The global biofuels market, comprising of both bioethanol and biodiesel, is a highly fragmented arena. This is because several players in the oil and gas industry have started producing biofuels in response to increased demand for the same, which has resulted from volatile oil prices. Multinational companies such as Archer Daniels Midland, Cosan, LLC, POET, and DuPont operate across the value chain and are among the key players in the biofuels market, finds Transparency Market Research (TMR) in a new study.
The global biofuel market stood at a volume of 35.38 bn gallons in 2015 and is expected to rise to 50.92 bn gallons by 2019, expanding at a CAGR of 9.6% from 2013 to 2019. Based on fuel type, bioethanol will continue to lead the market until 2019, representing 82.8% of the overall volume. Due to the rapidly increasing number of diesel-fueled vehicles globally, biodiesel will expand at a higher CAGR during the forecast period.
“The development of substitutes such as petrodiesel and bio-methane is likely to pose a significant threat to the demand for biofuels in the coming years,” says the author of the report. High capital investment requirements in research and technology development and a strong brand presence of multinational companies are making it difficult for new players to enter the market.
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North America to Lead Overall Market
North America was the leading regional market in 2015. Due to increasing government initiatives to reduce carbon footprint from the transportation sector and reduce the dependence on foreign fuel sources, the region is expected to retain its dominance until 2019, holding 39.56% of the overall market volume. The market is broadly classified into bioethanol and biodiesels. While the Europe bioethanol market will rise at a significant CAGR between 2013 and 2019, the Asia Pacific biodiesel market will expand at a CAGR higher than other regions during the same period.
Rising Concerns Regarding Environment Pollution to Propel Demand for Biofuels
The increasing use of fossil fuels for meeting energy requirements to run industries and motor vehicles has caused environment pollution. The release of harmful gases such as CO2, CO, SO2, and CFC has raised the global average temperature. This has compelled several governments across the world to implement stringent environment regulations to cut down these hazardous emissions. This, in turn, is promoting the use of biofuels globally.
Biofuels act as a source of economic development by creating employment and infrastructure. “Biofuels production provides employment in value chain areas such as the generation, blending, and sales. This model of economic development can be thought of as a sustainable development model,” says a TMR analyst. This factor is, therefore, boosting the demand for biofuels. Other factors bolstering the growth of the global biofuel market are rising concerns related to energy security and increasing oil import and energy import bills.
Rising Food Prices Owing to Increasing Biofuel Production to Impede Growth of Biofuels Market
Globally, the increasing food prices are attributed to adverse weather conditions, increasing demand for food, growing usage of crops for biofuels production, and unfavorable government policies. Of these, biofuels are being considered the primary reason for causing an increase in food prices. The negative impact of this trend is likely to increase in the near future, thereby, restraining the growth of the global biofuels market. Moreover, the barriers related to development, distribution, and retailing of biofuels are challenging the growth of the market.
However, the development of sustainable biofuels using new technologies and policies that reduce the adverse effects of biofuels on the environment is estimated to present lucrative opportunities to the market in the forthcoming years.
The global biofuels market has been segmented as follows:
Global biofuels market: By fuel type
- Bioethanol
- Biodiesel
Global biofuels market: By form
Solid
- Pellet Fuel
- Biochar
- Biocoal
Liquid
- Bioethanol
- Biodiesel
Gas
- Biogas
- Syngas
- Bio propane
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