Biodiesel Market - Forecast(2024 - 2030)

The Biodiesel Market size is estimated at USD 34.66 billion in 2023, and is expected to reach USD 50.22 billion by 2030, growing at a CAGR of 7.70% during the forecast period 2024-2030. There are four principal methods to make biodiesel, direct use, and blending, micro emulsions, thermal cracking (pyrolysis) and transesterification, which changes oil and fats into fatty acid methyl esters. Biodiesel is composed of renewable feedstocks such as vegetable oils, animal fats. Biodiesel produced from Animal Tallow tends to crystallize out at much higher temperatures than biodiesel derived from plant oils. Biodiesel is capable to reduce exhaust emissions as compared to petroleum diesel fuel. It is majorly used in Automotive, Aerospace, Industrial, Marine, and Agriculture. The key factors for the development of this market are reducing storage concerns with stability and transportation issues with the great cost of delivered fuel compared to fossil fuels, it can decrease the ecological nuisances such as global warming, the greenhouse effect, and pollution. During the projected period, the transportation sector is expected to take the forefront in the market, driven by the growing need for sustainable fuels like biodiesel to mitigate carbon emissions. Heightened environmental consciousness among individuals is contributing to this trend, spurred by concerns over air pollution's detrimental effects on respiratory health and cardiovascular well-being. Biodiesel, a renewable alternative to traditional diesel, is seamlessly integrated into current diesel engines without requiring any modifications, thus bolstering its appeal in the transportation segment.

The report: “Biodiesel Market – Forecast (2024-2030)”, by IndustryARC, covers an in-depth analysis of the following segments of the Biodiesel Market.

By Blend: B5 (up to 5% biodiesel), B20 (6% to 20% biodiesel), B100 (pure biodiesel)

By Feedstock: Vegetable Oils, Animal Fats, Short Chain Alcohols, Others

By Application: Transportation, Energy Generation, Lubricants, Generators, Others

By End-Use Industry: Automotive, Electrical and Electronics, Agriculture, Marine, Aerospace, Energy, Others

By Geography: By Geography: North America (US, Canada and Mexico), Europe (UK, France, Germany, Italy, Spain, Russia, Netherlands, Belgium, and Rest of Europe), APAC (China, Japan, India, South Korea, Australia and New Zealand, Indonesia, Taiwan, Malaysia and Rest of APAC), South America (Brazil, Argentina, Colombia, Chile, Rest of South America), and RoW (Middle East and Africa).

• Asia Pacific dominates the Biodiesel Market owing to a rapid increase in the Automotive and Aerospace sector.

• The market drivers and restraints have been assessed to understand their impact on the forecast period.

• The report further identifies the key opportunities for growth while also detailing the key challenges and possible threats.

• The other key areas of focus include the various applications and end-use industry in Biodiesel Market and their specific segmented revenue.

• Due to the COVID-19 pandemic, most of the countries have gone under temporary shutdown, due to which operations of Biodiesel related industries have been negatively affected, thus hampering the growth of the market.

B5 (up to 5% biodiesel) held the largest share of 48% in the Biodiesel Market in 2023. B5 and B20 are frequent blends because it signifies a decent balance of cost, emissions, cold-weather performance, materials compatibility, and competence to act as a solvent. Most biodiesel users purchase B20 or lower blends from their normal fuel suppliers or from biodiesel marketers. B20 and B5 are ASTM-approved for safe function in any compression-ignition engine originated to be operated on petroleum diesel. This can include light-duty and heavy-duty diesel cars and trucks, tractors, boats, and electrical generators. Biodiesel offers more greenhouse gas benefits than conventional diesel fuel. The emissions benefit is roughly commensurate with the blend level, that is, B20 would have 20% of the emissions reduction benefit of B100. Currently, the ethanol blending percentage in petrol is around 2.0% and the biodiesel blending percentage in diesel is less than 0.1%. As an indicative target, the government has approved 20% blending of ethanol in petrol and 5% blending of biodiesel in diesel is proposed by 2030. Additionally, on World Biofuel Day, the Food Safety and Standards Authority of India (FSSAI) launched RUCO – Repurpose Used Cooking Oil, an ecosystem that will enable the collection and conversion of used cooking oil to biodiesel.

The United States is one of the significant consumers of biodiesel. Some local, state, and federal government agencies use biodiesel blends (B20) with fleets of school and transit buses, snowplows, garbage trucks, mail trucks, and military vehicles. Fuelling stations that sell biodiesel blends of B20 or higher to the public are available in almost every state.

