BAKU, Azerbaijan, Sept.3
By Leman Zeynalova - Trend:
The global biodiesel demand is expected to become stable as soon as the COVID-19 pandemic subsides and the world returns back to economic recovery, Trend reports with reference to the "Biodiesel Market, Global Forecast, Impact of COVID-19, Industry Trends, by Blend, Feed Stock Type, Growth, Opportunity Company Analysis".
In recent years, biodiesel is widely used with diesel engines in many sectors such as industrial fuels, transportation fuels, and the chemical industry. Transportation fuel biodiesel acts as the significant application segment to substitute for automotive fuels to reduce harmful emissions. The increasing demand for clean energy has also fuelled the growth of the global biodiesel market.
However, the devastating COVID-19 pandemic has had a substantial impression on the global economy at diverse stages, and the influence is also seen on biodiesel demand. With the ongoing crisis caused by the COVID pandemic, manufacturing activities and logistic operations have seen a dip in the biodiesel market.
Environmental advantages of biodiesel, easy accessibility, and the federal Renewable Fuels Standard Program have majorly added to the burgeoning demand for biodiesel.
In the coming years, biodiesel is the future fuel of the transportation industry, being environment-friendly swiftly paving market growth globally. Derived from organic plant and animal matter, the fuel is an eco-friendly alternative to petroleum diesel and can be used to power compression-ignition engines. In the United States the primary source for biodiesel is soybean oil, though the fuel can also be made from animal fats and cooking oil discarded by restaurants.
Notwithstanding, automobiles and agriculture, the significant biodiesel end-users, experienced a downturn in 2020. Furthermore, the market was hit by supply chain disruptions, raw material supply, and government shortages.
Global biodiesel market is projected to reach US$ 50.1 Billion by 2027 from US$ 34.7 Billion in 2020, growing at a CAGR of 5.39% during 2020-2027
Global consumption of biodiesel, known as FAME, will continue to grow at an average rate of nearly 3% during 2020–25, driven primarily by the developing markets in Southeast Asia and South America, particularly Indonesia and Brazil. The demand for biodiesel will vary by region, based on the development of biofuel legislation, feedstock competitiveness and the GHG reduction agenda.
Renewable diesel, a competitor to biodiesel, will register strong growth of over 10% during the next five years. Legislation that focuses on GHG reduction, such as California’s LCFS and EU’s REDII, will favor low carbon fuel use with greater content in the transportation fuel sector. Renewable diesel offers attractive properties such as infrastructure compatibility, no consumption limitation on vehicles, and low carbon intensity due to wide use of waste materials as feedstocks.
Under a broader definition, biomass-based diesel, including biodiesel FAME and renewable diesel, will experience robust growth of 4.6 percent over the next five years.