Biodiesel Market to Create Lucrative Opportunities for Existing Companies as Well as New Players

Increasing Energy Needs, Rising Crude Oil Prices and Growing Demand for Clean and Renewable Sources of Energy to Drive the Biodiesel Market

Biodiesel, also referred to as green diesel, is a clean renewable fuel derived from biomass. It is a long-chain mono-alkyl ester of fatty acid produced from vegetable oils or animal fats. Biodiesel is an alternative fuel having similar characteristic properties to petroleum diesel. Generally, it is used as an alternative fuel or blended together with petroleum diesel. Biodiesel can be produced from a wide range of feedstock such as vegetable oil, animal oils/fats, and used cooking oil, among others. Around the globe, biodiesel is blended with petroleum feedstock in the proportion of B2 (2% V/V), B5, B10, and B20, among others. Commercially, Biodiesel is produced by Trans-esterification or hydrotreated vegetable oils (HVO) process. The global biodiesel market has been segmented into vegetable oil, anima oil and used cooking oil (UCO). Biodiesel finds application as a fuels in automotive, industrial fuel, marine fuel, power and agriculture industries.

The global biodiesel market is estimated to be pegged at around US$ 28.9 Bn in 2018 and is projected to register a CAGR of 3.1% over the forecast period (2018–2028).

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Automobile Segment to Grow at a Moderate Pace in Terms of Volume & Value

According to the Organisation Internationale des Constructeurs d'Automobiles (OICA), automobile production has been growing at a rate of around 3% annually since 2012. Global automobile production stood at 95 Million Units in 2016, comprising both passenger and commercial vehicles and grew steadily to 97 Million Units in 2017, registering 2.4% Y-o-Y growth. Moreover, in terms of sales, diesel engine vehicles account for ~19% of the total vehicles around the globe and thus, hold a significant share in the global vehicle parc. Diesel fuel with a high cetane number provides better fuel efficiency and high reliability. However, the use of diesel fueled vehicles results in Sox, NOx and CO2 emission and other greenhouse gases, which are hazardous for the environment, ecosystem and humankind. Along with this, several countries depend on the import of crude oils to cater to the increasing demand for diesel fuels. This ultimately affects the economy of a country. Also, to evade economic losses, owing to the import of crude oil and reduce emission of pollutants, governments of developed and developing countries have mandated the blending of biodiesel with diesel fuels. Attributing to this, the demand for biodiesel is expected to increase over the forecast period. Also, growing crude oil prices, OPEC countries have channelized efforts to reduce crude oil production, which in turn expected to boost the demand for biodiesel over the forecast period. Thus, the demand for biodiesel is expected to witness steady growth, owing to the increasing energy needs, rising crude oil prices and growing demand for clean and renewable sources of energy around the globe. Moreover, the availability of feedstock and low cost are major factors supporting the growth of the biodiesel market. However, fluctuating feedstock price may hamper the growth of the biodiesel market. In the biodiesel market, it has been observed that the preference of key manufacturers has been moving towards the used of the Hydrotreated Vegetable Oil (HVO) techniques for biodiesel production as it yields valuable by-products as compared to the traditional method.

For instance, Total S.A. announced an investment of US$ 200 Mn for the transformation of its La Mède refinery, located at France, to produce biodiesel through HVO. The plant is expected to come online by 2019 with an annual production capacity of 500,000 Tonnes

In Terms of Demand, Europe Dominates the Global Biodiesel Market Whereas South Asia is Expected to Register Lucrative Growth

From a regional perspective, the biodiesel market in Europe is projected to witness relatively steady growth remain dominant in the global biodiesel market over the forecast period. This can mainly be attributed to the mandatory blending of biodiesel and the expected increase in blending percentage in the coming years. Moreover, the South Asia and Oceania Biodiesel market is expected to represent a significant incremental $ opportunity between 2018 and 2028. Growing vehicle parc and increasing biodiesel blending percentage in diesel fuels are expected to drive the demand over the forecast period. The North America biodiesel market, on the other hand, is projected to expand at a substantial CAGR, in terms of volume and value, over the forecast period.

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biodiesel market

Key Players Dominating the Global Biodiesel Market

Some of the players reported in this study on the global biodiesel market are Royal Dutch Shell plc., Neste Oyj, Archer Daniels Midland Company, Bunge Limited, Louis Dreyfus Company B.V., Wilmar International Limited, Repsol S.A., Total S.A., China Petroleum & Chemical Corp (Sinopec Corporation), Cargill Incorporated, RB Fuels, and Renewable Energy Group, Inc., among others. Biodiesel manufacturers are channelizing efforts towards increasing their production capacity and are emphasizing on specific regions to cater to regional demand. This is expected to positively impact the biodiesel market in the coming years.

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