Renewable Fuels Market - Forecast, 2024

Renewable Fuels Market Overview

The Renewable Fuels Market size is forecast to reach US $231190?Millom?by 2030, after growing at a CAGR of 7.5% during the forecast period (2024-2030). Renewable Fuels?are primarily obtained from renewable sources such as biomass, hydropower, wind, solar and other sources. It can be categorized into biofuels which include bioethanol, biodiesel and pyrolysis oil derived from the lignocellulose fraction of biomass along with hydrogen fuels (also known as green hydrogen). Renewable Fuels?are used in a wide range of industries such as power generation and transportation which includes automotive, marine, aerospace, locomotive and other industries. According to the International Organization of Motor Vehicle Manufacturers (OICA), the total global automobile production reached 80.2 billion units in 2021, an increase of 3% when compared to 77.7 billion units in 2020. An increase in automobile production along with the surging demand for biofuels acts as a major driver for the market. On the other hand, high costs associated with biofuels may act as a constraint for the market.

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COVID-19 Impact

There is no doubt that the COVID-19 lockdown has significantly reduced manufacturing and production activities as a result of the country-wise shutdown of manufacturing sites, shortage of labor and the decline of the supply and demand chain all over the world, thus, affecting the market. Studies show that the outbreak of COVID-19 sharply declined the production of automobiles in 2020 due to a lack of operations across multiple countries around the world. According to OICA (International Organization of Motor Vehicle Manufacturers), the production of automobiles decreased globally by 16% in the year 2020 as compared to 2019. However, a slow recovery in the automotive industry has been witnessed across many countries around the world since 2021. Biofuels such as biodiesel are primarily used in automobile engines, fuel cells, and more, due to their excellent sustainability and reduced greenhouse emissions, along with improved engine lubrication and performance. For instance, recent insights from OICA states that the total automobile production in 2021 in Europe, America, Asia and Africa increased by 25%, 17%, 28% and 37% respectively in comparison to 2020. In this way, a steady increase in the production of automobiles is expected to increase the demand for biofuels for use in automotive components, owing to their durability and lubrication properties. This indicates a steady recovery of the market in the upcoming years.

Report Coverage

The report:?“Renewable Fuels Market Report– Forecast (2024-2030)” by IndustryARC covers an in-depth analysis of the following segments in the?Renewable Fuels Industry.

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By Type:?Biofuels (Bioethanol, Biodiesel, Pyrolysis oil), Hydrogen Fuels & Others.

By Source:?Biomass, Hydropower, Geothermal, Wind, Solar & Others.

By Application:?Heat Engines, Fueling Systems, Fuel Cells, Energy Recovery Systems, Vehicles, Power Generators, Pipeline Transport & Others.

By End-Use Industry:?Power Generation, Transportation (Automotive, Marine, Aerospace, Locomotive) & Others.

By Geography:?North America (USA, Canada and Mexico), Europe (the UK, Germany, France, Italy, Netherlands, Spain, Russia, Belgium and the Rest of Europe), Asia-Pacific (China, Japan, India, South Korea, Australia and New Zealand, Indonesia, Taiwan, Malaysia and the Rest of Asia-Pacific), South America (Brazil, Argentina, Colombia, Chile and the Rest of South America), the Rest of the World (the Middle East and Africa).

Key Takeaways

• Biofuels held the largest share in the?Renewable Fuels Market in 2021. Its wide range of properties and benefits such as excellent lubrication, low VOC content and more, is expected to increase its demand over other types of fuels in the market.
• Transportation industry held the largest share in the Renewable Fuels Market in 2021, owing to the increasing demand for renewable fuels from the automotive, aerospace, marine and locomotive sectors across the world. For instance, Boeing and Airbus delivered 99 and 187 commercial aircraft during the fourth quarter of 2021, which is expected to increase the demand for renewable fuels for use in aircraft engines and fueling systems during the above-mentioned forecast period.
• Asia-Pacific dominated the Renewable Fuels Market in 2021, due to the increasing demand from the transportation sector of the region. For instance, recent insights from OICA states that the total automobile production in 2021 in Asia-Pacific increased by 28% in comparison to 2020.

