The global automotive biofuels market has been witnessing strong growth over the past few years on account of its increasing application in flex-fuel vehicles and the trend is expected to continue over the forecast period. Flex-fuel vehicles allow end-users to choose their customized biofuel-fossil fuel blend which is expected to support automotive biofuels market growth over the next seven years. Stringent government regulations favoring the use of a high percentage biofuel blend are expected to spur the demand for bioethanol, which in turn is expected to augment automotive biofuels market growth over the projected period. Moreover, rising fossil fuel prices coupled with increasing air pollution associated with fossil fuels is further expected to complement the market growth over the forecast period. Increasing sales of end-users including commercial and passenger vehicles are further expected to drive the market growth. In addition, increasing environmental concerns coupled with growing GHG policies is expected to boost biofuels demand over the next seven years. Increased vehicle performances coupled with strong support from vehicle manufacturers is one of the key driving factors for the market growth. However, lack of awareness towards the advantages of biofuel in automobiles coupled with rising consumer concerns that biofuels may damage vehicle engines is expected to remain the restraining factor for the market.
Based on fuel types, the automotive biofuels market can be segmented into bioethanol, biodiesel, cellulosic ethanol, and others including biobutanol and bioDME. Biodiesel was the largest product segment in 2013 followed by bioethanol and cellulosic ethanol. Increasing the application of biodiesel in commercial and passenger vehicles especially in flex-fuel vehicles is expected to be the key factor to drive the biodiesel market. Government mandate to run the vehicles with a minimum of 10% ethanol blend is expected to spur bioethanol demand over the next seven years.
Europe was the largest regional market for automotive biofuels in 2013 followed by North America and Latin America. Stringent regulation from government bodies including EU commission made it mandatory to run vehicles with minimum of 10% bioethanol (E10) blends, and this has been increasing the demand for the automotive biofuels market in Europe. North America and Latin America markets are expected to witness significant growth over the forecast period on account of its increasing application in flex-fuel vehicles. Asia Pacific market is expected to be the fastest-growing regional market for both automotive ethanol and biodiesel owing to increasing demand from India and China.
Some prominent key players are engaged in spreading awareness towards the advantages of biofuels in automotive through branding and marketing campaigns which is expected to propel market growth over the next seven years. In addition, the application of low-cost feedstock including animal fats and recycled oil is expected to have a positive impact on industry participants to maintain their profits margins and fight against higher production costs. Establishing partnerships with efficient distributors and retailers is expected to drive market competitiveness. Key market players in the automotive biofuels market include BlueFire Renewables, Australian Renewable Fuels Limited, Aventine Renewable Energy, Inc., Renewable Energy Group, Inc., Raizen Energia Participacoes S.A and Advanced BioFuels.
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The COVID-19 pandemic and subsequent halt in manufacturing activities shall have an impact on the supply availability of a variety of renewable chemicals. Furthermore, current disruption in trade shall also gravely impact the availability of chemical stocks in import-dependent countries. The report will account for Covid19 as a key market contributor.