Biofuel Market - Growth, Trends, and Forecast (Outlook to 2028)

Market overview
Supportive government regulations, increasing demand for clean and renewable fuel sources, and growing need for biofuel as an eco-friendly fuel in road transportation are the factors driving the biofuel market.

Any fuel created from biomass-that is, plant or algae material or animal waste-is biofuel. Biofuel is recognized as a renewable energy source because such feedstock material can be easily renewed.

Some long-exploited biofuels, such as wood, maybe burnt directly as a raw material to generate heat. The heat may then be utilized to power generators at a power plant to generate electricity. Several existing power plants use grass, wood, or other types of biomass to generate electricity.

Because of the extensive infrastructure currently in place, liquid biofuels are of particular interest, especially transportation. The most abundant liquid biofuel is ethanol (ethyl alcohol), produced by fermenting sugar or starch.

Brazil and the United States are two of the world's largest ethanol producers. In the United States, ethanol biofuel is largely generated from corn (maize) grain and is commonly combined with gasoline to make 'gasohol,' a 10% ethanol fuel. In Brazil, ethanol biofuel is predominantly produced from sugarcane and is typically utilized as a pure ethanol fuel or in gasoline blends comprising 85 percent ethanol.

Using ethanol or biodiesel decreases the use of gasoline and diesel fuel derived from crude oil, hence lowering the quantity of crude oil imported from other nations. Ethanol and biodiesel are also more environmentally friendly than pure gasoline and diesel fuel.

Biodiesel, the second most prevalent liquid biofuel, is manufactured mostly from oily plants (oil palm or soybean). Biodiesel, which has gained the greatest traction in Europe, is used in diesel engines and is frequently blended with petroleum diesel fuel in varied proportions.

Other biofuels in development include methane gas and biogas, which may be generated without oxygen from the breakdown of biomass and methanol, butanol, and dimethyl ether.

To lessen reliance on petroleum, the International Energy Agency projected that biofuels will fulfill more than a quarter of the global demand for transportation fuels by 2050. Transport biofuel demand declined by 8% from 2019 to 2020 as a result of the Covid-19 pandemic, but it is expected to rise in 2021. While biofuel consumption increased by 5% per year between 2010 and 2019, the Net Zero Emissions by 2050 Scenario necessitates a substantially higher average growth rate of 14% per year through 2030. With few alternative low-carbon technological options, biofuels are especially vital for transportation, shipping, and aircraft.

Furthermore, biofuels are increasingly being created from feedstocks such as wastes and leftovers under this scenario, which do not compete with food crops. Biofuels produced from these resources fulfill 45 percent of overall biofuel demand by 2030 under the Net Zero Emissions by 2050 Scenario; in 2020, only an estimated 7 percent of biofuels come from wastes and residues.

Policies

• USA - The Renewable Fuel Standard (RFS) is a government policy that requires a certain percentage of renewable fuels in transportation fuel sold in the United States. The Renewable Fuel Standard was established by the Energy Policy Act of 2005. The RFS mandates that renewable fuel be mixed into transportation fuel in increasing volumes each year, with a target of reaching 36 billion gallons by 2022. The RFS program requires each renewable fuel category to release fewer greenhouse emissions (GHGs) levels than the petroleum fuel it replaces
• EU - The European commission's renewable energy proposal for 2030 - The proposed new directive, called RED II, entered into effect on January 1, 2021. The plan recommends legislative steps to reach a renewable energy share of 27 percent of the energy used by the electricity, heating, cooling, and transportation sectors by 2030. RED II would require that 6.8% of transportation fuels, especially advanced alternative fuels and renewable power, be derived from renewable sources as part of the overall 2030 objective. Fuel companies may be able to meet this goal by combining renewable fuels, such as:
• Non-food biofuels, both advanced and traditional, and biogas derived from low-carbon feedstocks
• Non-biological renewable liquid and gaseous transportation fuels;
• Waste-based fossil fuels; and
• Renewable electricity.
• Brazil: Brazil attended the 21st Conference of the Parties (COP21) of UNFCCC in Paris in December 2015. At COP21, each nation presented an 'Intended Nationally Determined Contribution (NDC)' plan to decrease domestic greenhouse gas (GHG) emissions. Brazil has promised to cut domestic GHG emissions by 37% by 2025 and 43% by 2030. The RenovaBio program was launched on December 24, 2019. RenovaBio's goals include supporting Brazil in achieving its COP21 Paris Agreement responsibilities and reducing GHG emissions through biofuels' development, production, and usage. It also encourages the increase of biofuel production and usage in the national energy grid, stresses the continuity of fuel supply, and adds to the predictability of diverse biofuels in the national fuel market

