Biofuels Market Size, Share, Industry, Forecast and outlook (2024-2031)

Global Biofuel Market is segmented By fuel type(Bioethanol, Biodiesel), By end-user (bioethanol)(Automotive industry, Agriculture industry, Mining, Marine industry, Power, Others), and by Region (North America, Latin America, Europe, Asia Pacific, Middle East, and Africa) – Size, Share Outlook, and Opportunity Analysis, 2023-2030

Biofuel Market Overview

The Global Biofuel Market is expected to grow at a CAGR of 7.65% during the forecasting period (2023-2030).

• A biofuel is a fuel that is produced through contemporary biological processes, such as agriculture and anaerobic digestion, rather than a fuel produced by geological processes such as those involved in the formation of fossil fuels, such as coal and petroleum, from prehistoric biological matter.

• Biofuels can be derived directly from plants, or indirectly from agricultural, commercial, domestic, and/or industrial wastes.

• Renewable biofuels generally involve contemporary carbon fixation, such as those that occur in plants or microalgae through the process of photosynthesis. Other renewable biofuels are made through the use or conversion of biomass.

• The global transportation fuel demand is expected to go up by 55% by 2030 compared to 2004 and is set to drive the demand for biofuels.

• Some countries have set targets regionally to use biofuels as a pure mix or as blends. In countries, like Germany and India, governments are directing the use of biodiesel in their public transport system. The Renewable energy directive (RED) set by Europe aims at having 10% of the transportation system using renewable energy, such as biofuels. Thus contributing to the overall goal of achieving 20% of the energy mix by 2020.

Biofuel Market Scope

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Biofuel Market Drivers

• The growing interest in alternative fuels in the global market is due to uncertain fuel prices, energy security, and continuously rising emission levels.

• The gradual depletion of fossil fuel reserves has given rise to renewable biofuels. The R&D efforts worldwide have led to the use of biofuels slowly, which is gradually moving to large-scale commercialization because their performance is similar to gasoline and diesel.

• In May 2018, the US Department of Energy (DOE) issued four funding opportunities (FOAs) totaling up to USD 78 million for advanced biofuels, and bioenergy research and development under the Office of Energy Efficiency and Renewable Energy’s Bioenergy Technologies Office (BETO).

Biofuel Market Restraints

• Increasing taxes and import duties are impacting the growth of the Biodiesel market globally. For instance, in October 2018, European Biodiesel Board (EBB) advised the European Commission (EC) to implement high conditional duties against biodiesel imports into Europe from Argentina.

• The expiration of tax incentives is an added burden on the biodiesel market. For instance, the biodiesel tax incentive in the US was retroactively renewed for 2017 in the Bipartisan Budget Act of 2018 in March 2018. However, the incentive was not extended to 2018 and is currently expired, which is leading the investors to hold their investments in biodiesel development.

Biofuel Market Segmentation Analysis

By Fuel Type

• The global biofuel market is segmented by product type into bioethanol and biodiesel. The bioethanol segment holds a significant market share, owing to the increasing demand for bioethanol as automobile fuel due to its environment-friendly characteristic to mitigate greenhouse gas emissions is expected to propel industry growth.

• Biodiesel improves lubricity in fuel and keeps moving parts from wearing prematurely. Biodiesel also causes far less damage to the environment as compared to petroleum diesel in the case of spillage.

By Geography

• North America has the highest share of the global biofuels market, owing to its supportive policies extended by the governments, such as the many tax incentives provided by the governments.

• The US is the global leader in biodiesel, owing to its robust policies, mandates, and incentives for encouraging production, consumption, and research for new technologies for alternative fuels.

• South America is the second-largest producer of biofuels after North America, with Brazil and Argentina producing more than 40% of the biofuels in 2015.

• The elevated oil prices and increased consumption of oil have been a few of the major drivers for the development of biofuels in Brazil.

• Furthermore, the availability of large arable land and government support have made the country the second-largest producer of biodiesel.

Recently, the U.S. government blocked in practice the import of Argentine biodiesel, which is made exclusively from soybeans, by imposing high import duties, arguing dumping, or unfair competition with local soybean producers. However, the prevalent strong European bonds are expected to increase the growth of the market in Argentina.

Biofuel Market Companies and Competitive Analysis

• The increase in product portfolio and geographical expansion of the companies are driving the global biofuels market.

• In January 2018, Cargill announced the expansion of its portfolio in ethanol by expanding its production at its German plant.

• In September 2017, Cargill build a state-of-the-art biodiesel plant in Wichita, Kansas, which would enable Wichita to be a competitive supplier in the biofuels market, bringing value to the suppliers and customers we work with, and connecting farmers with industrial customers by supplying quality biomass-based diesel.

• In 2017, Nissan launched Bio-Ethanol Fuel Cell in Brazil, to develop a prototype vehicle that is powered by a solid oxide fuel cell (SOFC).