Emerging Biofuels Market
Emerging Biofuels Market Size, Share & Industry Analysis, By Feedstock (Corn, Sugarcane, Vegetable Oils, Others), By Fuel Type (Ethanol, Biodiesel, Biogas, Others), By Application (Transportation, Power Generation, Heat Generation), By Region (North America, Europe, Asia-Pacific, Latin America, Middle East & Africa) -- Share, Size, Outlook, and Opportunity Analysis, 2024-2031.
Market Overview:
The growing biofuel industry is estimated to increase at a 7.8% CAGR between 2024 and 2031. The market value is expected to rise from YY USD in 2024 to YY USD by 2031. North America presently dominates the market, with the United States having a substantial share. Key metrics include production capacity, feedstock availability, and government aid through legislation and incentives.
The biofuels industry is quickly increasing due to growing environmental concerns, regulatory regulations for renewable energy consumption, and a desire to reduce dependency on fossil fuels. Technological advancements in biofuel production techniques as well as an increase in feedstock options are propelling market expansion.
Market Dynamics:
Market Trend: Shift towards advanced biofuels and waste-based feedstocks
The biofuels industry is shifting dramatically towards advanced biofuels and waste-based feedstock. This trend arose from the necessity to address sustainability issues associated with first-generation biofuels, which primarily use food crops as feedstock. Advanced biofuels derived from non-food biomass sources such as agricultural waste, forestry waste, and municipal solid waste are becoming increasingly popular due to their low environmental impact and absence of competition with food production.
The utilisation of waste-based feedstocks is especially important since it addresses two big issues at once: garbage management and renewable energy generation. For example, the use of waste cooking oil in biodiesel production has increased dramatically in recent years. This method not only ensures a sustainable fuel source, but it also aids in the proper disposal of waste oils that would otherwise harm aquatic life.
Furthermore, the advanced biofuels industry is seeing a surge in cellulosic ethanol production from lignocellulosic biomass such as switchgrass, corn stover, and wood chips. These second-generation biofuels produce more energy and emit fewer greenhouse gases than traditional biofuels. As technology progresses and supply expands, advanced biofuels are anticipated to play a larger part in the global energy mix.
Market Driver: Supportive government policies and renewable fuel mandates
Government support in the form of rules, mandates, and financial incentives has been a significant driver of the biofuels industry. Many countries have implemented renewable fuel standards or blending requirements that require a certain percentage of biofuels to be blended with conventional fuels. These rules create a guaranteed market for biofuels, which increases production and investment in the sector.
For example, the Renewable Gas Standard (RFS) program in the United States mandates that all transportation gasoline sold in the country have a minimum amount of renewable fuel. The United States Environmental Protection Agency (EPA) has set the entire renewable fuel volume for 2022 at 20.63 billion gallons, with 15 billion gallons coming from conventional biofuels like corn ethanol. Similarly, the European Union's Renewable Energy Directive II (RED II) sets a target of 14% renewable energy in transport by 2030, with advanced biofuels playing a key role.
Financial incentives such as tax credits, subsidies, and loan guarantees have also contributed to increased biofuel production and consumption. For example, the United States Biodiesel Tax Credit provides a $1.00 per gallon tax credit to biodiesel makers, thereby significantly increasing the country's biodiesel economy.
These supportive policies not only encourage market expansion but also boost research and development in advanced biofuel technologies, thereby assisting in the reduction of technical and economic barriers to large-scale commercialisation.
Market Restraint: Feedstock price volatility and supply chain challenges
One of the most critical challenges confronting the biofuels industry is the volatility of feedstock prices and supply chain disruptions. Feedstock expenses account for a big portion of biofuel production costs, and price volatility can have a significant impact on biofuel production's economic viability.
Maize prices, for example, have varied dramatically in recent years, affecting ethanol production costs directly. Corn prices rose to a seven-year high of more than $7 a bushel in 2021, significantly limiting ethanol producers' profit margins. Similarly, soybean oil prices have varied dramatically, influencing biodiesel production costs.
Supply chain difficulties, such as transportation and storage constraints, can have an impact on feedstock supply and biofuel distribution. The COVID-19 pandemic highlighted worldwide supply chain weaknesses, causing disruptions in biofuel production and delivery.
These problems create uncertainty for biofuel producers and have the potential to hinder market expansion if not addressed effectively through feedstock diversification and improved supply chain management strategies.