The vegetable oils held the largest share of 98% of the Biodiesel market. Vegetable oils such as rapeseed oil, soybean oil, and palm oil account for the largest share in the production of biodiesel. The fuel is useful to the environment as it lowers the effect of greenhouse gas by releasing lower Volatile Organic Compound (VOC) substances as compared to fossil diesel. The feedstock used in a particular country depends on the accessibility of crops in that country. For instance, rapeseed oil is presently the most popular feedstock used in biodiesel production, followed by soybean oil. Rapeseed oil is commonly used in many European countries, whereas soybean oil is consumed in the U.S and Coconut oil and palm oil is used in Malaysia and Indonesia. 

The vegetable oil segment accounted for the largest share of more than 97.00% of the global revenue. However, raw material selection varies by region, based on the availability and feedstock cost. Palm oil is expected to be a major feedstock for the market and has been widely used in the production of biodiesel in countries, such as Indonesia, Thailand, Germany, France, and Colombia. vegetable oils, including UCO and rapeseed, held a notable share in the sector, representing over 17% of the overall feedstock demand. The primary markets for UCO-derived biodiesel in the Asia Pacific region, namely China and India, are anticipated to be pivotal. Nonetheless, manufacturers of UCOME (UCO-based biodiesel) in these areas have expressed apprehensions regarding product availability, which has dampened growth prospects

Transportation held the largest share of 52% in the Biodiesel Market in 2023. The scarcity of petroleum supplies will mark renewable energy resources further attractive. The most practical way to encounter this growing demand is by utilizing alternative fuels. Biodiesel is the top candidate for diesel fuels in diesel engines. The major advantage that biodiesel has over gasoline and petroleum diesel is its environmental friendliness. Biodiesel burns parallel to petroleum diesel as it matters regulated pollutants. On the other hand, biodiesel undoubtedly has improved efficiency than gasoline. One such fuel for compression-ignition engines that show great ability is biodiesel. Diesel fuel can also be replaced by biodiesel made from vegetable oils. Biodiesel is now mainly being produced from soybean, rapeseed, and palm oils.

In January 2023, the US Department of Energy (DOE) unveiled plans to allocate $118 million across 17 initiatives aimed at expediting the advancement of sustainable biofuels to meet the nation's transportation and manufacturing needs. These chosen projects are geared towards enhancing the domestic production of biofuels and bioproducts by advancing biorefinery development stages from pre-pilot to demonstration, thereby offering sustainable fuel options that reduce emissions linked with fossil fuels.

Automotive dominates the Biodiesel Market growing at a CAGR of 5.2%. The escalating demands for biodiesel in the automotive industry are increasing due to the extreme pollution caused by automobile pollutants, which are the outcomes of petrol or diesel-based automobiles. As an alternative similar to gasoline and fossil diesel, biodiesel is an advanced form of biofuel. It is biodegradable, non-toxic, and has reduced exhaust emissions as compared to petroleum diesel fuel. Also, the lack of sulfur in 100% biodiesel extends the life of catalytic converters, and also the lubricating property of the biodiesel may lengthen the lifetime of engines. It is the only alternate fuel, which has been approved by the Environment Protection Agency (EPA). It has also passed every Health – Effects Test of the Clean Air Act and meets the necessities of the California Air Resources Board (CARB). Expanding demand for biodiesel to substitute traditional fossil fuel in automotive and power generation applications is likely to hustle industry growth.

Asia Pacific region held the largest share in the Biodiesel Market in 2023 up to 42% followed by North America and Europe. The Asia Pacific is likely to witness rapid growth due to uprising industrialization and considerable escalation in liquid fuel demand in the transport and power sectors in emerging countries as Indonesia followed by China, Thailand, India, and Malaysia. According to the ERIA report, the total demands of the ASEAN and East Asian countries will reach nearly 37 million tons of biodiesel by 2035. Moreover, the presence of expertise, progressive technologies, and equipment encouraged exploration and production activities are the foremost factors supporting the regional biodiesel market growth forecast period, although, North America has the biggest market for Biodiesels. As petroleum includes refined petroleum, crude oil, hydrocarbon gas liquids products such as gasoline and diesel fuel, and biofuels. The market is extremely fragmented due to the manifestation of various suppliers. However, the demand-supply breach owing to insufficient production capacities and widespread possibility for R&D in the feedstock selection for the product manufacturing is anticipated to open opportunities for fresh industry playersThe Asia Pacific region is forecasted to experience a notable Compound Annual Growth Rate from 2024 to 2030. Among these, Thailand is poised to emerge as one of the swiftest-growing markets, spurred by the escalating demand for diesel-powered vehicles in the area. With Malaysia and Indonesia collectively contributing over 80% of palm oil production, there exists a substantial opportunity for biodiesel manufacturing.

