The Global liquid biofuels market is estimated to be valued at US$ 137.68 Bn in 2024 and is expected to exhibit a CAGR of 6.4% over the forecast period 2024 to 2031.

Key Takeaways

Key players operating in the liquid biofuels market are The Archer-Daniels-Midland Company, Valero Energy Corporation, Green Plains Inc., Gevo, Chevron, Neste, TotalEnergies, Wilmar International Ltd, Enerkem, POET, Fulcrum BioEnergy, Inc., Alto Ingredients, Inc., Pacific Biodiesel, Südzucker AG, Emami Agrotech Limited, Chemical Construction International Limited, Khanda BioFule, BIOD TECHNOLOGY FZCO, Lootah Bio Fuels, and Neutral Fuels. The growing demand for ethanol as a biofuel additive and biodiesel from the transportation sector is expected to drive the growth of the market over the forecast period. Advancements in biotechnology and new feedstock technologies for higher yielding advanced biofuels are likely to boost the liquid biofuels market.

Market Trends

The increasing use of Liquid Biofuels Market Size for the production of cellulosic ethanol and biodiesel is a key trend witnessed in the market. Countries worldwide are also promoting research and development of advanced biofuels produced from non-food feedstock such as algae and municipal solid waste which can significantly reduce greenhouse emissions. Another important trend is the blending of biofuels with petroleum-based transportation fuels by oil marketing companies and adoption of higher blends such as E15, E30 and B20 blends in certain regions.

Market Opportunities

Favorable policies supporting domestic production and consumption of biofuels through tax incentives, mandates and tariff protection in major markets create significant opportunities. Development of cost-effective technologies to produce advanced biofuels at commercial scale from lignocellulosic biomass can unlock new opportunities. Partnerships between fuel producers, technology developers, fleet owners and regional governments are opportunities for large-scale transitioning towards sustainable bio-based transportation fuels.

Impact of COVID-19 on Liquid Biofuels Market Growth

The COVID-19 pandemic has significantly impacted the growth of the global liquid biofuels market. During the initial months of the pandemic, several countries imposed strict lockdowns and movement restrictions to control the spread of the virus. This led to a steep decline in vehicular traffic and fossil fuel demand. As a majority of liquid biofuels are used as fuel additives or replacements for gasoline and diesel in the transportation sector, their demand reduced drastically. Additionally, lockdowns disrupted global supply chains, creating shortages of raw materials required for biofuel production. Ethanol and biodiesel producers were forced to either operate at minimum capacities or shut down plants temporarily.

As lockdowns eased in late 2020 and economies began recovering gradually, liquid biofuels demand rebounded to some extent. However, it is still below pre-pandemic levels as international travel restrictions are still in place. The rising prices of fossil fuels during the ongoing energy crisis have provided some support to biofuel prices. Governments and industry players are also promoting greater blending of biofuels with gasoline and diesel to reduce dependence on imported oil amid geopolitical uncertainties. Multiple countries have announced plans to expand their biofuel blending mandates in the coming years. The shift towards renewable fuels is expected to accelerate post-pandemic. However, disruptions from new virus variants pose risks to the market's recovery trajectory.

Geographical Regions with Highest Liquid Biofuels Value Concentration

North America accounts for the largest share of the global liquid biofuels market in terms of value. Countries like the US and Brazil are among the world's top producers and consumers of ethanol and biodiesel. Favorable government policies like the Renewable Fuel Standard in the US which mandates increasing volumes of biofuel blending annually have driven significant investments in biofuel production facilities in the region. With an annual production capacity of over 57 billion liters, the US alone meets over 40% of the global ethanol demand.

Asia Pacific is the fastest growing regional market for liquid biofuels globally. Countries such as Thailand, China and India are incentivizing their use to reduce oil import bills and curtail emissions. As the transportation sectors in Asia's emerging economies continue to expand rapidly, the demand for sustainable fuel alternatives like biodiesel and bioethanol is expected to rise exponentially in the coming years. The region's large agricultural lands and growing feedstock supplies also provide advantages for biofuel manufacturers.

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