Market developments and trends

• Countries like France, Italy, and Germany have reduced fuel excise taxes to assist biofuel to compete with fossil fuels. These amendments encourage the use of biofuel blended with conventional fuels
• The growth of the biofuel industry in Europe is attributed to the growing adoption of biofuels in road transportation applications
• U.S. is the global leader in ethanol production, and it consumed around 12.6 billion gallons of gasoline-ethanol in 2020. The majority of motor gasoline marketed in the United States today contains roughly 10% fuel ethanol by volume
• According to the Agricultural Department of U.S., ethanol exports in the United States were 1.3 billion gallons worth $2.3 billion in 2020
• Brazil is the world's second-largest producer of biodiesel. Brazil has a mandated biodiesel blend rate. In July 2021, the Brazilian government mandated that the proportion of vegetable oil mixed into Brazil's biodiesel be lowered from 13 percent (B13) to 10% (B10)
• In India, the government-approved National Policy on Biofuels-2018 proposes an indicative target of 20% ethanol blending in gasoline and 5% biodiesel blending in diesel by 2030. This is likely to promote biofuel usage in India
• China's economy is expanding, which means that the country's contribution to total global carbon dioxide emissions is increasing. As a result, the rising worldwide demand for renewables is being driven mostly by reducing emissions, fueling biodiesel market expansion in the nation
• Chevron U.S.A. Inc., and Bunge North America, Inc., announced an M.O.U. in 2021 for a proposed 50/50 joint venture to assist fulfill the demand for renewable fuels and create reduced carbon intensity feedstocks
• Marathon Petroleum Corp. and Archer Daniels Midland Co announced an agreement in August 2021 to create a joint venture to manufacture soybean oil to meet the rapidly expanding demand for sustainable diesel fuel
• Archer Daniels Midland Co announced a memorandum of understanding with Gevo to explore a potential joint venture involving the Columbus and Cedar Rapids dry mills and A.D.M.'s ethanol assets, intending to transition 900 million gallons of ethanol production to meet the growing demand for low carbon sustainable aviation fuel
• In an effort to foster the circular economy, Cargill is spending $150 million on a new plant in Belgium that creates advanced biofuels from garbage and leftovers
• Repsol and Iberia have flown the first flight utilizing waste-derived biofuel in Spain. Because of biofuels and greater energy efficiency, this low-carbon-footprint flight represents another step toward the aviation sector's decarbonization

Opportunities

• Manufacturers can capitalize on the opportunity to provide SAF (sustainable aviation fuel) to the US and Europe. These two countries have set goals to produce almost 4 billion gallons of annual sustainable aviation fuel by 2030 and more than 45 billion by 2050
• The maritime and rail sectors have big addressable fuel markets and are actively looking for solutions to reduce carbon emissions. Manufacturers may provide biofuels to these areas, which can have a huge positive impact by instantly lowering emissions
• Emerging flex-fuel engines in India which are capable of running on 100 percent petrol or 100 percent biofuel

The publisher's Global Biofuel Market report provides insights into the current global and regional market demand environment and prognosis.

The study offers a thorough examination of the many factors that impact the global biofuel market growth. The study also comprehensively analyses the global biofuel market by segmenting it based on geography (North America, Europe, Asia-Pacific, Middle-East and Africa, and South America), generation (First-generation biofuels, Second-generation biofuels, Third-generation biofuels, and Fourth-generation biofuels), and type (Gaseous biofuel and Liquid biofuel).

The report also discusses current and future market possibilities, market trends, advancements, and the effect of Covid-19 on the global biofuel market, essential developments, regions, and segments poised for the fastest-growth, competitive landscape. Further, the global biofuel market size, and demand forecast, growth rates will also be provided in the report.


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