According to Precedence Research, the global biofuels market size is predicted to surpass $201.21 billion by 2030 from $120.60 billion in 2020, growing at a CAGR of 8.3 per cent from 2021 to 2030.
The transportation fuels generated from biomass resources, such as ethanol and biomass-based diesel, are known as biofuels. These fuels are typically mixed with petroleum fuels, but they can also be used independently. In addition, advanced liquid biofuels made from biomass waste, waste fats, and oil are a potential solution for decarbonising energy sectors in industries like shipping, aviation, and freight at a low cost.
The rising demand for sustainable and reliable energy, as well as growing focus on environmentally acceptable clean energy sources, are likely to drive biofuel demand around the world. According to some research studies, biofuels can reduce greenhouse gas emissions by up to 65 per cent.
Government regulations for biofuel combining in vehicle fuels, as well as increased government support for environmentally friendly power options, will combine to increase global biofuel use and keeps the biofuels market growing at rapid pace during the projection period.
In the United States, China, and Brazil, major blending regulations that drive global demand for biofuels have been established. By the end of 2022, these countries are aiming to achieve a 15 to 27 per cent biofuels-to-conventional-fuel blend, which is likely to drive worldwide demand in their respective regions.
The report also states that, based on fuel type, the bioethanol segment accounted for the largest market share (71.3 per cent) in the global biofuels market in 2020. As bioethanol is made entirely of biological sources, it produces cleaner emissions when it is burned (carbon dioxide, steam, and heat). Plants take carbon dioxide and use it to help them grow by processing it through photosynthesis. Because of this creation and energy combustion cycle, bioethanol has the potential to be a carbon-neutral fuel, while also helping to enhance air quality by reducing carbon monoxide emissions from aging automobile engines.
Another significant advantage of bioethanol is the ease with which it can be integrated into the existing road transportation fuel system – bioethanol may be blended with conventional fuels (up to 15 per cent) without requiring engine modifications, and can be used as a substitute for gasoline in gasoline engines.
However, the method through which biofuels are made is still a cause for concern. A lot of water and oil are required for production, and substantial-scale biofuel manufacturing plants are known to produce large amounts of pollution and cause small-scale water pollution. Unless more efficient production methods are implemented, overall carbon emissions will not be significantly reduced. It also increases nitrogen oxides levels in the atmosphere, which also leads to global warming in the environment. As a result, the industrial production caused by production of biofuels is a major challenge for the growth of the biofuels market during the forecast period.