Biofuels Market Share & Trends Analysis, By Biofuel Type(Biodiesel, Bioethanol, Others), By Feedstock (Corn-based Biofuel, Sugarcane-based Biofuel, Others), By Application (Biofuel for Land Transport, Biofuel for Shipping, Others) & By Region Forecast, 2021-2031
Newly-released biofuels industry analysis by Fact.MR reveals that global revenue from the sales of biofuels in 2020 was US$ 134 Bn. The industry is likely to expand at a CAGR of 4.8% during 2021 – 2031. Bioethanol is expected to be the highest revenue generating segment, accounting for an absolute dollar opportunity of nearly US$ 53.6 Bn over the next ten years.
Key Points Covered in Biofuels Industry Survey:
- Market Estimates and Forecasts (2016-2031)
- Key Drivers and Restraints Shaping Market Growth
- Segment-wise, Country-wise, and Region-wise Analysis
- Competition Mapping and Benchmarking
- Market Share Analysis
- COVID-19 Impact on Sales of Biofuels and How to Navigate
- Certifications and Compliance Requirements
- Assessment of Import Price, Bulk Price, Contractual Price, and Producer / Distributor Price
- Recommendation on Key Winning Strategies
Consumption Analysis of Biofuels from 2016 to 2020 Compared to Demand Outlook for 2021 to 2031
As per the biofuels industry research by Fact.MR - a market research and competitive intelligence provider, historically, from 2016 to 2020, market value increased at around 4.3% CAGR, where revenue was largely dominated by the U.S., Brazil, Indonesia, Germany, France, and China.
Global endeavour to replace fossil fuels with biofuels for a sustainable ecosystem has led to significant increase in the production of the latter. Concerns of environmentalists and policymakers across the globe to reduce greenhouse gas pollutant emissions, fossil resource depletion, and dependence on unstable foreign suppliers are expected to further elevate production and consumption of biofuels during the forecast period.
- The biofuels market reached a valuation of US$ 134 Bn in 2020; however, global revenue was down -3.6% year-over-year owing to stalled economic activities and biofuel production amid COVID-19.
- Fact.MR estimates that biofuel revenue will grow 1.6X from 2021 to 2031, reaching nearly US$ 226 Bn by 2031.
- Revenue through bioethanol will account for over 65% share, owing to its suitability in automotive applications.
- Based on feedstock, corn-based biofuel commands over 1/4 of over biofuel revenue.
- Top 5 providers of biofuels held around 21% market share in 2020.
Why Does the Americas Continue being the Nucleus of Global Biofuel Production?
Considering the statistics of U.S. Energy Information Administration, USDA Foreign Agricultural Service, Renewable Fuels Association, and Fact.MR secondary research, total estimated production of biofuels in the U.S. and Brazil in 2020 was over 9.5 Bn gallons.
While the two countries account for over 3/4 of global biofuel production, they also account for nearly 50% of global biofuel demand. Fuel ethanol and biodiesel in both countries are blended with fossil-based transportation fuels. In Brazil, biofuel for automotive directly competes with gasoline.
How Have Fuel Policy Formulators Maintained a Non-deviated Demand Growth for Biofuels?
In certain countries, biofuels demand have been accelerating due to the fuel policymakers’ support. For instance, RenovaBio program in Brazil will necessitate the fuel distributors to obtain emission reduction certificate. Secondly, the competitive prices of gasoline and bioethanol in the country have been driving fuel demand in favour of biofuels. On the other hand, in the U.S., availability of blender’s tax credit has reduced refiners’ burden of competitiveness for biodiesel blending.
Supply of Sugarcane and Corn – What is the Equation between Food and Biofuel at the Supply Level
Corn and sugarcane account for over 50% of the required feedstocks for biofuel production. While they are being used in the production of biofuels, their prime utility remains in the production of food products in most countries. Hence, providers of sugarcane and corn need to strike a balance between the two commodities.
In Brazil, while sugarcane is primarily used for biofuel production, corn production has also grown significantly. As compared to 2014, when corn production was under 80 Mn tons in Brazil, in 2020, it crossed the 100 Mn tons mark.
Also, the proportion of corn used in ethanol production has increased significantly over the years. As compared to 44 Mn liters of corn ethanol production in 2014, the country produced 2,500 Mn liters of corn ethanol in 2020, thus reducing dependence on sugarcane.
While consumption of corn in ethanol has been growing, production of corn has also increased substantially over the years, thus justifying the balance of supply in food and biofuel sub-sectors.
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What Could be the Possible Roadblocks for Biofuel Production and Consumption Over the Coming Years?
Sugarcane-based biofuel generally has good impression on the environmentalist; however, a low degree concern also exists with the issue of deforestation.
With the zeal of increasing the volume of sugarcane plantation to meet both, food and fuel demand, certain areas around the globe are being deforested. It is becoming an agenda of the increased carbon debt, thus raising some eyebrows against the expansion of sugarcane cultivation. Though, if pasture lands are managed as cropland, this issue can be addressed in the mid-to-long term.
Which Region is Projected to Offer the Largest Opportunity for Biofuel Suppliers?
