Biofuel Additives Market Size Forecast to Reach $12.5 Billion by 2026

October 28 22:42 2021
Biofuel Additives Market Size Forecast to Reach $12.5 Billion by 2026
Biofuel Additives Market
Growing Demand for Clean & Efficient Fuel Among End-users Is Driving the Market Growth for Biofuel and Further Driving the Biofuel Additives Market

Biofuel Additives Market size is forecast to reach US$12.5 billion by 2026, after growing at a CAGR of 12.9% during 2021-2026. Biofuels are developed from lignocellulosic feedstock. Biofuel additives are specialty chemicals that are used to enhance biofuel properties. Biofuel additives improve engine performance and also reduce brake-specific fuel consumption (BSFC). Biofuel additives play a crucial role in addressing different issues such as low oxidation stability, high foaming tendency, and corrosion in IC engines. Biodiesel and bioethanol are the commonly used biofuels among end use-industries. The growing demand for clean & efficient fuel among end-users is driving the market growth for biofuel and further driving the market for biofuel additives. The growing automotive sectors and increasing transportation activities globally are the major factors supporting the market growth between 2021-2026. The various government-supporting regulatory policies and tax incentives across developed nations are driving the market growth. The depletion of fossil fuels along with the growing demand for alternatives also boosting the market demand. However, large-scale utilization of food crops for manufacturing biofuels may lead to food scarcity globally. The high price of biofuels may hamper the market growth during the forecast period.

COVID-19 Impact

The COVID-19 pandemic is impacting different industries; one of the few industries that were largely hit to some extent was the fuel industry. The biofuel industry impacted very badly due to the sharp decline in fuel consumption globally. The global lockdown has impacted the transportation system which further impacted the supply chain operations. Transportation fuel demand has decreased from March 2020 due to reduced economic activity and lockdown to restrict the spread of coronavirus disease. However, the biofuel industry also faced problems related to lack of workforce and lack of raw materials supply.

Biofuel Additives Market Segment Analysis – By Polymer Type

The cetane improvers segments accounted for approximately 12% of the market share in 2020 and are estimated to grow at a significant CAGR during the forecast period. Cetane improvers are additives added to diesel fuel at low concentrations to boost the cetane number of the blend. Octyl Nitrate (EHN or 2-Ethylhexyl nitrate) is one of the commonly used cetane improvers among biofuel producers. The cetane improver offers various advantages such as easy ignition of the fuel, smooth engine operation, lowering smoke emission, and wear reduction among others. The growing adoption of efficient fuels in the transportation industry is driving the market for the cetane improvers segment. The demulsifiers segment is expected to grow at a high CAGR of 13.2% during the forecast period. Demulsifiers are used for treating petroleum crude oils and biofuels to desalted and heater treated processing.

Biofuel Additives Market Segment Analysis – By Biofuel Type

The bioethanol fuel segment accounted for more than 40% of the market share in 2020 and is estimated to grow significantly during the forecast period. Bioethanol is an alternative transportation fuel produced from sugar and starch. The increasing demand for bioethanol as automobile fuel is one of the major factors driving the market growth. Bioethanol is used in petrol engines as an alternative to gasoline. Most of the existing petrol engines operate on blends of up to 15% bioethanol with petroleum. According to the data published by U.S. Energy Information Administration, the United States produced more than 17.3 billion (gal/y) of fuel ethanol between January 2019-January-2020.

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Biofuel Additives Market Segment Analysis – By Application

The gasoline fuel additives segment accounted for more than 25% of the market share in 2020 and is estimated to grow significantly during the forecast period. Gasoline is one of the majorly used U.S. transpiration fuels. The fuel is used in cars, recreational vehicles & boats, small aircraft, equipment, electricity generators, and others. According to the data published by EIA, in 2019 the total gasoline consumption accounted for 58% of the total transportation sector in the United States. According to the data published by the Oxford Institute for energy studies, Natural gas accounted for 10% of China’s total primary energy consumption in 2020.

Biofuel Additives Market Segment Analysis – By Geography

North America region held the largest share in the Biofuel Additives market in 2020 up to 32%, owing to the presence of a large amount of feedstock for biofuel production. The presence of well-developed nations such as the U.S. and Canada are driving the market growth in the region. The U.S. is one of the leading countries involved in the production and utilization of biofuels globally. The USA government is supporting fuel producers in developing alternative fuels to replace fossil fuels in the country. The presence of leading biofuel companies such as Cargill, Bunge Limited, Archer Daniels Midland Company and others are also supporting the market growth in the United States. The Asia Pacific region is expected to register a high growth rate during the forecast period (2021-2026). The rapid growth in population, and growing automotive industry, are some of the major factors driving the regional market. Abundant raw material sources and agriculture activities are supporting the regional demand.

