Biodiesel Market

Biodiesel Market Growth Outlook (2022-2032)

The global biodiesel market is likely to reach US$ 103.23 Billion by 2022. Furthermore, the market for biodiesel is expected to grow at a CAGR of 6.9% over the next decade, reaching US$ 201.17 Billion by 2032.

With numerous production techniques, biodiesel is a potential source of sustainable energy made from low-quality and renewable resources.

Since biodiesel fuel originates from the biodiesel feedstock crop that collects solar energy and allows it to be transformed into biodiesel feedstock oil, it gives off 220% more energy than it needs for production, transportation, and distribution.

As a sustainable and environmentally friendly alternative to fossil fuel-based diesel, biodiesel offers several advantages over traditional diesel fuel that comes from fossil fuels. With its biodegradable, renewable, and biocompatible properties, green fuels such as this can be utilized in industrial and consumer settings with minimal environmental impact.

According to Federal Environmental Protection Agency research, biodiesel emits 11 percent less carbon monoxide and 10 percent less particulate matter than conventional diesel fuel, making it a more environmentally friendly fuel. Additionally, a study conducted by the Department of Energy and Agriculture indicated that conventional fossil-fuel-derived diesel emits 78% less net CO2.

The valorization of waste streams also correlates with the circular economy, which works to reduce waste by transforming it into a useful resource. Even though biodiesel has tremendous potential as a replacement for fossil fuels, there are some significant difficulties associated with its production which still need to be addressed prior to commercialization.

As the world's largest soybean producer, the United States produces a significant share of the world's soybean crop, about 32% in total, followed by Brazil, with 28%.

The production of biodiesel is currently dominated by soybean oil, a major feedstock for the production of biodiesel (NBB). In addition to its use as a fuel to fuel compression ignition engines, biodiesel can also be blended with petro-diesel at different ratios.

Report Attributes	Details
Market Size in 2022	US$ 103.23 Billion
Projected Forecast Value (2032)	US$ 201.17 Billion
Global Growth Rate (2022-2032)	6.9% CAGR
Expected CAGR of the U.S. Market (2022-2032)	6.4%
Anticipated Growth Rate of India (2022-2032)	5.7% CAGR
Key Players	TerraVia Holdings Cargill Archer Daniels Midland Company Wilmar International Limited Bunge Limited Louis Dreyfus Royal Dutch Shell Plc. Ineos Group Mitsui Chemicals Solvay SA

Consumption Analysis of Biodiesel from 2017-2021 Vs Market Outlook for 2022-2032

Residential and industrial use of biodiesel as fuel will present lucrative opportunities for the industry

In 2021, Fact.MR, a market research company, reported that the global market for biodiesel was worth US$ 96.6 Billion. Power generation and automotive applications will drive growth in the biodiesel market. It is anticipated that new market players will be able to capitalize on the supply-demand imbalance caused by inadequate manufacturing capacity as well as a wide range of potential feedstock sources.

Considering that the price of petroleum-based products has been fluctuating in the past few years, the use of biodiesel has become an attainable alternative. A significant increase is expected in the share of biodiesel in transportation fuel over the next few years. Biodiesel is being promoted in countries such as China, U.K., U.S., Canada, India, and Vietnam in order to reduce the emissions of greenhouse gases.

Food manufacturers, fast food outlets, restaurants, and waste vegetable oil are also used to make biodiesel. The idea of growing crops specifically for the purpose of generating biofuels has enormous potential, however, current transesterification technology uses waste vegetable oil, an abundant resource with high conversion rates and little or no processing required. Based on these factors, the market is expected to grow at a CAGR of 6.9% from now until 2032, reaching US$ 201.17 Billion.

What are some of the factors that may positively impact biodiesel demand?

Growing use of biodiesel as a fuel opens up Lucrative Growth Possibilities in the Market

Growing environmental concerns and the need for energy independence are driving the biodiesel market globally. Fuels such as biodiesel can be recycled for transportation, thus making it a cleaner alternative for transportation. The domestic nature of the product also promotes market expansion by reducing dependence on petroleum imports.

As a result of government laws and tax incentives, biodiesel use is being encouraged and supported, boosting the market's growth over the forecast period. Legislation and policies enacted by government organizations have resulted in increased opportunities for exports, the development of feedstocks, and the production of products related to this field.

The biodiesel business is experiencing rapid growth and development that will transform the industry in the next few years. The fluctuating petrochemical reserves on oil rigs around the world are predicted to increase biodiesel consumption in the predicted period.

Petroleum reserves are predicted to last until 2050. The growing awareness of consumers and environmentalists about biodiesel's benefits has led to its acceptance across the globe. Biodiesel has also been favored due to its low price, limited availability, and the surging price of non-renewable sources of energy in the global market.

