Biofuels Market Growth & Trends
The global biofuels market size is expected to reach USD 207.87 billion by 2030, according to a new report by Grand View Research, Inc. The market is expected to expand at a CAGR of 11.1% from 2023 to 2030. The rising need for sustainable energy resources, coupled with favorable government regulations to reduce dependency on fossil fuels is expected to be a major driver for market growth. Biofuels are eco-friendly, and renewable and have proved to be a viable option in the European Union, the Americas, and Asia Pacific for power generation. The various advantages obtained by employing biofuel include sustainability and reduction in carbon footprint. The outbreak of the COVID-19 pandemic across the globe in 2020 resulted in a slowdown in the growth of this market.
Delayed utility-scale projects due to lockdown measures, social distancing guidelines, and financial challenges negatively affected the demand for biofuels in the electricity generation segment. The COVID-19 pandemic also impacted the product demand in heat generation applications. Sluggish industrial activities have reduced the demand for heat consumption, thereby negatively affecting the demand for biofuels. The others segment in the product category, which includes propanol, butanol, methanol, and biogas, led the industry in 2022 and accounted for the largest revenue share followed by ethanol as the second-largest segment in the biofuels market.
The major reason for the dominance of the others segment is the shift in focus of countries toward the use of renewable sources, particularly for electricity generation, which significantly boosted the global demand for biogas. In addition, the increasing requirement to reduce dependency on fossil fuels is creating lucrative opportunities for the utilization of biogas as fuel in vehicles. The industry is concentrated where major companies, such as Air Liquide, Shell, and, Archer Daniels Midland Company, accounted for the majority of revenue share in 2022. These companies are equipped with facilities, which are capable of manufacturing and transportation of biofuels, such as ethanol, biodiesel, and others.
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Biofuels Market Report Highlights
Transportation accounted for the largest revenue share of 71.24% in 2022. Biofuels are well suitable for transportation because they are relatively energy-dense (unlike electricity and batteries) and easy to distribute using existing infrastructure with only minor modifications (unlike hydrogen)
The North America region accounted for 33.25% revenue share in 2022. The region has been one of the front runners in implementing favorable policies and supports mechanisms for the growth of renewable energy and energy efficiency projects across the globe
Various strategic initiatives were recorded over the past few years to boost the growth of the market
For instance, in October 2022, TotalEnergies announced offering biofuel for ships in Singapore from 2023. This initiative is expected to reduce Greenhouse Gas (GHG) emissions from the shipping industry by 20%-25%
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