Segment Overview:
Ethanol dominates the biofuels market, accounting for the largest share in terms of production and consumption.
Ethanol, primarily sourced from corn and sugarcane, remains the dominant component of the global biofuels industry. Its widespread use as a gasoline blend in numerous countries, most notably the United States and Brazil, has greatly contributed to its market dominance. The ethanol sector benefits from well-established production infrastructure and advantageous government policies in major producing countries.
Corn-based ethanol output in the United States, the world's top ethanol producer, will be about 15 billion gallons in 2021. The Renewable Fuel Standard (RFS) program, which mandates the blend of renewable fuels into transportation fuels, has been a major driver of ethanol consumption. Brazil, the world's second-largest producer, has a long-standing ethanol program based on sugarcane, and flex-fuel vehicles capable of running on high-ethanol mixes have contributed to its success.
The ethanol business has also made technological advancements, particularly in the manufacturing of cellulose ethanol. POET-DSM and Raízen effectively commercialised cellulosic ethanol production using agricultural residues and other lignocellulosic feedstocks. Raízen's facility in São Paulo, Brazil, has the capacity to create 40 million litres of cellulosic ethanol yearly, demonstrating potential for growth in advanced ethanol production.
Despite its dominant position, the ethanol business faces challenges such as the food vs. fuel debate and the need for new sustainable feedstocks. This has led to increased research and investment in second-generation ethanol production technology, which might boost ethanol's position in the biofuel market while simultaneously resolving sustainability concerns.
Regional Outlook:
North America leads the global biofuels market, with the United States being the primary contributor to regional dominance.
The strong ethanol industry in the United States, aided by favourable government laws and a well-developed agricultural sector, is primarily responsible for North America's dominance in the biofuels market. The region has an abundance of feedstock, particularly maize for ethanol production, as well as a comprehensive biofuel production and distribution infrastructure.
The United States Renewable Fuel Standard (RFS) program has boosted biofuel production and usage in the region. Under this program, the US Environmental Protection Agency (EPA) specifies annual volume criteria for renewable fuels to be blended with transportation fuels. This legal framework has led to a stable and growing market for biofuels, notably ethanol and biodiesel.
In recent years, the US biofuels industry has shown remarkable resilience and expansion. Despite the challenges posed by the COVID-19 outbreak, the business has recovered tremendously. In 2021, US ethanol output will reach approximately 15 billion gallons, returning to pre-pandemic levels. The biodiesel and renewable diesel sectors have also expanded. dramatically, with production capacity increasing by more than 500 million gallons between 2020 and 2021.
Canada has also helped to grow the region's biofuels business through the Clean Fuel Standard (CFS), which aims to reduce fuel carbon intensity. This plan is projected to increase demand for biofuels in the next few years, strengthening North America's dominance in the global market.
The region has witnessed a significant investment in advanced biofuel technology. For example, several companies are developing and expanding cellulosic ethanol production from agricultural waste and other non-food biomass sources. These initiatives aim to address the sustainability issues associated with first-generation biofuels while also generating new market growth opportunities.
Furthermore, North America is at the forefront of studying and commercialising sustainable aviation fuels (SAF), a rapidly growing segment of the biofuels business. Major airlines and fuel providers in the region have formed coalitions to increase SAF production and use, driven by the aviation industry's goal of lowering carbon emissions.
Competitive Intelligence:
The global biofuels market is extremely competitive, with a mix of large international corporations, established regional companies, and young entrepreneurs. To maintain their competitive advantage, significant companies are expanding production capacity, investing in advanced technologies, and diversifying feedstock sources.
Major oil companies are investing more in biofuels as they transition to cleaner energy sources. For example, BP has significantly expanded its bioenergy portfolio through a joint venture with Bunge in Brazil, forming BP Bunge Bioenergia, one of the country's major bioenergy firms. Shell has invested in advanced biofuels, including acquiring a 50% stake in Raízen, a major Brazilian biofuel producer.
POET, ADM, and Valero Energy Corporation are the dominant players in the US ethanol business, accounting for a significant share of the country's ethanol production capacity. To protect their market positions, these companies have invested in efficiency improvements and advanced ethanol manufacturing technology.
