April 18, 2024

The Rise of Renewable Energy Sources to Accelerate Growth of the Global Biofuels Market

Market Overview:

Biofuels are renewable fuels that are produced from biomass, such as vegetable oils, plant residues, and animal fats. Some of the common types of biofuels include biodiesel, ethanol, and biogas. Biofuels are preferred over conventional fossil fuels as they produce fewer greenhouse gas emissions and pollution. They also provide an environmentally friendly solution to power transportation. Biofuels can drop directly into regular gasoline and diesel vehicles and can also be used as heating fuels and for electricity generation. With growing awareness regarding the environmental impact of fossil fuels, biofuels are increasingly being adopted worldwide and present a sustainable solution to meet energy needs.

Market key trends:

One of the key drivers for the biofuels market is the rise in demand for renewable energy sources globally. Governments across regions are pushing policies to promote the adoption of clean energy in transportation and other applications to reduce dependence on fossil fuels. For instance, the European Union has set a target of 14% renewable energy in the transport sector by 2030. Similarly, the United States has set a target of producing 100 billion gallons of renewable fuels annually by 2030 under the Renewable Fuel Standard program. Strong policy support is encouraging production capacity additions of biofuels. Another major trend is technological advancements in biofuel production technologies. Companies are investing in R&D to develop cost-effective processes to produce cellulosic ethanol and advanced biofuels from non-food biomass, municipal solid waste, and algae, which will further support market growth over the forecast period.

Porter’s Analysis
Threat of new entrants: The biofuels market requires high capital investment due to the need to set up advanced biorefinery facilities. This poses high entry barriers for new players.
Bargaining power of buyers: Buyers have moderate bargaining power due to the availability of numerous global and regional players offering biofuels.
Bargaining power of suppliers: Feedstock producers have moderate bargaining power as biofuel producers can substitute feedstocks depending on availability and prices.
Threat of new substitutes: New energy sources such as natural gas, electricity and hydrogen pose threat of substitution. However, biofuels offer environmental benefits over fossil fuels.
Competitive rivalry: The global biofuels market is fragmented with the presence of numerous global and regional players. Competition is high based on product quality, prices and customer relationships.

Key Takeaways

The Global Biofuels Market Demand  is expected to witness high growth, exhibiting CAGR of 10.% over the forecast period, due to increasing environmental regulations around fossil fuel emissions. The market size for biofuels is expected to reach US$ 201.12 Bn by 2030 from US$ 101.02 Bn in 2023.

The Asia Pacific region is expected to dominate the global biofuels market during the forecast period. This is attributed to the presence of emerging economies like India and China with growing energy demands. Countries in the region are widely supporting the production and consumption of biofuels to reduce dependence on imported oil and meet renewable fuel targets.

Key players operating in the biofuels market are TotalEnergies, Cepsa, Honeywell, Neste, Unilever plc and Starbucks Corporation. Neste is one of the largest producers of renewable diesel globally. TotalEnergies and Cepsa are major suppliers of biofuel feedstocks and have widespread distribution infrastructure for biofuels. Several other new players are entering the market with innovative biofuel technologies focusing on advanced biofuels from cellulosic and algal sources.

Note:

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