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A00474 | Pages: 414 | Charts: 73 | Tables: 265 |
The global second generation biofuels market was valued at $8.2 billion in 2022, and is projected to reach $87.5 billion by 2032, growing at a CAGR of 26.8% from 2023 to 2032.
Biofuels are produced through contemporary biological processes, such as anaerobic digestion rather than a fuel produced by geological processes. Second-generation biofuels are produced from non-food crops such as organic waste, wood, biomass crops, and food crop waste.
Increase in concerns about the hazardous effects of greenhouse gas (GHG) emissions, caused predominantly by the combustion of fossil fuels into the environment, is anticipated to help in the surge in installation of biofuels generation plants or bio-refineries worldwide. Production of biofuels by means of aerobic/anaerobic digestion of biomass assists in limiting the usage of fossil fuels for power generation or fueling automobiles. According to the International Energy Agency (IEA), biofuels are likely to substitute enough petroleum products to avoid carbon dioxide emission each year if produced sustainably as much as net carbon dioxide absorbed by the oceans.
The energy sector has incorporated many opportunities for growth of the market for next generation biofuels. This is expected to emerge as a replacement for traditional fuels, including diesel and petrol. Thus, the second generation biofuel has emerged as a cleaner, greener energy source, in which the number of SOx and NOx in addition to GHG emissions is less when compared to hydrogen as a fuel, thus the inclination of populace as well as government regulations are in its favor. This is one of the major drivers of the second generation biofuels market growth.
The most critical challenge for the growth of second generation biofuels market is acquisition of economical feedstock. Feedstock cost adds 80 to 90% of the ultimate fuel price for many processes and is crucial to the economic feasibility of second generation biofuels. Feedstock costs continue to be high, which is often due to processing (shredding, densifying, pulverizing, and handling) and transportation of the feedstock, and not necessarily due to growing them. The market availability of alternatives and acceptance of alternative fuels are constraints that need to be dealt with that facilitate the market growth of second-generation biofuels.
The second generation biofuels market scope is segmented into feedstock, type, process, application, and region. On the basis of feedstock, the second generation biofuels market is categorized into simple lignocellulose, complex lignocellulose, syngas, algae, and others. By type, the second generation biofuels market is classified into cellulosic ethanol, biodiesel, bio butanol, and others. By process, the second generation biofuels market is segregated into biochemical process and thermochemical process. On the basis of application, the second generation biofuels market is divided into transportation, power generation, and others.
[TYPEGRAPH]
Based on type, the other segment such as algal biofuel, and biojet fuels held the highest market share in 2022, accounting for more than two-fifths of the global market revenue, and is estimated to maintain its leadership status throughout the second generation biofuels market forecast period. Growth factors for algal biofuels include advancements in cultivation techniques, genetic engineering for higher lipid content, and innovative extraction methods. In addition, the scalability of algae production and its potential for carbon capture make it an attractive option which have significant positive impact on the market.
[FEEDSTOCKGRAPH]
Based on feedstock, the complex lignocellulose segment held the highest second generation biofuels market share in 2022, accounting for more than one-third of the global market revenue, and is estimated to maintain its leadership status throughout the forecast period. Moreover, the syngas segment is projected to manifest highest CAGR% growth from 2023 to 2032. The use of syngas as a feedstock for second-generation biofuels is experiencing notable growth owing to its adaptability and potential to utilize a wide array of feedstock sources. The rising interest in advanced biofuels, driven by environmental concerns and regulatory support, fuels the market expansion for syngas-derived biofuels.
[PROCESSGRAPH]
Based on process, the thermochemical process segment held the highest market share in 2022, accounting for nearly three-fifths of the global second generation biofuels market revenue, and is estimated to maintain its leadership status throughout the forecast period. Moreover, the biochemical process segment is projected to manifest a highest CAGR growth from 2023 to 2032. Advancements in biotechnology and enzyme engineering are enhancing the efficiency and cost-effectiveness of biochemical conversion methods, driving market expansion.
[APPLICATIONGRAPH]
Based on application, transportation segment held the highest market share in 2022, accounting for more than four-fifths of the global second generation biofuels market revenue, and is estimated to maintain its leadership status throughout the forecast period. Moreover, power generation segment is projected to manifest a highest CAGR growth from 2023 to 2032. The increasing focus on reducing carbon emissions and achieving energy sustainability has spurred interest in cleaner power generation options.
[REGIONGRAPH]
Region wise, the market is studied across North America, Europe, Asia-Pacific, and LAMEA. North America accounted for the largest share of the market in 2022 with Asia-Pacific being the fastest growing region.
Second Generation Biofuels Developments With Respect To Countries:
U.S.:
Investment: The U.S. government has allocated substantial funding for biofuel research and development. For instance, the Department of Energy (DOE) invested over $1 billion in grants and loan guarantees for cellulosic biofuels between 2007 and 2015.
Generation Capacity: As of recent data, the capacity for cellulosic biofuel production in the U.S. has been growing steadily. In 2020, the production capacity for cellulosic biofuels was estimated to be around 20-25 million gallons per year.
Brazil:
Investment: Brazil has a well-established biofuel industry, primarily focused on first-generation ethanol from sugarcane. Second-generation biofuels have seen investments from companies such as Raízen and GranBio.
Generation Capacity: In Brazil, the focus on second-generation biofuels is visible, with the country having the potential to produce over 50 billion liters of cellulosic ethanol annually from agricultural residues, especially sugarcane bagasse.
European Union:
Investment: The EU has committed to substantial funding through programs such as Horizon 2020 for biofuel research. Investments have reached billion euros for second-generation biofuel projects.
Generation Capacity: The EU's capacity for second-generation biofuels is expected to increase significantly. Countries such as Germany and Sweden have operational or planned facilities capable of producing million liters of cellulosic ethanol annually.
China:
Investment: China has been investing heavily in renewable energy, including biofuels. The Chinese government has invested over $1.2 billion, supporting R&D in this sector.
Generation Capacity: In China, the cellulosic ethanol production capacity is growing, with several demonstration plants and pilot projects aiming for commercial-scale production. Production capacity is expected to be in the millions of liters annually.
India:
Investment: India has been focusing on second-generation biofuels and has allocated significant funds for research and development in this area.
Generation Capacity: In India, generation capacity is in the developmental stage, with plans for establishing multiple commercial-scale plants producing cellulosic ethanol from agricultural residues.
The major companies profiled in this report include Algenol Biofuels, Clariant AG, International Flavors & Fragrances Inc, Fiberight LLC., GranBio, Ineos Group, Orsted A/S, POET-DSM Advanced Biofuels LLC, Reliance Industries, and Zea2, LLC. The abovementioned companies' unique services and innovative approaches contribute to the advancement of the second generation biofuels market, enabling more efficient, sustainable, and environmentally friendly practices for corporates to move toward sustainability.
Key Market Segments
Key Market Players