Biodiesel: Global Market Scenario, Trends, Opportunity, Growth and Forecast, 2018-2028

Market Definition

Long-chain alkyl (methyl, ethyl, or propyl) esters are used to make biodiesel, a type of biofuel that is produced from vegetable oil, animal fats, or used cooking oil. Ethanol, biodiesel, green diesel, and biogas are a few examples of popular biofuels. Given that they are created from organic materials or waste, all types of biofuel are regarded as renewable sources of energy. Because they significantly lower carbon dioxide emissions, biofuels are becoming more and more popular.

Market Insights

The projection period is expected to see significant growth for the worldwide biodiesel market, with a CAGR of 6.5% from 2021 to 2028. Global biodiesel market stood at $33.8 billion in 2020. This market is anticipated to be strongly influenced by elements including strict government regulations combined with government incentives, energy security, and the desire to lower transportation-related greenhouse gas emissions. Additionally, the market will be further boosted by new company entry and expanding finance.

Vegetable oil definitely dominated the industry in 2020, accounting for 87.5% of the feedstock market. However, animal fat will have faster growth and an increase in market share, due to a number of factors including ease of availability and low cost. Some feedstocks for vegetable oils will expand rapidly. Because they are readily available and inexpensive, used cooking oils will be one of the sub-segments with the fastest growth.

According to end use classification, the primary application for biodiesel is as a fuel, with power generation coming in far behind. The largest market for gasoline is anticipated to be the one for vehicle fuel. Although the market for aviation fuel is currently small, overall growth is anticipated to be modest. Strong increase is anticipated in several locations, particularly North America and Western Europe, for the aviation fuel sub-segment.

Across all regions, the need for automotive fuel will increase significantly, and BCC Research anticipates that in the upcoming years, this sub-segment will be the main source of demand for biodiesel. Other renewable energy sources like hydrogen and electric vehicles (EV) will compete with biodiesel to some extent, but their use is restricted and the infrastructure that exists today in many developing countries is insufficient to handle EV and hydrogen cell-powered vehicles. Therefore, it is not anticipated that hydrogen cell and EV will present a significant threat to the automotive sector of the biodiesel market, at least not anytime soon. In some places, the power generation industry will experience rapid expansion, which will accelerate its overall growth rate.

Geographically, Europe is the largest biodiesel consumer, mostly as a result of supportive governmental policies and a developed biofuel sector. North America is likewise a significant market for biodiesel demand. But in the upcoming years, APAC and South America are anticipated to experience the fastest increase. South America and APAC have both historically been export-oriented regions. They were primarily biodiesel or feedstock exporters and have considerable biodiesel feedstock (palm oil for APAC and soybean oil for South America). However, governments in these areas are shifting their priorities in order to boost domestic consumption. Due to this, biodiesel is now in high demand throughout a number of growing economies.

Market Dynamics: Drivers

Government Incentives and Initiatives

A variety of incentives provided by national governments, coupled with government initiatives, is one of the most significant elements fueling the expansion of the biodiesel market internationally. Governments all over the world are providing incentives to automakers, end users (those who fill up their trucks, cars, and other vehicles with biodiesel), producers of biodiesel, and distributors of the fuel. Government incentives are in place in major biodiesel-consuming nations like the United States, Canada, Germany, France, the United Kingdom, Malaysia, Indonesia, and Brazil to encourage the use of biodiesels. A few nations, such Malaysia and Indonesia, are also promoting the use of biodiesel to bolster native feedstock supply. Overall, it is anticipated that government backing will continue to be a key factor in market growth. In the upcoming years, it is anticipated that this driver will become increasingly important.

Market Dynamics: Challenges

Strong Growth of the HVO Market

The greater expansion of HVO (green diesel or renewable diesel) in some locations is one of the major issues that has started to upset the biodiesel business recently. HVO is becoming more popular in some regions since it is thought to be the next-generation biofuel and has several advantages over biodiesel. Additionally, a variety of new players are entering the HVO industry, and venture capital investment is strong, all of which are contributing to the market’s expansion. Companies with a presence in the renewable diesel market include Neste Oyj, Renewable Energy Group, Honeywell, and Valero. These businesses are investing heavily and acting quickly to expand the market for renewable diesel. Going forward, the renewable diesel segment is expected to present an even bigger challenge to the growth of the biodiesel market, including in emerging regions. Although renewable diesel is unlikely to completely wipeout biodiesel from the market, BCC Research expects renewable diesel market growth to result in the biodiesel segment losing market share in the overall biofuel market.

Market Segmentation

• Based on Feedstock, the Global Biodiesel market is segmented into
  • Vegetable Oil
  • Animal Fat
  • Others
• Based on End User, the Global Biodiesel market is segmented into
  • Fuel
  • Power Generation
  • Others
• Based on Geography, the Global Biodiesel market is segmented into
  • Asia-Pacific
  • North America
  • Europe
  • Latin America
  • Middle East & Africa
• All market revenue has been given in US Dollar.

Historical Year: 2018-2019

Base Year: 2020

Estimated: 2021

Forecast- 2022-2028

Key Questions this Study will Answer

• What are the key overall market statistics or market estimates (Market Overview, Market Size- By Value, Market Size-By Volume, Forecast Numbers, Market Segmentation, Market Shares) of Global Biodiesel Market?
• What is the region wise industry size, growth drivers and challenges key market trends?
• What are the key innovations, opportunities, current and future trends and regulations in the Global Biodiesel Market?
• Who are the key competitors, what are their key strength and weakness and how they perform in Global Biodiesel Market based on competitive benchmarking matrix?
• What are the key results derived from the market surveys conducted during Global Biodiesel Market study?