With an absolute dollar opportunity of US$ 22.7 Bn, North America will remain the most lucrative region for biofuel demand. North America has sufficient harvest land for sugarcane, corn, as well as soybean production. This makes it a self-sufficient country in terms of feedstock for biofuels.
Transportation, especially trucks, use significant use of biodiesel in the U.S., which further makes it a fertile ground for biofuel sales.
China Rolling Up its Sleeves for Biofuels Consumption – What to Expect Over the Coming Years?
In China, bioethanol is produced from corn and cassava. According to the International Energy Agency (IEA), ethanol consumption accounts for nearly 2% of its fuel demand; however, by 2024, it is expected to rise to more than triple.
Although China has already taken a strong stance to curb emissions through the electrification of its vehicles, its focus on biofuels can provide another alternative to users and policymakers alike.
How is the Biofuel Drive in Indonesia Faring Against its Ambition for Electric Vehicles?
Indonesia is known for its significant investments in biofuel infrastructure to meet its alternative fuel goal. The Institute for Essential Services Reform (IESR), also known as the Indonesian think tank, has projected biofuel demand in the country to reach 190 Mn tons by 2050.
At the same time, the government has also shown its ambition for vehicular electrification. With this, the Indonesian Chambers of Commerce and Industry (KADIN) predicts the country to become the world’s largest producer of lithium batteries in the coming years.
This makes a tweak in country’s objective of achieving 93 Mn tons of biofuel demand by 2050 if the market for electric vehicles rises greater than expectations.
Research in Progress in Automotive Space – Should Biofuel Providers Expect Better?
In July 2021, Volkswagen announced R&D for biofuel-based engines targeted at emerging markets. The research is likely to be mostly carried out in Brazil in conjunction with the government, universities, and agribusinesses. With this, the company also plans to phase out its combustion vehicle production by 2035.
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Which Biofuel Accounts for a Higher Revenue Share?
Bioethanol accounted for over 65% revenue in the market in 2020. Ethanol, being a renewable fuel, can be produced from several plant materials known as biomass. As a blending agent for gasoline, ethanol is used to increase octane in vehicles and reduce carbon monoxide and smog-mixed emissions.
Which Feedstock is Preferred for Manufacturing Biofuel?
Corn accounted for over 30% of biofuel feedstock used globally. It is a highly available feedstock for the production of biofuel. However, requirement of sugarcane- and vegetable oil-based biofuels has also been increasing at a rapid pace.
How Has COVID-19 Impacted Revenue Generation from Biofuel?
Sales of biofuel witnessed a year-on-year decline of -3.6% in 2020, owing to postponement of investments in fuel amid the COVID-19 pandemic. However, governments across biofuel producing countries have been offering assistance with line of credit for industry recovery.
The market in North America was hit the hardest and witnessed a decline of -4.7% in 2020. However, going ahead, the market is expected to witness positive growth.
According to Fact.MR’s market research analysis, innovations as well as product development have been prominent developments related to biofuel in recent years.
- In July 2021, Alpha Biofuels, a Singapore based company announced that it has blended its biofuel at its Tuas plant, wherein, it was converted from cooking oil that it had collected from food & beverage manufacturers. In the same month, it is also used as trial in the vessel The Frontier Jacaranda, which sailed on 93% standard fuel and 7% biofuel.
Similarly, recent developments related to companies offering biofuel have been tracked by the team at Fact.MR, which are available in the full report.
Biofuels Market Report Scope
Historical Data Available for
|Gallons for Volume and US$ Mn for Value|
Key Regions Covered
Key Countries Covered
Key Market Segments Covered
Key Companies Profiled
Available upon Request
Market Segments Covered in Biofuels Industry Research
By Biofuel Type
- Corn-based Biofuel
- Sugarcane-based Biofuel
- Vegetable Oil-based Biofuel
- Other Feedstock-based Biofuel
- Biofuel for Land Transport
- Biofuel for Shipping
- Biofuel for Other Applications
- FAQs -
The global biofuels market is worth US$ 133.5 Bn at present.
Value of biofuels is projected to increase at a CAGR of around 4.8% during 2021 – 2031.
Sales of biofuels increased at a CAGR of around 4.3% from 2016 to 2020.
Growing interest of shipping companies towards usage of biofuels has been one of the concurrent trends.
Global biofuel revenue is being driven by factors such as consistent supply of feedstock and interest of fuel policymakers in alternative fuels.
Top 5 manufacturers of biofuels account for around 21% share in the market.
Top 5 countries driving demand for biofuel are the U.S., Brazil, Indonesia, Germany, and China.
The European market for biofuels is projected to expand at a CAGR of around 3.8% during 2021 – 2031.
While the market in China is expected to grow at nearly 6%, demand in Indonesia is projected to register a CAGR of nearly 7% during 2021 - 2031.
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Is the market research conducted by Fact.MR?
Yes, the report has been compiled by expert analysts of Fact.MR, through a combination of primary and secondary research. To know more about how the research was conducted, you can speak to a research analyst.
What research methodology is followed by Fact.MR?
Fact.MR follows a methodology that encompasses the demand-side assessment of the market, and triangulates the same through a supply-side analysis. This methodology is based on the use of standard market structure, methods, and definitions.
What are the sources of secondary research?
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