Biofuels Market: Current Analysis and Forecast (2021-2027)

Biofuels are the fuels that are produced directly or indirectly from organic material i.e., biomass including plant or animal waste. These are stated as renewable fuels because the feedstock material utilized for their production can be replenished at a faster rate as compared to conventional fossil fuels. Biofuels are considered as a leading potential solution for mitigating energy and environmental security issues associated with petroleum & petroleum products dependency.
The world’s air quality is degrading rapidly as the air pollution levels are on the rise across the globe which may pose major health risks to the global population. For instance, As per, the World Health Organization, nearly 7 million deaths are attributed to air pollution every year. Also, 9 out of 10 people breathe air that exceeds WHO guideline limits containing high levels of pollutants, with low- and middle-income countries suffering from the highest exposures. To tackle the degrading environmental changes and their negative impacts, world leaders were legally bound to the Paris agreement in 2015. this agreement was joined by 191 parties and includes commitments from all countries to reduce their emissions and work together to adapt to the impacts of climate change. Owing to these concerns regarding the deteriorating environment and various government regulations for adopting cleaner energy fuel the biofuels market is expected to witness growth in upcoming years.
Another significant reason responsible for the growth of the biofuel market is growing energy needs, mandates for biofuel blending in automotive fuels and increasing government regulation for a cleaner and sustainable fuel. For instance, as per the Tracking Transport report by IEA, in 2019, the biofuel production for transport has expanded more than 6% year-on-year and is projected to grow 3% annually over the course of the next year five years. Further, in OECD, it has also been anticipated that the share of biofuels in road transport will increase 20% by 2040.
Based on type, the global biofuel market is fragmented into biodiesel, ethanol, and others. The ethanol segment of the global biofuels market was valued at USD XX billion in 2020 and is likely to reach US$ XX billion by 2027 growing at a CAGR of XX% from 2021-2027 as it is one of the widely adopted transport fuels.
Based on feedstock, the global biofuels market is segmented into corn, sugarcane, vegetable oils, and others. Amongst feedstock, the vegetable oils segment accounted for a market valuation of US$ XX billion in 2020 and is expected to reach US$ XX billion by the year 2027, at a CAGR of XX% over the analyzed period owing to the growing use of vegetable oils as a source of diesel fuel.
For a better understanding of the market adoption of the biofuels, the market is analyzed based on its worldwide presence in the countries such as North America (the United States and Canada, Rest of North America), Europe (Germany, France, Italy, Spain, United Kingdom, and Rest of Europe), Asia-Pacific (China, Japan, India, Australia and Rest of APAC), and Rest of World. North America constitutes a major market for the biofuels industry and generated revenue of USD XX Million in 2020 due to the emerging demand for sustainable and cleaner fuel of energy along with the supportive government regulations. Also, the presence of well-established players in the region adding pace to the growth of the market in the region.
Some of the major players operating in the market are Renewable Energy Group, Inc, Archer Daniels Midland Company, POET, LLC, Abengoa Bioenergy S.A., Cargill, Pacific Ethanol Inc., Valero Energy Corp., Royal Dutch Shell, Butamax, Wilmar International, among others. Several M&As along with partnerships have been undertaken by these players to develop biofuels.
This market is expected to witness a boost on account of the growing popularity of renewable energy and reduced dependency on fossil fuels across the globe. In addition to this, key players worldwide are introducing new and advanced products as well as applications to cater to the middle-income group propelling the growth of the biofuel market across the globe.