Anticipated production upticks are anticipated to drive market expansion throughout the forecast period. However, the dual usage of palm oil in both the food industry and biodiesel production could potentially impede market growth. Nevertheless, governmental initiatives aimed at promoting eco-friendly fuels to mitigate pollution and lessen dependence on crude oil are expected to fuel market growth in the coming years.

 

Biodiesel is biodegradable and non-toxic and, most importantly, it is free of aromatics, and sulfur compounds. It releases lower greenhouse gases and air pollutants, downgrades toxic carbon-based emissions, and can be expended in nearly all diesel engines. The rising concern considering greenhouse gas emissions over the use of fossil fuels is influencing the growth of the biodiesel market. It lowers the emission of greenhouse gases by up to 50% as compared to petroleum diesel and has low toxic and carcinogenic aromatic carbon content. The manufacture of biodiesel by numerous countries has prevented their dependence on foreign oil reserves, as it is domestically produced, and can be consumed in any diesel engine with little or no alterations to the engine or the fuel system. Due to the fluctuating prices of petroleum-based products, biodiesel is becoming a gradually affordable option.

The aviation sector is one of the biggest contributors to greenhouse gases in the world. The growth of biodiesel for jet aircraft can decrease emissions significantly compared to fossil-based jet fuel. Aviation in current years has reported for about 15% of global fuel intake for transport. Numerous airlines, aircraft manufacturers, and industry associations have established intended targets to attain carbon-neutral development by 2023 and halve emissions by 2030. Therefore, Biofuels for Aviation is one of several briefs from the International Renewable Energy Agency (IRENA) to emphasize on renewable-based transport.

Technip Energies received a contract from TotalEnergies to produce Sustainable Aviation Fuel (SAF) at the Grandpuits platform in France. The contract covers the EPC assistance for converting the refinery into a zero-crude platform focused on SAF. This facility can produce around 210,000 metric tons per year.

Biodiesel fuel blends have the potential to compromise the performance of diesel engine oil, posing a critical concern. Understanding the complete impact of biodiesel blends on sophisticated emission control systems is paramount. Their utilization can lead to a deterioration in diesel engine oil performance, affecting oil change intervals. Various factors regarding fuel compatibility must be carefully evaluated when incorporating biodiesel into specific engines. Predictably, the influence of biodiesel on engines and post-treatment systems varies based on the blend level utilized. Although the most pronounced effects typically arise with pure B100 or high-level blends, intermediate blends are particularly susceptible to fuel insolubility and filter blockages. Consequently, the utilization of biodiesel in many engine models is constrained by the policies of engine manufacturers to ensure sustained performance throughout the engine's lifespan. 

Biodiesel is made using vegetable-based products and as a result, it must be stored at a suitable temperature. If it's left unattended for excessively long in a warm storage tank, it can turn mold. On the contrary, if it is stored at temperatures that are too cold, it could thicken and become problematic to dispense Another concern are the difficulties caused by higher lubricity when transitioning from existing systems to biodiesel. While high lubricity helps prevent premature fuel system wear and tear, it can release deposits on tank walls and pipes, causing fuel filter clogs. The EPA recommends diesel vehicle owners change fuel filters after the first tank of fuel. Biodiesel's performance is worse than petroleum diesel in cold conditions.

Biofuel feedstocks can have equally direct and indirect effects on food sources. If biofuels are generated from feedstocks that would have been used for foodstuff, then biofuels immediately cut down possible food supplies. This reduction arises even if feedstock price upsurges result in an expansion of supply because the expanded feedstock source will typically decrease the supply of other food crops.

Technology launches, acquisitions and R&D activities are key strategies adopted by players in the Window Films Market. Major players in the Biodiesel market are Archer Daniels Midland Company, Bangchak Corporation Public Company Limited, Wilmar International Ltd , DuPont, Deerfield Energy, Crimson Renewable Energy, China Biodiesel International Holding, Diversified Energy Corporation, XL Renewables, Blue Marble Energy Corp.