The Biofuels Market is estimated to be valued at US$ 101.02 Bn in 2023 and is expected to exhibit a CAGR of 10% over the forecast period 2023-2030, as highlighted in a new report published by Coherent Market Insights.
Market Overview:
The biofuels market comprises fuels produced from biomass or waste. Biofuels arerenewable and cleaner sources of energy as compared to conventional fossil fuels. They provide an alternative to fossil transport fuels and help mitigate greenhouse gas emissions from the transport sector. The various types of biofuels produced include biodiesel, bioethanol, biogas and others. With growing concerns regarding the depletion of fossil fuel reserves and environmental pollution, biofuels are gaining prominence globally.
Market Key Trends:
Advanced biofuels like cellulosic ethanol and drop-in fuels like renewable diesel and sustainable aviation fuel are finding increased usage. These second-generation biofuels are made from non-food biomass like agricultural residues and municipal solid waste rather than starch or sugar-based crops. Their production does not require dedicated farmland and they have higher greenhouse gas emission reduction benefits as compared to conventional biofuels. Government policies and regulations especially in Europe and Americas are promoting research and development as well as commercial production of advanced biofuels. Major oil and gas companies are investing heavily in developing advanced biofuel technologies to decarbonize their business operations and meet sustainability targets. This growing focus on production and usage of advanced biofuels from sustainably sourced feedstocks is expected to drive significant growth in the global biofuels market over the forecast period.
Porter’s Analysis
Threat of new entrants: The threat of new entrants is medium as the biofuels market requires high capital investment for setting up production facilities and gaining brand recognition in the market.
Bargaining power of buyers: The bargaining power of buyers is high due to the presence of various biofuel producers providing substitutable products to choose from.
Bargaining power of suppliers: The bargaining power of suppliers is medium as some key raw materials used for biofuel production such as sugarcane and corn have limited producers.
Threat of new substitutes: The threat of new substitutes is medium as technologies for electric vehicles and hydrogen fuels are emerging.
Competitive rivalry: is high in the biofuels market due to the presence of established global players.
SWOT Analysis
Strength: Biofuels are renewable and environment-friendly alternative to fossil fuels. They help reduce dependence on crude oil imports.
Weakness: High production and infrastructure costs. Availability of raw materials is dependent on agricultural output which is vulnerable to climate changes.
Opportunity: Government policies and regulations supportive of biofuel usage provide new opportunities. Expanding market for electric vehicles and hydrogen fuel cell cars also increases demand for biofuels.
Threats: Changing consumer preferences towards electric vehicles and hydrogen fuels pose a threat. Fluctuations in agricultural commodity prices impact biofuel production costs.
Key Takeaways
The Global Biofuels Market Demand is expected to witness high growth, exhibiting CAGR of 10.% over the forecast period, due to increasing demand for cleaner and renewable transportation fuels. The market size for biofuels in 2023 is estimated to be US$ 101.02 Bn. Southeast Asian countries and Brazil are projected to dominate bioethanol production due to abundant availability of sugarcane. The European region is forecast to expand rapidly in biodiesel demand from nations phasing out fossil fuel vehicles.
Regional analysis: The Southeast Asia region has emerged as the fastest growing market for biofuels owing to large production of bioethanol in nations such as Thailand, Indonesia and Malaysia. Brazil is the leading producer as well as exporter of bioethanol globally, supported by widespread sugarcane cultivation. The EU markets are expected to offer lucrative opportunities for biodiesel producers with the implementation of various mandates for blending biofuels in transportation fuels.
Key players: Key players operating in the biofuels market are TotalEnergies, Cepsa, Honeywell, Neste, Unilever plc and Starbucks Corporation, Trinity Organics, Chevron, and BoxLNG Pvt. Ltd. Neste is the world's largest producer of renewable diesel made from waste and residue materials. TotalEnergies is investing significantly to expand its production capacities across Europe and Asia.
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