Biofuel Market - Forecast(2024–2030)

 

Biofuel Market Overview

The Biofuel Market size is estimated to reach US$284.95 billion by 2030, after growing at a CAGR of 7% during the forecast period 2024–2030.

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 Biofuels are renewable energy fuel which is produced using various feedstocks such as starch crops, sugar crops, oilseed crops and other biomass. The biofuels such as ethanol, biodiesel and others have rising applications as transportation fuel, thereby acting as a driving factor in the biofuels industry. According to the International Organization of Motor Vehicle Manufacturers (OICA), global automotive production was 89.8 million in 2023. In addition, the growing trend for reducing GHG emissions and emphasis on biofuel production is boosting the growth scope in the biofuel market. The major disruption caused by the COVID-19 outbreak impacted the growth of the biofuel market due to disturbance in manufacturing, supply chain disruption, falling demand from major end-use industries and other lockdown restrictions. However, significant recovery is boosting the demand for biofuel for a wide range of applicability and utilization in the automotive transportation sector. The biofuel market is witnessing a surge in advanced biofuel innovation, marked by the development of next-generation biofuels derived from non-food feedstocks. Advanced biofuels, such as cellulosic ethanol and algae-based fuels, are gaining traction due to their higher energy efficiency, reduced greenhouse gas emissions, and potential to overcome challenges associated with traditional biofuels. A key trend shaping the biofuel market is the integration of circular economy principles. Companies are increasingly adopting circular approaches, utilizing waste and by-products from various industries as feedstocks for biofuel production. This not only addresses environmental concerns by reducing waste but also enhances the overall sustainability of biofuel production. A notable trend in the biofuel market is the increasing emphasis on the development and commercialization of advanced biofuel technologies. As the global focus on sustainable energy intensifies, advanced biofuels, derived from non-food sources such as algae, waste biomass, and cellulosic materials, are gaining prominence. These next-generation biofuels offer several advantages over traditional biofuels, including higher energy efficiency, reduced greenhouse gas emissions, and minimized competition with food crops for resources. Technological advancements, research investments, and supportive regulatory frameworks are propelling the scale-up and integration of advanced biofuels into mainstream energy markets. This trend not only addresses environmental concerns but also contributes to diversifying the feedstock base, enhancing energy security, and fostering a more sustainable and resilient biofuel industry in the global energy landscape. Thus, the Biofuel industry is anticipated to grow rapidly and contribute to the Biofuel market size during the forecast period.

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Biofuel Market Report Coverage

The “Biofuel Market Report — Forecast (2024–2030)” by IndustryARC, covers an in-depth analysis of the following segments in the Biofuel Industry.

By Product Type: Ethanol, Biodiesel, Biogas and Others.

By Feedstock: Sugarcane, Corn, Vegetable Oil, Castor Oil, Biomass and Others.

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By Form: Solid, Liquid and Gaseous.

By Application: Lubricants, Cleaning Oil, Engine Fuel, Solvents and Others.

By End-use Industry: Automotive [Passenger Vehicles (PVs), Light Commercial Vehicles (LCVs) and Heavy Commercial Vehicles (HCVs), Aerospace (Military, Commercial and Others)], Power Generation, Consumer Goods, Marine (Passenger, Cargo and Others) and Others.

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By Geography: North America (the USA, Canada and Mexico), Europe (the UK, Germany, France, Italy, the Netherlands, Spain, Belgium and the Rest of Europe), Asia-Pacific (China, Japan, India, South Korea, Australia and New Zealand, Indonesia, Taiwan, Malaysia and the Rest of APAC), South America (Brazil, Argentina, Colombia, Chile and the Rest of South America) and the Rest of the World [the Middle East (Saudi Arabia, the UAE, Israel and the Rest of the Middle East) and Africa (South Africa, Nigeria and the Rest of Africa)].

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Key Takeaways

• North America dominates the Biofuel market, owing to growth factors such as the flourished base for the automotive transportation sector and rising emphasis on renewable energy and Biofuel production, thereby boosting growth in this region.

• The flourishing automotive sector across the world is propelling the demand for Biofuel for major utilization in engine fuels, flexible-fuel vehicles and others, thereby influencing the growth in the Biofuel market size.

• The demand for liquid Biofuels such as ethanol, biodiesel and others is high over gaseous and solid types due to the high preference for automotive transportation fuel and energy efficiency, thereby fueling the growth scope in the Biofuel market.

• However, the high production costs associated with Biofuel and the threat to the environment act as challenging factors in the Biofuel industry.

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Biofuel Market Segment Analysis — by Form

The liquid segment held a significant share of the Biofuel Market in 2023 and is projected to grow at a CAGR of 7.0% during the forecast period 2024–2030. The demand for liquid biofuel types is high compared to solid and gaseous types due to high utilization in flexible-fuel vehicles and focus on energy security. The liquid biofuels are derived from renewable sources

uch as domestic wastes, commercial waste and others, thereby reducing the concern regarding resource scarcity. In addition, the growing applicability of liquid type as a transportation fuel in the automotive transportation sector is fueling the demand for biofuels. Thus, owing to the high demand for liquid biofuels such as ethanol, biodiesel and others, the liquid type segment is anticipated to grow rapidly in the Biofuel market during the forecast period.