Regulations imposed by Governments to encourage consumption of Clean Fuels, including Biodiesel

Various subsidies are provided by the federal government to promote ethanol production. Loan guarantees, grants, and tax breaks are among the subsidies. Furthermore, the government has mandated that biofuels be blended with gasoline and diesel fuel.

Several regions of the country were required to sell oxygenated fuels under the Clean Air Act Amendments, which sparked the growth of the U.S. ethanol industry. Increasing amounts of renewable fuels, predominantly corn-based ethanol, are to be incorporated into America's fuel supplies over time as part of the Energy Policy Act of 2005. By 2007, the mandated quantities had been greatly increased by the Energy Independence and Security Act. All these factors will further fuel the growth of the market.

What factors are limiting the uptake of Biodiesel and related Products?

High competition in the feedstock is likely to impede market expansion due to insufficient agricultural land, rising oil and fat demand, and an ever-increasing population. A number of restrictions and regulations, as well as fluctuations in crude oil prices, may, however, negatively impact the market growth of biodiesel.

One major challenge that the biodiesel market faces is the high operating costs associated with biodiesel to further hamper the growth of the market. By combining biodiesel B20 blends with diesel engine oil, the use of biodiesel B20 blends can reduce performance and reduce the time for oil drains on diesel engines.

Some engine manufacturers restrict the utilization of biodiesel in specific applications to ensure that the engine does not have any adverse effects over the course of its life and that the engine is in accordance with the manufacturer's recommendations.

Comparative View of Adjacent Biodiesel Markets

Biodiesel Market :

Attributes	Biodiesel Market
CAGR (2022-2032)	6.9%
Market Value (2032)	US$ 201.17 Billion
Growth Factor	Increasing environmental concerns, energy independence, and government policies promoting biodiesel contribute to the growth of the industry.
Opportunity	The growing acceptance of biodiesel as fuel will create lucrative growth opportunities in terms of feedstock development, exports, and the green gas the industry is expected to offer opportunities.

Generator Market :

Attributes	Generator Market
CAGR (2022-2032)	5.5%
Market Value (2032)	US$ 54.9 Billion
Growth Factor	Due to the high level of production, government regulations, and an increase in investments, the demand for diesel generators of a high capacity has increased dramatically.
Opportunity	Exploration projects by major oil & gas companies have been developing LNG infrastructure, which should support the industry's expansion.

Soybean Oil Market :

Attributes	Soybean Oil Market
CAGR (2022-2032)	5.1%
Market Value (2032)	US$ 34 Billion
Growth Factor	With the growing production of biodiesel, federal biofuel requirements drove a greater percentage of soybean oils to be used as raw materials for biofuel in the domestic market.
Opportunity	Since the US soybean supply is expected to get bigger, with a slight increase in both domestic and export usage will be possible. Thus, the soybean oil market is going to be extremely competitive over the forecast period.

Which region will be most profitable for biodiesel suppliers in the future?

According to market expenditures on renewable energy sources, North America has dominated the market. Technological advancement in this region has led to the development of renewable energy sources that can be transformed into biofuels, which are predicted to be the fastest-growing energy market in the world.

In addition to the availability of live feedstocks and the government's willingness to support the growth of the North American and European biofuel industry via rebates and subsidies, the availability of alternative feedstocks is another factor that has contributed to the growth of the industry.

Currently, biodiesel is experiencing significant growth within the Asia Pacific region, with a great deal of potential for success in the future. China and India's growing biodiesel production will help drive the market. A shift in the supply of biofuel is taking place across emerging economies which are looking to promote policies that will benefit the domestic fuel market in order to increase the demand for biofuels in the market.

Biofuel production in India represents only 1% of the total global production, so the market is still considered to be limited. Additionally, the Indian government offers strong support to international players who are interested in entering the market by establishing a business in the country. It is expected that the region of Latin America will have the potential to become one of the top biodiesel feedstock exporters in the near future.

Country-wise Analysis

What factors have contributed to the steady growth of the Biodiesel Industry in the United States?

Growing R&D activities and a push to convert food waste into biodiesel will drive growth

Biodiesel are one of the world's most commonly consumed fuels, and the United States is its largest producer. The government Renewable Fuels Standard Program, environmental benefits, and ease of access have all contributed to biodiesel's growing popularity in the market. According to Fact.MR’s report, biodiesel consumption across the country is expected to surge at a 6.4% CAGR from 2022 to 2032.

The market value of biodiesels is expected to continue to grow in the U.S. with the growing demand for agricultural biodiesels. the U.S. Department of Agriculture reports that farms with 1,000 acres of land can earn $32,823 more profit from biodiesel. The biodiesel market in this country is expected to grow with additional R&D activities and added benefits that will be enticed to produce the fuel.

As a matter of fact, scientists in this country are developing new methods for making biodiesel fuel out of food waste that is being generated. For instance, to replace oil-based diesel with renewable and affordable fuel, an interdisciplinary team of scientists at WPI is exploring ways to use food waste.

