Biodiesel Industry Continues Steady Expansion, Reaching Nearly USD 187 Billion by 2031

The global biodiesel market was valued at US$ 90.4 billion in 2020. It is estimated to expand at a compound annual growth rate (CAGR) of 6.9% from 2021 to 2031. By the end of 2031, the global biodiesel market size is projected to reach a value of US$ 187.6 billion.

The growing demand for renewable and cleaner sources of energy is a major factor driving the biodiesel market. Biodiesel is gaining popularity as an alternative to conventional fossil fuels, especially in automotive applications. Stringent environmental regulations aimed at curbing vehicular emissions are also boosting the adoption of biodiesel globally. Leading market players are focusing on portfolio expansion and capitalizing on lucrative opportunities arising in high-growth regions.

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Rising Adoption of Biodiesel as a Fuel Creates Lucrative Growth Prospects

Surging usage of biodiesel as a fuel in commercial vehicles and transportation is expected to propel the biodiesel industry during the forecast period. Biodiesel is a biodegradable and renewable fuel manufactured domestically from vegetable oils and animal fats. It can be produced through common batch processes, ultrasonic methods, and microwave methods. There is a rising awareness among consumers worldwide regarding the environmental issues associated with conventional fossil fuels. The growing popularity of clean and renewable energy sources is fueling the growth of the biodiesel market.

Government Initiatives to Promote Clean-burning Biofuels

Governments of various countries are supporting eco-friendly alternatives like biodiesel. For example, the U.S. government has taken initiatives to encourage biodiesel usage to reduce dependency on crude oil. Additionally, biodiesel can be utilized across diverse energy segments like electricity, transportation, heat, and power generation. These factors are anticipated to stimulate demand for biodiesel over the next decade.

Soybean Oil Feedstock Type to Dominate Market Share

The soybean oil segment currently dominates the global biodiesel market. This can be attributed to rising demand for soybean oil in biodiesel production across various applications like fuel, agriculture, and power generation. Soybean oil is widely used for cooking and holds the largest production volume globally due to favorable climatic conditions. The relatively low and stable price of soybean oil makes it an attractive feedstock for biodiesel manufacturing.

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Regional Outlook

Europe accounts for a leading share of the global biodiesel market led by large producers like Germany and France. European economies receive tax rebates for continuing biodiesel production. The U.S. is the largest biodiesel producer in North America, primarily using soybean oil. Countries in Asia Pacific are also shifting toward biodiesel with support from governments of Malaysia, Indonesia, and Thailand.

Biodiesel Industry Overview

Biodiesel is a renewable fuel produced through transesterification of raw materials such as vegetable oils, animal fats, and waste cooking oils. It can power diesel engines as a substitute for or blend with petroleum diesel. Common biodiesel feedstocks include corn oil, palm oil, canola oil, soybean oil, and jatropha oil.

As a clean and domestically produced fuel, biodiesel finds wide usage in industries like mining, power generation, automotive, rail, and marine. Many countries also promote biodiesel to reduce dependence on imported petroleum. According to estimates, the global biodiesel market will witness healthy growth during the forecast period due to rising demand for biodiesel in fuel applications.

Increase in Biodiesel Usage as Transportation Fuel

The fuel segment dominates the global biodiesel market led by increasing demand to replace crude oil-based fuels in commercial vehicles and transportation. Biodiesel offers environmental benefits such as lower greenhouse gas emissions compared to conventional diesel. Growing concerns about climate change are driving the replacement of fossil fuels with renewable biodiesel across various sectors. Government support through incentives and mandates are also boosting the adoption of biodiesel for transportation and other energy needs. Experts predict the share of biodiesel in the fuel industry will rise considerably over the next decade.

Biodiesel Market: Competition Landscape

Mitsui, Archer Daniels Midland Company, Cargill, Louis Dreyfus, Solvay SA, TerraVia Holdings, Royal Dutch Shell plc., Bunge Limited, Ineos Group, and Wilmar International Limited

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