Biofuel Market Segment Analysis — by End-use Industry

The automotive segment held a significant share of the Biofuel Market in 2021 and is projected to grow at a CAGR of 7.5% during the forecast period 2024–2030. Biofuels such as ethanol, biodiesel and others are increasingly utilized as a transportation fuel in the automotive sector. The lucrative growth scope for automotive is high due to growth factors such as rising demand for fuel-efficient vehicles, vehicle electrification and urbanization. According to the Federal Chamber of Automotive Industries, the new vehicle registration in Australia showed an increase of 1.2% with 101,233 units in March 2022 compared to March 2021. With the rapid growth scope and production trend in the automotive transportation sector, the demand for biofuel as transportation fuel or vehicle engine fuel is increasing. This, in turn, is projected to boost its growth scope in the automotive industry during the forecast period.

Biofuel Market Segment Analysis — by Geography

North America held the largest share of up to 39.5% in the Biofuel Market in 2023. The lucrative growth scope for biofuel in this region is influenced by the established base for biofuel utilization, the presence of large biofuel feedstock and supportive government policies for renewable energy. The lucrative growth of the automotive sector in North America is influenced by rising public transportation, demand for fuel-efficient vehicles and strict regulations for particulate emissions. According to Statistics Canada, around 26.3 million new vehicles were registered in Canada in 2023. According to the International Organization of Motor Vehicles Manufacturers (OICA), automotive production in the U.S. rose to 10.8 million units in 2023 compared to 10.47 million 2022. With the rising automotive production, the utilization of biofuels such as ethanol gas, biodiesel and others in vehicles is growing, which, in turn, is projected to boost its growth prospects in the North America region during the forecast period.

Biofuel Market Drivers

Bolstering Growth of the Aerospace Sector:

Biofuel has significant demand in the aerospace sector for applicability as aviation fuel and is used along with biomass waste, oil and waste fats. The aerospace industry is significantly flourishing, owing to factors such as demand for fuel-efficient and lightweight aircraft, a rise in air traffic and rising income levels. According to the International Air Transport Association (IATA), the revenue for commercial airlines in North America is estimated to grow by 1.9% in 2022 over the previous years. According to Forbes Virgin Atlantic Lands First Flight Powered By Biofuels. Two Rolls-Royce Trent 1000 engines on a Boeing 787 operated by Virgin Atlantic were powered by 70 tons of Sustainable Aviation Fuel (SAF), a biofuel made primarily from waste oils and animal fat, which the airline claims emits 70% less carbon than traditional jet fuel in 2023. With the robust scope for the aerospace sector, the utilization of biofuels such as ethanol, biodiesel and others prepared from sugar crops, oilseed crops, starch crops and others in aviation for aircraft engines is increasing. This, in turn, is driving the Biofuel industry.

Favorable Government Policies Supporting Biofuels:

The policies to curb carbon emissions and limited availability of the fossil-fuel are supporting favorable government policies on the rapid utilization of Biofuels. Various governments have regulations to promote the applicability of biofuels. The Energy Independence and Security Act (EISA) of 2007 implements biofuel blending mandates in the U.S. for transportation fuel. The target for a minimum volume of 36.0 billion gaseous gallon biofuels in the form of blending is set to be achieved by 2022. Due to such favorable regulations and policies, the demand for biofuels is increasing, thereby driving the Biofuel industry.

Biofuel Market Challenges

High Production Costs and Industrial Pollution Associated with Biofuel:

The costs of production of Biofuel are relatively high. In addition, the burden on agricultural feedstock such as sugarcane, corn, cassava and other biomass increases the burden on the biofuels market. Furthermore, the industrial pollution arising from the production of biofuels and small-scale water pollution from biofuel manufacturing plants are hampering the growth prospects for biofuels. The nitrogen oxide level released in the atmosphere is also high, which is leading to industrial pollution. Thus, due to such complexities, the biofuel market anticipates a slowdown.

Biofuel Industry Outlook

Technology launches, acquisitions and R&D activities are key strategies adopted by players in the Biofuel Market. The 10 companies in the Biofuel Market are:

1. Abengoa Bioenergy S.A.

2. Cargill

3. BTG International Ltd.

4. DuPont

5. Bunge Limited

6. Petrobras

7. Butamax

8. Alto Ingredients, Inc.

9. Archer Daniels Midland Company

10. Wilmar International

Recent Developments

In January 2022, Renewable Energy Group, Inc. (REG), a leading Biodiesel company, acquired Amber Resources, LLC and its affiliated entities. This acquisition aims to increase the diesel sales of REG by approximately 60 billion gallons per year.

In Jan 2022, ExxonMobil is expanding its interests in biofuels that can help reduce greenhouse gas emissions in the transportation sector, acquiring a 49.9% stake in Biojet AS, a Norwegian biofuels company that plans to convert forestry and wood-based construction waste into lower-emissions biofuels and biofuel components.

In Nov 2022, Shell enters the RNG sector through the acquisition of Denmark-based Nature Energy for ~$2bn.