It is estimated that approximately 2 tons of household food were disposed of to landfills or combustion facilities in the United States in 2018, according to the Environmental Protection Agency. In addition to contributing to climate change, food waste emits methane once it is placed in landfills.

Additionally, food waste conversion can reduce greenhouse gas emissions by 2.6% in the United States by offsetting 15.3 million tons of CO2 a year. This region has experienced significant growth in the biodiesel market because of all of these factors.

What makes biodiesel such a Significant Market in India?

Growth in the economy and demand for diesel vehicles will contribute to Market Growth

India has an enormous potential to grow its biodiesel market significantly over the next few years. As the population grows and energy consumption increases, market opportunities are expected to increase. The Indian agricultural sector has a solid base, which is likely to meet the demands for raw materials for biodiesel in the future.

According to analysts, India is projected to grow rapidly in demand for diesel-powered vehicles, which is one of the fastest-growing markets for the product. As crude oil imports become more expensive, biodiesel has emerged as a key alternative fuel for the Indian government. A CAGR of 5.7% has been anticipated for the biodiesel market in India.

The demand for biodiesel is expected to increase significantly over the next few years following the implementation of the national biofuel policy in 2019. A new energy policy is introduced by the Indian government which is all set to boost the country's overall biodiesel demand, with its focus on the promotion of cleaner fuels in the nation.

Among the major biodiesel users in India will probably be the transport sector and the railway sector. The railway sector and industries represent the largest potential market for the biofuel market in the future.

Country-wise Forecast CAGRs for the biodiesel Industry

Country	CAGR
China	5.2%
U.S.	6.4%
India	5.7%
U.K.	6%

Category-wise Insights

Which biodiesel feedstock is expected to have the greatest growth in the near future?

Rising Usage of Soybean Oil Feedstock for Biodiesel Production

Over the forecast period, the soybean oil segment is expected to experience rapid growth. Biodiesel manufacturers in the United States currently use soybean oil as their primary vegetable oil source. Profitable growth potential will be provided by this segment for biodiesel producers in the future.

A soybean oil feedstock is one of the most common feedstocks used to make biofuels in the industry today. A major driver is the low price of soybean oil, which contributes to the substantial use of soybean oil for the production of biodiesel. Since soybean oil with low linolenic (LL) content has been used for biodiesel, production has increased. LL soybean oil has a higher level of oxidative stability that facilitates the production of higher-quality biodiesel.

Since soybean oil accounted for the highest proportion of overall renewable feedstock consumption for biodiesel synthesis due to the technical knowledge of most manufacturers and the high oil yield provided by these goods, the soybean oil sector dominated the biodiesel synthesis market.

Which Biodiesel Application is expected to generate the most revenue in 2022?

Regulatory Concerns and Growing Transportation Facilities are expected to drive Market Growth

Future research indicates that fuel will become the largest application segment for biodiesel. Biodiesel fuel demand is expected to grow at a 5.2% CAGR over the forecast period. Considering the widespread use of biodiesel for fuel in a variety of domestic and household applications, fuel application is anticipated to dominate the global biodiesel market in the near future. As commercial vehicles increasingly use clean fuel to replace crude oil, the business expects to make a profit in the future.

The growing number of pollutants emitted by vehicles as a result of increasing environmental concerns and global warming has also contributed to the growth of the market for biodiesel fuels. The market for alternative fuels will continue to grow as government regulations and the demand for cleaner fuels increase.

Market Competition

Biodiesel manufacturers utilize a range of strategies to improve production processes, including launching new products and expanding credit lines. Additionally, the company seeks to expand through mergers and acquisitions, collaborations, and partnerships with existing companies and research institutions.

• Using high-tech equipment produced in Europe, Asia, Brazil, and other countries, Bolivia will construct the Biodiesel-1 Plant to reduce diesel imports and subsidies. YPFB Refining and Desmet Ballestra have signed an Order to Proceed that will enable the complex to be implemented. During the event, Bolivia's President Luis Arce Catacora participated as a keynote speaker. Raw Material Pre-treatment Units and Biodiesel Production Units will be integrated into the Biodiesel-1 Plant, and the Plant will have over 131 pieces of equipment, including 131 pieces of unique equipment designed by Desmet Ballestra, who has built over 120 biodiesel plants worldwide, as well as many in South America.
• In February 2022, SLD Pumps & Power (SLD) announced that its nationwide equipment fleet would run on biodiesel fuel. A million liters of mineral diesel will be displaced every year by this switch.

Key Segments Covered in Industry Research

• By Feedstock :

  • Soybean Oil
  • Distillers Corn Oil
  • Canola Oil
  • Yellow Grease
  • Animal Fat

• By Application :

  • Fuel
  • Agriculture
  • Power Generation
  • Others (including Transportation and Cooking)

• By Region :

  • North America
  • Europe
  • East Asia
  • South Asia
  • Oceania
  • Latin America
  • Middle East & Africa