The global advanced biofuel market size was valued at USD 63.6 billion in 2022 and is anticipated to witness a compound annual growth rate (CAGR) of 41.18% from 2023 to 2030.The global demand for energy is increasing with the increasing consumption owing to the rising population. The growing consumption has increased the need for more renewable and sustainable sources of energy. Advanced biofuel, which are known as second-generation biofuel, are used as a substitute for gasoline and diesel in the automotive industry. The low carbon emission has been the driving factor for the utilization of advanced biofuel in the automotive sector. The advanced biofuel mostly utilize the lignocellulose mass for their production.
Global advanced biofuel market: Regional Insights
North America is the most dominant region in global advanced biofuel market in terms of revenue and was valued at US$ 23.79 billion in 2022, owing to increasing demand for cleaner burning transportation fuels. Various regulations such as California’s Low Carbon Fuel Standard and Renewable Fuel Standard are the key drivers for investment in advanced biofuel. The purpose of these regulations is to reduce emissions of GHG (greenhouse gases) and to implement low carbon fuel standard. Europe is the second largest region in global advanced biofuel market. In Europe, the advanced biofuel market is driven by high R&D&D (research & development & demonstration) activities in Europe indicating the potential growth of market for applications in marine, shipping, and air transport. Asia Pacific is the fastest growing region in terms of value in the global advanced biofuel market. Asia Pacific was valued at US$ 13.12 Billion in 2022. This is attributed to the increasing manufacturing industry and growing awareness about the usage of advanced biofuel in emerging economies such as India, China, and Indonesia. In Australia, the advanced biofuel sector was supported by the Australian Renewable Energy Agency (ARENA).
Figure.1 : Global Advanced Biofuel Market by Regions, 2022
Global Advanced Biofuel Market- Growth Drivers:
Initiatives taken by the Government and its applications:
The key market drivers for the global advanced biofuel market is the rise in demand for cleaner Energy sources to reduce the carbon emissions. The initiatives taken by various governments have further helped the market of advanced biofuel to grow. The application of biofuel in the automotive industry has also impacted the growth of the advanced biofuel market.
Versatility and Sustainability of the Biofuel market:
Global advanced biofuel market is driven by factors such as supportive government regulations promoting the usage of second-generation biofuel in different end- use sectors, including manufacturing and energy sectors, and growing concern regarding sustainability of first generation biofuel among stakeholders. Moreover, depleting carbon based fossil fuel is also promoting the usage of second generation biofuel among users.
Global Advanced Biofuel Market Trends:
Globally, the transportation industry is the largest emitter of greenhouse gases, due to the combustion of fossil fuels used in internal combustion engines. The transportation industry has a large proportion of private vehicles, such as four- and two-wheelers, as well as commercial vehicles.
Personal vehicles are mainly light vehicles and uses gasoline as a fuel. To limit greenhouse gas emissions, countries around the world have adopted standards, and more countries are mandated to blend gasoline with ethanol to reduce emissions and reduce dependency on fossil fuels.
Key blending missions driving global biofuel demand are established in North America, India, Brazil, Europe, and more. For example, the Indian government and petroleum marketing companies are actively promoting the blending of 10% ethanol in motor gasoline with the aim of gradually increasing the blending ratio to 20% by 2028. Similarly, Canada is likely to issue final regulations to announce its Clean fuel standards program in the spring of 2022. The Clean Fuel Standards Program includes a national target of ethanol blends of an average of 15% by 2030.
In addition, in March 2022, the Brazilian Ministry of Economy announced that it would exempt ethanol imports from taxes, including other products, until the end of 2022 to alleviate inflationary pressures. This will promote the blending of ethanol into gasoline and will stimulate the market growth.
Hence, due to the above points, the Ethanol segment is expected to witness significant growth in the biofuel market during the forecast period.
|Base Year:||2022||Market Size in 2022:||US$ 63.6 Bn|
|Historical Data for:||2017-2020||Estimated Year:||2023|
|Forecast Period 2023 to 2030 CAGR:||41.18%||Forecast Period:||2023-2030|
Abengoa Bioenergy, S.A., A2BE Carbon Capture, LLC, Algenol Biofuel, Chemtex group, Bankchak Petroleum, Clariant Produkte GmbH, Fiberight LLC, DuPont Industrial Biosciences, Fujian Zhongde Energy Co., Ltd, Inbicon, GranBio, INEOS Bio, POET-DSM Advanced Biofuel LLC, KiOR Inc., ZeaChem Inc., and Sundrop Fuels, Inc.
|Restraints & Challenges:||
Global Advanced Biofuel Market restraints:
Lack of awareness regarding benefits of second-generation biofuel in Asian countries has negatively affected the growth of the advanced biofuel market in this region. Issues from alternative products such as fall of crude oil prices and limitation in processes are some of the major factors that are expected to hamper growth of the market over the forecast period.
Global Advanced Biofuel Market- Impact of COVID-19:
The COVID-19 explosion had an impact on world’s primary markets. COVID-19’s effect on the global industry is adverse. The North America is largest advanced biofuel market, but supply and demand for the advanced biofuel has decreased with spread of covid and lockout situations, in the U.S. Because of COVID-19, instability of the supply chain, volatility in the supply of raw materials, inadequate manpower in the production facility, and less demand for end-use customers have hindered the growth of the target industry in developed and developing economies worldwide. The impact is huge, especially in the oil market, as the governments of many countries have imposed restrictions on movement and migration within and around the country, thus negatively affecting the economy. transportation fuel market.
Global Advanced Biofuel Market Segmentation:
Global advanced biofuel market are classified on the basis of raw materials such as Jatropha, Camelina, Algae, Simple Lignocellulose, Complex Lignocellulose, and others. Advanced biofuel produced from algae segment accounted for the largest market share i.e due to the oil contents present in Algae. This Algae grows on wasteland and is grown using ocean and wastewater. Algae-based biofuel are relatively less harmful to the environment, if spilled, and are biodegradable by nature. Furthermore, the growth rate of algae is 20 times faster as compared to other raw materials, such as jatropha. Advanced biofuel are also classified on the basis of fuel types such as Cellulosic Ethanol, Biodiesel, Biobutanol, BioDME, and Others. Biodiesel segment holds the largest revenue share in 2022 in the global advanced biofuel market, due to increasing use of biofuel as engine fuel.
Global advanced biofuel market was valued at US$ 63.86 Billion in 2022 globally and is expected to exhibit a CAGR of 41.18%, in terms of revenue, during forecast period 2023-2030.
Figure . 2 : Global Advanced Biofuel Market by Segments, 2022
Major players operating in the global advanced biofuel market include Abengoa Bioenergy, S.A., A2BE Carbon Capture, LLC, Algenol Biofuel, Chemtex group, Bankchak Petroleum, Clariant Produkte GmbH, Fiberight LLC, DuPont Industrial Biosciences, Fujian Zhongde Energy Co., Ltd, Inbicon, GranBio, INEOS Bio, POET-DSM Advanced Biofuel LLC, KiOR Inc., ZeaChem Inc., and Sundrop Fuels, Inc.