The global biofuels market is highly fragmented with no single player holding more than 10% of the global market for both biodiesel and bioethanol, finds Transparency Market Research (TMR) in a new report. This is due to the emergence of a large number of biofuel producers to cater to the increasing demand for biofuels following the spurt in oil prices. Some major players in the global biofuels market that operate across the value chain for both biodiesel and bioethanol are Archer Daniels Midland Company, Green Plains Renewable Energy, and Total S.A.
TMR analyst says, “Top players in this market are focused on tapping into underutilized markets and acquire state-of-the-art production units to capitalize the opportunities.” A case in point is ARfuels, wherein the company uses latest technologies to produce biodiesel that meets international standards. To capitalize on this, Shell Australia Limited opened a biodiesel facility that utilizes ARfuel’s biodiesel, which meets international standards.
Use of superior technology is another key growth strategy that top players in this market are focused on. This is mainly to use technology for the conversion of waste into biofuel at low cost. Maintaining strong ties with partner companies is also one of the key growth models that companies in this market are adopting. This helps companies to create a strong supply and distribution channel.
Economic Benefits of Biofuels to Attract Progressively Higher Investments
TMR analyst points out, “Stringent environmental regulations is one of the prominent factors promoting the use of biofuels.” The use of fossil fuels for running industries has been a major factor for environmental deterioration and rise in the Earth’s temperature. To address this, accredited environmental agencies and several governments around the world have formulated laws to control carbon emissions in the atmosphere. These are directly or indirectly related to the use of biofuels and other renewable sources of energy.
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Need for economic development is another key factor driving the growth of the biofuels market. The use of biofuels is not only less harsh on the environment, but also helps in economic development by providing employment.
Concerns related to energy security, in the long run, is also a major factor boosting the growth of the biofuels market. Due to depleting crude oil reserves and increasing concerns about energy security in the long run, several countries around the world are seeking alternate sources for transportation fuel.
Lack of Adequate Infrastructure for Biofuels Detrimental to Market Growth
Increasing conflict between farmers and biofuel developers is detrimental to the growth of the global biofuels market. With increasing demand for biofuels, vast areas of land that is used for food cultivation would eventually be used for cultivating cash crops for biofuels production. This will have an impact on food prices due to their reduced production.
The hindrances pertaining to the development, distribution, and retailing of biofuels is also challenging the market’s growth. The slow technological development for the utilization of biofuels and limited availability of biofuels stations is also challenging the market’s growth.
The global biofuels production is expected to reach 50,921.4 million gallons by 2019. North America is the leading market for biofuels due to the increasing awareness about the use of biologically derived fuels and stringent environmental regulations for burning fossil fuels. Europe is also a significant market for biofuels. However, the developing economies of India and China will emerge as significant markets for biofuels in the coming years.
The market is segmented as follows:
Biofuels Market: By Fuel Type
- Bioethanol
- Biodiesel
Biofuels Market: By Form Analysis
- Solid (fuel pellets, biochar, biocoal)
- Liquid (bioethanol and biodiesel)
- Gaseous (biogas, biopropane, syngas)
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