Significant mergers and acquisitions have happened in the biodiesel industry. Chevron paid $3.15 billion for Renewable Energy Group (REG), a large biodiesel producer, in 2022, demonstrating the growing importance of biofuels in major oil companies' energy transition initiatives.
Gevo, Neste, and Enerkem are making significant advances in developing and commercialising next-generation biofuels. Neste, in particular, has established itself as a global leader in renewable diesel and sustainable aviation fuel production, with ambitions to expand capacity to 5.5 million metric tonnes per year by the end of 2023.
Strategic partnerships and collaborations are becoming common in the industry. LanzaTech, for example, has developed collaborations with a number of companies to commercialise its carbon recycling technology for creating ethanol from industrial waste gases. Collaborations like these encourage creativity and speed up the development of sustainable biofuel alternatives.
Raízen and Copersucar dominate the sugarcane ethanol market in Brazil, while Verbio and CropEnergies lead in the European biofuels sector.
As the industry evolves, firms that can successfully negotiate regulatory frameworks, invest in new technologies, and guarantee sustainable feedstock supply are likely to emerge as global biofuel market leaders.
Analyst Opinion:
The biofuels industry is at a critical juncture, with significant development and transformation projected in the next few years. While first-generation biofuels, particularly corn-based ethanol and soybean-based biodiesel, continue to dominate the market, the shift to advanced biofuels is gathering momentum. Concerns about sustainability and the need to restrict competition from food production are driving this transformation.
One of the most exciting industrial trends is the advancement of sustainable aviation fuels (SAFs). With the aviation industry under increasing pressure to reduce its carbon footprint, SAF represents a big potential opportunity for the biofuels sector. Major airlines and fuel corporations are forming coalitions to enhance SAF production, and favourable government policies are likely to exacerbate the trend.
Another consideration is the combination of biofuel production with carbon capture and storage (CCS) technologies. This combination has the potential to generate carbon-negative fuels, which could revolutionise the fight against climate change. Several tests into this concept are already underway, and their success could alter the biofuels landscape.
Digitalisation and artificial intelligence play critical roles in improving biofuel manufacturing processes. These technologies have the potential to boost efficiency, reduce costs, and improve the overall sustainability of biofuel production.
Finally, the increasing emphasis on circular economy concepts is likely to drive innovation in feedstock sourcing. Waste-based feedstocks, such as agricultural leftovers, municipal solid waste, and industrial byproducts, are expected to play an increasing role in biofuel production, addressing waste management challenges as well as the desire for sustainable energy sources.
While challenges remain, particularly in scaling up sophisticated biofuel technology and handling complex governmental environments, the long-term outlook for the biofuels industry is promising. As the world moves to decarbonise transportation, biofuels will become an increasingly essential part of the global energy mix.
Major Players:
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POET LLC
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Archer Daniels Midland Company (ADM)
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Valero Energy Corporation
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Green Plains Inc.
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Neste Oyj
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Renewable Energy Group, Inc. (now part of Chevron Corporation)
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Raízen
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Copersucar
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Verbio Vereinigte BioEnergie AG
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CropEnergies AG
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Gevo, Inc.
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Enerkem
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LanzaTech
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BP Bunge Bioenergia
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Shell plc
Key Developments:
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June 2022: Chevron Corporation completed the acquisition of Renewable Energy Group (REG), expanding its renewable fuel production capacity.
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March 2023: LanzaTech announced plans to build its first commercial-scale ethanol plant using waste gases in Belgium, marking a significant step in the commercialisation of its carbon recycling technology.