Renewable Fuels Market Segment Analysis – By Type

Biofuels held the largest share in the Renewable Fuels Market in 2021 and it is expected to grow at a CAGR of 7.6% between 2024 and 2030, owing to a range of advantages they offer over other types of Renewable Fuels. Biofuels such as biodiesel, ethanol and more, offer better engine lubrication and cause lower carbon emissions in comparison to other types of renewable fuels. Moreover, biofuels are more cost-effective and adjustable to current engine designs and are known to perform well in most conditions as compared to other types of Renewable Fuels. Hence, all of these properties and benefits of biofuels are driving its demand over other types of Renewable Fuels. For instance, the total production of biodiesel in the US reached up to 1,817 million gallons in 2020, an increase from 1,725 million gallons in 2019. Thus, such increasing production of biofuels such as biodiesel, ethanol and more are expected to boost the growth of the market during the same forecast period.

Renewable Fuels Market Segment Analysis – By End-Use Industry

The transportation industry held the largest share in the Renewable Fuels Market in 2021 and is expected to grow at a CAGR of 7.5% between 2024 and 2030, owing to the increase in production from automotive, aerospace, marine and locomotive sectors across the globe. For instance, recent insights from the European Automobile Manufacturers' Association (ACEA) state that total passenger car production during the fourth quarter of 2020 reached around 34 million in Asia-Pacific, 14 million in Europe, 1.3 million in the Middle East/Africa, 1.7 million in South America and 9.6 million in North America, respectively. In February 2021, the construction work started for the development of the British rail manufacturing facility in Goole, UK. The construction of this facility will be completed by 2023. Moreover,?Airbus delivered around 460 commercial aircraft while Boeing delivered 230 commercial aircraft in 2021.?In February 2021, A.P. Moller – Maersk, a Denmark-based shipping company, announced its plan to launch its first carbon-neutral liner vessel in Denmark. The construction of the new vessel is scheduled to be delivered in 2023.?Furthermore, in February 2021, the operations for the development of the British rail manufacturing facility commenced in the UK. The development of this facility is expected to be completed by 2023.

Thus, such increasing production from the transportation sectors is expected to increase the demand for Renewable Fuels?since it is primarily used in various components such as engines, fueling systems, fuel cells and more, owing to their excellent sustainability and lubrication properties. This is expected to accelerate the growth of the market during the forecast period.

Renewable Fuels Market Segment Analysis – By Geography

Asia-Pacific held the largest share in the Renewable Fuels Market in 2021 up to 31%. The consumption of Renewable Fuels?is particularly high in this region due to its increasing demand from the transportation sector. For instance, recent insights published by the OICA (International Organization of Motor Vehicle Manufacturers) during the fourth quarter of 2020 state that around 25 million, 3.5 million, 8 million and 3.4 million units of vehicles were produced in China, South Korea, Japan and India, respectively, which in turn, contributed to approx. 50% of the global automobile production during the year 2020.?In February 2022, Mitsubishi Shipbuilding partnered with TotalEnergies for the construction of a liquefied CO2 marine carrier in Japan. Its construction is scheduled for completion by 2023. Furthermore, in September 2021, the construction of a new fishing training ship began in Taiwan. The government of Taiwan invested NT$840 million (US$30.2 million) in the construction of the new ship which also complies with international standards. Its construction is scheduled to be completed in 2023.

In this way, an increase in the production from the transportation sectors across multiple countries in the region is expected to increase the demand for Renewable Fuels, owing to their durability and reduced greenhouse emissions, along with improved engine lubrication and performance. This is anticipated to propel the growth of the market during the aforesaid forecast period.