Biofuel Additives Market Drivers:

Growing consumption of biofuels in the transportation industry

Transportation is one of the key industries globally. Biofuels for transport are part of important strategies to improve fuel security, and climate changes. The transportation industry includes air, rail, marine, truck, transit, and ground. According to EIA, the transporting sector consumed about 26% of total U.S. energy in 2020. Biomass-based diesel/distillates occupied approximately 5% of total U.S. transportation energy. According to European Commission, the transport industry directly employs around 10 million people and accounts for about 5% of gross domestic product (GDP) in Europe.

Increasing demand for clean & efficient fuel

Biofuels are developed and produced from conventional feedstock and lignocellulose feedstock, which are commonly known as first and second-generation fuels. The consumption of biofuels has increased rapidly across the globe due to their eco-friendly nature. Plant-based fuels are extracted from renewable sources, can be grown anywhere, and have lower carbon emissions as compared to fossil fuels. Biofuels help in reducing greenhouse gases and emit less pollution compared to other fuels. Customers are shifting to biofuels due to the rising crude oil prices globally. Biofuels can be produced according to demand because they are manufactured from corn, starch, wheat, and others. Biofuels offer various advantages such as efficient fuel, cost-benefit, durability on vehicle engines, ease to source, economic security, reduce dependence on foreign oil, and others. According to the RFA (Renewable Fuels Association), ethanol fuel type remains the highest-octane, lowest-cost motor fuel on the planet. In 2019, the U.S. Department of Energy (DOE) allocated US$73 million for 35 bioenergy research and development projects.

Biofuel Additives Market Challenges:

Growing production of electrical vehicles

The automobile manufacturers in developed countries are shifting to electric vehicles. Developed countries are imposing strict rules on carbon emission, and they are encouraging electric vehicles to decrease carbon emissions. Governments across the globe are focused on bringing cleaner electric vehicles. The depletion of fossil fuels and rapid changes in crude oil prices are some of the factors driving the electric vehicles demand. Electric vehicles have some significant emissions benefits over conventional vehicles. According to the data published by EV-Volumes more than 3.24 million electric cars are sold in 2020 globally. They also mentioned that approximately 1.4 million BEVs and PHEVs were registered in Europe during 2020, which was 137 % more than in 2019.

Biofuel Additives Market Landscape

Technology launches, acquisitions, and R&D activities are key strategies adopted by players in the Biofuel Additives market. Major players in the Biofuel Additives market are BASF SE, NALCO, Chemiphase Ltd., E-ZOIL Products, Inc., Infineum, Chevron Oronite Company LLC, The Lubrizol Corporation, OBR Joint Stock Company, Afton Chemical, Biofuel Systems Group Ltd., Fuel Quality Services, Inc. (FQS), Clariant AG, Eastman Chemical Company, Evonik Industries AG, and others.

Acquisitions/Technology Launches

In March 2021, MOL group started production of biofuel at Danube Refinery. The company is also stated that they are planning to produce more than 100.000 tons of biofuel by 2030

In 2020, Clariant signed a partnership agreement with Chemtex to market and sell Clariant’s sunliquid® technology license in China. The Clariant sunliquid® technology offers an efficient process for converting agricultural residues into low-emission, carbon-negative biofuel

In 2019, BASF has planned to expand production capacity for Sodium Methylate in Brazi. Sodium methylate supports higher yields and low preparation cost for Biodiesel. The expansion will increase the production of sodium methylate by 30% from 60,000 metric tons to 80,000 metric tons

Key Takeaways

The Asia Pacific is expected to register a CAGR of 15.2% during the forecast period (2021-2026). The increasing demand for biofuels in Asian countries such as China, India, Japan, and South Korea is driving the market demand for biofuel additives.

Biofuels are replacing fossil fuels globally and they are environmentally friendly compared to other fuel types. They offer various benefits such as easy to source, economic security, and reduction of greenhouse gases, and others.

Biofuel additives are the key products directly used in the production of biofuels. Biofuel additives enhance fuel foaming, and also helps for wax formation at lower temperatures.

Relevant Reports

A. Biofuel Market

https://www.industryarc.com/Report/18518/biofuel-market-research-report-analysis.html

B. Engine Oil Additives Market

https://www.industryarc.com/Report/7509/engine-oil-additives-market.html

For more Chemicals and Materials Market reports, please click here

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