Yemisi Izuora
A new study has shown that the value of global consumption of biodiesel is estimated at $28.9 billion by the end of 2018 and is expected to register a 3.1 per cent Compound Annual Growth Rate, CAGR over the period, 2018–2026.
This is according to a recent study on biodiesel ‘Anticipated Increase in Biodiesel Blending Ratio to Support Market Growth‘ published by Persistence Market Research.
This report divulges the demand and its break-up on the basis of feedstock and application.
The demand for biodiesel around the globe has witnessed significant growth in the recent past, owing to the increasing energy needs, rising crude oil prices and growing demand for clean and renewable sources of energy. Along with this, the growth of the automotive industry and the increasing number of vehicles in operation are the key factors driving the demand for fuel, globally.
However, the use of diesel-fueled vehicles results in the emission of pollutants, which are hazardous for the environment, ecosystem and humankind. Several countries depend on the import of crude oils to cater to the increasing demand for diesel fuels, owing to which the economic burden has increased.
Thus, to evade these issues, biodiesel is a viable alternative for petroleum diesel fuels. Several countries have mandated the blending of biodiesel with conventional fuels, owing to its high compatibility and reduction in pollutant emissions. The abundant availability of feedstock also drives the biodiesel market.
The Organization of Petroleum Exporting Countries, OPEC, are channelling efforts to maintain growth in crude oil prices through a reduction in oil production. Thus, this expected rise in crude oil prices will further propel the demand for Biodiesel. However, fluctuating feedstock prices may hamper the global biodiesel market. Also, in European countries, strong emphasis is laid on biodiesel production from non-edible oils, which is expected to have a significant impact on the demand for vegetable oil feedstock in the coming years. In the biodiesel market, the penetration of the hydrotreated vegetable oil (HVO) technique has been increasing, which in turn is expected to support the market growth.
The vegetable oil segment is estimated to dominate the global biodiesel market on the basis of feedstock during the forecast period. This can mainly be attributed to the abundant availability, low price and wide range of vegetable oil feedstock. Soybean and canola oil are prevalently consumed in biodiesel production.
However, in various regions, different types of vegetable oils are preferred and their selection primarily depends upon the availability and price in local/regional market. The vegetable oil segment is expected to grow at a steady CAGR during the forecast period. Moreover, the UCO (Used cooking oils) segment is expected to gain traction and register a significant CAGR during the forecast period.
In terms of consumption, biodiesel is estimated to witness high demand from the automobile segment wherein it is blended with conventional diesel fuels. Around the globe, the mandatory blending of biodiesel is the key driving force for market growth. The automobile segment is expected to register 1.3X growth in terms of value over the forecast period.
On the basis of region, Europe is expected to dominate the global biodiesel market throughout the forecast period. The region’s biodiesel market is expected to grow at a CAGR of around 1.2 per cent during the forecast period.
South Asia & Oceania is projected to register a significantly high CAGR in the global biodiesel market during the forecast period.
Europe, coupled with South Asia, is projected to register a substantial growth rate in the global biodiesel market during the forecast period while China is expected to witness healthy growth as compared to the rest of the regions.