Our in-depth analysis of the aviation biofuel market includes the following segments:
By Production Technology
Geographically, the aviation biofuel market is segmented into five major regions including North America, Europe, Asia Pacific, Latin America, and the Middle East & Africa region.
According to IEA, the first flight using blended biofuel flew in 2008. After that, more than 150,000 flights have used biofuels. Only five airports have regular biofuel issuance today Bergen, Brisbane, Los Angeles, Oslo, and Stockholm.
The aviation biofuel market is estimated to stand predominant in North America over the forecast period on account of the expansion of aviation biofuel production companies, growing clean energy demand, and rising carbon emission reduction measures.
According to IEA, Oil demand in 2018 rose progressively. The leading foundation of consumption growth was not China or India, but rather the United States.
The European aviation biofuels market is expected to be the second dominant region over the forecast time owing to the rigorous rules and regulations regarding carbon emission. Several policy instruments related to biofuel have also been employed by the EU. For instance, the Renewable Energy Directive (RED) has established an objective of attaining 20% gross energy consumption from renewable resources by 2020.
Aviation demand is distinctly evident in the Asia Pacific region, where growing economic prosperity is introducing new travel opportunities and tremendous opportunities are coming up in the distribution of feedstock to produce aviation biofuel.
According to Internation Energy Agency (IEA), China, India, and Indonesia make up for 40% (15 billion liters) of biofuel production growth as per the report of 2019. China already outdid the United States as the biggest crude oil importer in 2017, India’s oil demand is set to increase by 25% by 2024.
The aviation biofuel market is further classified based on region as follows:
The aviation biofuel market is expected to observe an attainable high CAGR during the forecast period, i.e., 2020-2028. The market is segmented by production technology, application, and region. Among production technology, the hydrogenated vegetable oil segment is expected to influence the overall aviation biofuel market owing to the fact that it’s the primary source of raw material for first-generation aircraft biofuel manufacturing and generation. Based on the application, the commercial aircraft segment is predicted to dominate the global market on account of the growing adaptation of biofuels instead of traditional jet fuel. CLICK TO DOWNLOAD SAMPLE REPORT
Growing efforts to decrease carbon emission
The climbing demand for biofuel and growing international trade is projected to drive the aviation biofuel market globally. European airlines, such as British Airways, Air France, and Lufthansa, in synchronization with Airbus and European aviation biofuel makers, have commenced the authorization of aviation biofuel in Europe. Additionally, the U.S. Federal government is budding as an active promoter and buyer of aviation biofuel. An inter-agency biofuel partnership has been made amongst the Department of Defense, the U.S. Department of Agriculture, and the U.S. Department of Energy to gain biofuel for the U.S. Air Force and the U.S. Navy.
An escalation in the number of aircraft will drive the aviation biofuel market
The Air-transport industry is booming. The number of passengers commuting frequently around the world is increasing due to a high preference for air travel and less time taken to travel across destinations.
Although currently, all airlines are facing a critical downfall in demand due to widespread COVID-19 pandemic, it is expected to pick up the pace gradually once the situation normalizes.
Rising demand in APAC countries
Demand for aircraft is likely to rise considerably in emerging nations of Asia-Pacific (APAC) due to upsurge in the number of middle-income customers throughout the forecast period.
Maintaining the standard specifications while producing aviation biofuel comes under strict guidelines that might put a hindrance on the global aviation biofuels market growth.
April 2020: EasyJet founder Stelios Haji-Ioannou, warned that the airline will run out of cash by August or perhaps earlier if a contract for more than 100 Airbus jets is not terminated between the two companies as already EasyJet is facing a collapse in demand due to COVID-19 pandemic.
CORSIA (Carbon Offsetting and Reduction Scheme for International Aviation) is the first global market-based measure scheme for international aviation under ICAO (International Civil Aviation Organization), United Nations. In March 2020, ICAO agreed to the terms ruling the eligibility of carbon offset programs for the initial pilot phase of CORSIA which runs from 2021-2023. These terms permit airlines to purchase CO2 offset units from six programs under CORSIA to reach its emissions reduction targets up to 2023.
February 17, 2020, Delta Airlines has become the latest airline pledging to reduce its carbon emissions by investing in aircraft renovation, sustainable jet fuel, weight reduction, and CO2 offsetting and sequestration projects
In 2023, market players might incur losses due to huge gap in currency translation followed by contracting revenues, shrinking profit margins & cost pressure on logistics and supply chain.
Controlling Inflation has become the first priority for global economies from last quarter of 2022 and to be followed in 2023. With skewed economic situations, rise in interest rate by governments to control spending and inflation, spiked oil and gas prices, high inflation, geo-political issues including U.S. & China trade war, Russia-Ukraine conflict to intensify the global economic issues.
The interest rates in the U.S. may be less sensitive in 2023 as compared to 2022; sigh of relief for businesses. Positive business sentiments, healthy business balance sheets, growth in construction spending (private construction value in 2022 stood at $1,429.2 billion, 11.7 percent (±1.0 percent) above the $1,279.5 billion spent in 2021, Residential construction in 2022 was $899.1 billion, up by 13.3 percent (±2.1 percent) from $793.7 billion in 2021, non-residential construction touched $530.1 billion, 9.1 percent (±1.0 percent) above the $485.8 billion in 2021.) showcases minimal impact of recession in the country.
Similarly, spiked spending in the European and major Asia economics including, India, China & Japan to showcase less impact on the global demand.