The Flourishing Transportation Sector Continues to Influence the Growth of the Biofuels Market

The Biofuels Market size is estimated to reach US$232.6 billion by 2027, growing at a CAGR of 6.8% during the forecast period 2022-2027. The growth of the biofuels market would be highly influenced by increasing demand from the transportation sector, including automotive, aerospace and others. Biofuels are transportation fuels produced from feedstock such as starch crops, sugar crops, oilseed crops and other biomass. The surging trend for reducing GHG emissions and emphasis on biofuel production are bolstering the growth scope in the biofuel market. Energy Independence and Security Act (EISA) of 2007 implemented Biofuel blending mandates in the U.S. for transportation fuel.

With the rising emphasis on producing Biofuels and utilization in the automotive sector and demand from major industries such as power generation, marine and others across the world, the biofuels industry is expected to achieve massive growth. 

Based on the end-use industry, the Biofuels market can be segmented into Automotive, Aerospace, Power Generation, Consumer Goods, Marine and Others. The leading segment in the Biofuels industry has been evaluated to be automotive. During the forecast period 2022-2027, the automotive industry is projected to grow with a CAGR of 7.5%. This can be attributed to growth factors such as high demand for Biofuels in vehicles, growing fuel-efficient vehicle production and rising income.

According to the International Organization of Motor Vehicles Manufacturers (OICA), the global production of passenger cars increased from 55,834,456 units in 2020 to 57,054,295 units in 2021. Thus, the biofuels industry would grow significantly as a result of emerging applications of biofuels such as biomass, ethanol, biodiesel and others in automotive vehicles over the forecast period.

Based on geography, the Biofuels market can be segmented into North America, South America, Europe, APAC and ROW. According to IndustryARC's analysis, North America has emerged as the most profitable region. In 2021, the North American region held a 39.5% share of the total revenues earned by the market globally. The North American region is estimated to grow rapidly due to the established base for the transportation sector, rising emphasis on biofuel feedstock and favorable policies for renewable energy. The automotive sector is lucratively growing in North American countries, including the USA, Canada and others due to rising public transportation, demand for fuel-efficient vehicles and strict regulations for particulate emissions.  

According to Statistics Canada, around 1.6 million new vehicles were registered in Canada in 2021, marking an increase of 6.5% over 2020. With robust growth scope for biofuels in the automotive industry across North American countries, the biofuels industry would emerge significantly over the forecast period. The Biofuels market would also gain demand from the Asia-pacific region. China, India, Japan and others are emerging countries in the Biofuels industry.

Key companies holding major shares in the Biofuels market are Abengoa Bioenergy S.A., Cargill, BTG International Ltd., DuPont, Bunge Limited, Petrobras, Butamax, Pacific Ethanol Inc., Archer Daniels Midland Company and Wilmar International.