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Biofuels are an alternative fuel derived from biomass such as plant sources including corn, sugarcane and vegetable oils. Biofuels provide the advantage of reducing greenhouse gas emissions and increasing energy security by displacing fossil fuels. They can be used directly in diesel engines or blended with gasoline in various ratios. The growing need for sustainable energy sources and carbon emission reduction is driving demand for biofuels.
The Global biofuels market is estimated to be valued at US$ 116.38 Bn in 2024 and is expected to exhibit a CAGR of 29 % over the forecast period 2024 to 2030.
Key Takeaways
Key players operating in the biofuels market are Climate Finance Partners (United States), Carbon Credit Capital (United States), ClimateCare (United Kingdom), South Pole Group (Switzerland), Climate Trust Capital (United States), Carbon Clear (United Kingdom), EcoAct (France), First Climate (Germany), ClimatePartner (Germany), Ecosphere+ (United Kingdom), Verra (United States), Gold Standard (Switzerland), Natural Capital Partners (United Kingdom), Climate Friendly (Australia), Forest Carbon (United Kingdom).
The key opportunities in the biofuels market include increasing production of advanced biofuels from non-food biomass, development of biofuel technology to increase vehicle fuel efficiency, and favorable policies to increase blending mandates.
Global expansion of the Global Biofuels Market Size is driven by growing demand in emerging economies like India and China due to rapid motorization and increasing focus on energy security and environment protection. International collaborations are also supporting global technology transfers in the biofuels sector.
Market drivers
The key driver for the biofuels market is the government support through subsidies, tax credits and mandates. Many governments provide financial incentives for biofuel production and blending to boost the market. The European Union and United States have implemented blending mandates requiring transportation fuels to contain a minimum volume of biofuels. This spurs demand and creates a stable market for biofuel producers.
PEST ANALYSIS
Political: Government regulations and policies related to increasing renewable fuel standards and incentives for biofuel production are expected to drive the market growth. Government exemptions and subsidies on biofuels like ethanol and biodiesel are boosting production.
Economic: Rising crude oil prices and growing need for sustainable and affordable alternatives for conventional petroleum fuels are encouraging investments in research and production of various types of biofuels. Demand for bio-based jet fuel is increasing from airline industry.
Social: Increasing environmental concerns related to emissions from fossil fuels and awareness about advantages of biofuels like renewable nature, domestic production capabilities are positively impacting the social acceptance of biofuels.
Technological: Advancements in the areas of feedstock production, conversion technologies like pyrolysis, gasification are helping improve efficiencies and yields while reducing costs. Research on second and third generation biofuel production using non-food feedstocks are further boosting the market growth.
GEOGRAPHICAL CONCENTRATION
The North American region currently dominates the global biofuels market in terms of value due to large scale production and consumption of ethanol as fuel additive in countries like United States and Canada. The U.S. is the world’s largest producer of ethanol fuel, mainly from corn. Brazil is another major producer, focused around sugarcane-based ethanol.
FASTEST GROWING REGION
The Asia Pacific region is expected to witness the fastest growth in the biofuels market during the forecast period. This can be attributed to the growing investments by government and private players in countries like China, India for developing domestic biofuel industries centered around feedstocks like sugarcane, cassava and certain types of algae. Supportive policies for biofuel blending targets and strong economic growth are encouraging the regional market.
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1. Source: Coherent Market Insights, Public sources, Desk research
2. We have leveraged AI tools to mine information and compile it
