon capture. While early-stage and capital-intensive, Aemetis offers concentrated exposure to the California market.
Gevo (NASDAQ: GEVO)
HQ: USA; Venture-stage bet on unique, airline-contracted SAF technology.
Gevo is a renewable chemicals and biofuels company built on a unique technology. Unlike producers using fats and oils, Gevo’s process converts renewable carbohydrates—primarily low-carbon corn—into energy-dense liquids. Its core innovation creates isobutanol, which is then converted into premium drop-in fuels like sustainable aviation fuel (SAF) via its Alcohol-to-Jet (ATJ) technology. The integrated model also yields high-value co-products, including protein-rich animal feed and corn oil, creating a circular system that enhances profitability.
Gevo is a venture-style bet on a differentiated SAF technology, de-risked by a large backlog of binding offtake agreements with customers like American Airlines, Delta, and Oneworld Alliance. The key catalyst is financing and building its first commercial-scale facility, Net-Zero 1. In 2025, Gevo pivoted to prioritize a smaller, faster North Dakota project to leverage on-site carbon capture, which is critical for maximizing policy credits. The company’s value rests not on current cash flow but on scaling its patented ATJ process, backed by a conditional DOE loan and billions in contracted revenue.