Biofuels Market Trends

Growth Drivers

• Government regulatory standards to support the expansion of the market - Government policies favoring the rapid use of biofuels are being driven by efforts to reduce carbon emissions and the decreasing availability of fossil fuels.  To reach a minimum volume of 36.0 billion gallons of biofuels by 2022, the U.S. Energy Independence and Security Act of 2007 imposed standards to blend biofuels into transportation fuel.
• Urge to find suitable feedstock - The focus of biofuel advancements primarily revolves around discovering fresh sources of raw materials for producing fuels for transportation. Traditional sources like corn and sugarcane are widely utilized in biofuel manufacturing, but there is a noticeable lack of progress in converting agricultural waste, forestry leftovers, and municipal solid waste into liquid biofuels. Finding substitute raw materials is crucial to minimize the impact on land use and ensure food and feed security. Feedstock make up 3.8% of global bioethanol production in 2022 reported by IEA.

Challenges

• Industrial pollution associated with biofuels - The growth potential of biofuels is being hindered by industrial pollution caused by biofuel production and small-scale water pollution from biofuel manufacturing plants. Industrial pollution is also a result of high levels of nitrogen oxide being released into the atmosphere. As a result of these challenges, the biofuel market is expecting a decrease in growth.
• High production cost - The production costs of biofuel are quite high. Furthermore, there is a growing strain on agricultural feedstock for example, sugarcane, corn, cassava, and other biomass, which adds pressure to the market.