1. INTRODUCTION
1.1. Market Definitions & Study Assumptions
1.2. Market Research Scope and Segment
1.3. Research Methodology
2. EXECUTIVE SUMMARY
2.1. Market Overview & Insights
2.2. Segment Outlook
2.3. Region Outlook
3. COMPETITIVE INTELLIGENCE
3.1. Companies Financial Position
3.2. Company Benchmarking—Key Players
3.3. Market Share Analysis -- Key Companies
3.4. Recent Companies Key Activities
3.5. Pricing Analysis
3.6. SWOT Analysis
4. COMPANY PROFILES (Key Companies List by Country) (Premium)
5. COMPANY PROFILES
5.1. POET LLC
5.2. Archer Daniels Midland Company (ADM)
5.3. Valero Energy Corporation
5.4. Green Plains Inc.
5.5. Neste Oyj
5.6. Renewable Energy Group, Inc. (now part of Chevron Corporation)
5.7. Raízen
5.8. Copersucar
5.9. Verbio Vereinigte BioEnergie AG
5.10. CropEnergies AG (*LIST NOT EXHAUSTIVE)
6. MARKET DYNAMICS
6.1. Market Trends
6.1.1. Shift towards advanced biofuels and waste-based feedstocks
6.1.2. Integration of biofuel production with carbon capture and storage
6.1.3. Increasing focus on sustainable aviation fuels (SAF)
6.2. Market Drivers
6.2.1. Supportive government policies and renewable fuel mandates
6.2.2. Growing environmental concerns and need for emissions reduction
6.2.3. Technological advancements in biofuel production processes
6.3. Market Restraints
6.3.1. Feedstock price volatility and supply chain challenges
6.3.2. Competition with food production for agricultural resources
6.4. Market Opportunities
6.5. Porter's Five Forces Analysis
6.5.1. Threat of New Entrants
6.5.2. Bargaining Power of Buyers/Consumers
6.5.3. Bargaining Power of Suppliers
6.5.4. Threat of Substitute Products
6.5.5. Intensity of Competitive Rivalry
6.6. Supply Chain Analysis
6.7. Value Chain Analysis
6.8. Trade Analysis
6.9. Pricing Analysis
6.10. Regulatory Analysis
6.11. Patent Analysis
6.12. SWOT Analysis
6.13. PESTLE Analysis
7. BY FEEDSTOCK (MARKET SIZE/VALUE (US$ Mn), SHARE (%), MARKET FORECAST (%), YOY GROWTH (%)-- 2020-2031)
7.1. Corn
7.2. Sugarcane
7.3. Vegetable Oils
7.4. Lignocellulosic Biomass
7.5. Waste Materials
7.6. Others
8. BY FUEL TYPE (MARKET SIZE/VALUE (US$ Mn), SHARE (%), MARKET FORECAST (%), YOY GROWTH (%)-- 2020-2031)
8.1. Ethanol
8.2. Biodiesel
8.3. Renewable Diesel
8.4. Biogas
8.5. Sustainable Aviation Fuel (SAF)
8.6. Others
9. BY APPLICATION (MARKET SIZE/VALUE (US$ Mn), SHARE (%), MARKET FORECAST (%), YOY GROWTH (%)-- 2020-2031)
9.1. Transportation
9.1.1. Road Transport
9.1.2. Aviation
9.1.3. Marine
9.2. Power Generation
9.3. Heat Generation
9.4. Others
10. REGION (MARKET SIZE/VALUE (US$ Mn), SHARE (%), MARKET FORECAST (%), YOY GROWTH (%)-- 2020-2031)
10.1. North America
10.1.1. United States
10.1.2. Canada
10.1.3. Mexico
10.2. South America
10.2.1. Brazil
10.2.2. Argentina
10.2.3. Rest of South America
10.3. Europe
10.3.1. Germany
10.3.2. United Kingdom
10.3.3. France
10.3.4. Italy
10.3.5. Spain
10.3.6. Russia
10.3.7. Rest of Europe
10.4. Asia-Pacific
10.4.1. China
10.4.2. Japan
10.4.3. India
10.4.4. Australia
10.4.5. South Korea
10.4.6. Rest of Asia-Pacific
10.5. Middle-East
10.5.1. UAE
10.5.2. Saudi Arabia
10.5.3. Turkey
10.5.4. Rest of Middle East
10.6. Africa
10.6.1. South Africa
10.6.2. Egypt
10.6.3. Rest of Africa
*NOTE: All the regions mentioned in the scope will be provided with (MARKET SIZE/VALUE (US$ Mn), SHARE (%), MARKET FORECAST (%, YOY GROWTH)--2020-2031.
Emerging Biofuels Market Segmentation:
By Feedstock:
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Corn
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Sugarcane
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Vegetable Oils
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Lignocellulosic Biomass
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Waste Materials
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Others
By Fuel Type:
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Ethanol
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Biodiesel
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Renewable Diesel
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Biogas
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Sustainable Aviation Fuel (SAF)
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Others
By Application:
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Transportation
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Road Transport
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Aviation
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Marine
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Power Generation
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Heat Generation
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Others
By Region:
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North America
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Europe
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Asia-Pacific
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Latin America
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Middle East & Africa
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