July 24, 2024
Biofuels Market

The Biofuels Market Is Estimated To Witness High Growth Owing To Sustainable Alternative To Gasoline & Growing Emphasis On Energy Security

The biofuels market is estimated to be valued at US$ 91.17 Billion in 2022 and is expected to exhibit a CAGR of 10.8% over the forecast period 2023 to 2030, as highlighted in a new report published by Coherent Market Insights.

Market Overview:

Biofuels can be broadly defined as liquid fuels produced from biomass feedstocks like sugarcane, corn, vegetable oils and animal fats. They can directly replace or blend with gasoline, diesel and jet fuels. The most common types of biofuels available are ethanol, biodiesel, renewable diesel and biojet fuel. As a sustainable alternative to gasoline, biofuels help reduce dependence on fossil fuels and lower carbon emissions.

Market Dynamics:

Biofuels offer two major advantages driving their adoption. Firstly, policies promoting renewable and clean energy coupled with stringent emission norms are compelling fuel providers and automakers to increase the share of biofuels in transportation fuels. Major companies like TotalEnergies, Cepsa and Honeywell have set targets to increase biofuel production capacities. Secondly, geopolitical factors like energy security concerns are also prompting governments worldwide to diversify their fuel sources. Countries are promoting indigenous biofuel production from domestic feedstock to tackle over-reliance on energy imports. However, factors like high production costs relative to conventional fuels and availability of limited feedstock poses challenges to the large-scale replacement of gasoline and diesel with biofuels. Continuous research into advanced technologies for lower cost production pathways can help overcome these barriers.

Segment Analysis

The global biofuels market is dominated by the biodiesel segment, which accounts for over 60% share of the total market. Biodiesel is largely produced using feedstocks like vegetable oils, animal fats and waste cooking oils. It can be used in compression ignition (diesel) engines with little or no modifications. The high share of biodiesel segment is attributed to the widespread availability of feedstock and broader acceptance of biodiesel as a substitute for conventional petroleum diesel across various industries including automotive, aviation and marine.

PEST Analysis

Political: Supportive regulations and policies promoting the production and use of biofuels in many countries are driving the market growth. The renewable fuel standards mandated by governments have accelerated the adoption of biofuels.
Economic: Volatility in crude oil prices and rising energy security concerns are compelling nations to seek alternatives to conventional fossil fuels. The cost competitiveness of biofuels compared to gasoline and diesel is boosting the industry.
Social: Growing environmental awareness and focus on reducing carbon footprint are positively impacting the demand for green fuels like biofuels. Their renewable nature makes biofuels a sustainable fuel of the future.
Technological: Advanced technologies for large-scale production of advanced and cellulosic biofuels from non-food based feedstocks through biochemical and thermochemical conversion routes are gaining traction. This is expanding the horizons for biofuels industry.

Key Takeaways

The global biofuels market size is expected to witness high growth, exhibiting a CAGR of 10.8% over the forecast period, due to increasing environmental regulations mandating the use of cleaner fuels.

The North America region dominates the global biofuels market, with the U.S. being the largest producer and consumer of biofuels. Favorable government policies and proliferation of flexible fuel vehicles have boosted the adoption of bioethanol and biodiesel in the U.S. transportation sector.

Key players operating in the biofuels market are TotalEnergies, Cepsa, Honeywell, Neste, Unilever plc and Starbucks Corporation, Trinity Organics, Chevron, and BoxLNG Pvt. Ltd. Strategic partnerships and collaborations between upstream agribusinesses and downstream fuel manufacturers are helping key players expand their global presence.

*Note:
1. Source: Coherent Market Insights, Public sources, Desk research
2. We have leveraged AI tools to mine information and compile it