Biodiesel Procurement Intelligence Report, 2023 - 2030 (Revenue Forecast, Supplier Ranking & Matrix, Emerging Technologies, Pricing Models, Cost Structure, Engagement & Operating Model, Competitive Landscape)

Biodiesel Category Overview

The biodiesel category is anticipated to grow at a CAGR of 10% from 2023 to 2030. In 2022, the category size was estimated to be valued at USD 35.30 billion with North America leading the market share due to their rule that requires diesel fuel to contain 15% biodiesel by volume. The need for a more effective, long-term solution for decreasing greenhouse gas emissions and addressing climate change issues is the primary driver of its growth. Government support and policies to promote the use of the category play a significant role in the market. For instance, in August 2022, the U.S. approved the Inflation Reduction Act which includes incentives for biodiesel and advanced fuels production.

Improved processing techniques, such as transesterification, have made biodiesel production using vegetable oil, animal oil, and used cooking oil more efficient and cost-effective increasing the competitiveness of biodiesel in the fuel market. Algal biomass and waste oil are being used to make third-generation biofuels due to their faster growth and production, lack of need for land, and higher oil content. An emerging market of biodiesel is Sustainable Aviation Fuel (SAF) which reduces emissions by 80% compared to fossil jet fuel. It is fully compatible with existing jet engines and requires zero additional investment. In September 2022, Total Energies and SARIA, a European leader in the collection and valorization of organic materials into sustainable products, signed an agreement to develop SAF production on the Grandpuits zero-crude platform.

The biodiesel category is a niche market within the larger renewable energy and alternative fuel sectors. It varies in size and characteristics depending on regional and national targets. In countries such as Brazil, effective programs are underway to promote Jatropha and Castor production for biodiesel production. Asia Pacific is the fastest growing market due to the easy availability of raw materials and increasing environmental concern, followed by North America and Europe. The availability of several dealers and suppliers makes the category highly fragmented. Along with key players like ADM and Renewable Energy Group, small-scale players also contribute to the category expansion. This category also faces competition from alternative fuels, such as ethanol and hydrogen for market share and consumer attention. Suppliers entering the market need to develop a comprehensive understanding of the industry, regulatory landscape, customer needs, and market dynamics to navigate effectively.

The cost of the category is volatile as it is influenced by factors such as feedstock costs, production volumes, supply, and demand. Additional costs include labor, equipment (tanks, pumps, and distillation units), quality assurance, transportation, and operational costs. Political tension between Russia and Ukraine has increased crude oil prices which have resulted in price increases in Europe up to USD 1.76 per liter. Fluctuation in palm oil prices due to weather or natural calamity has impacted the supply in the Asia-Pacific region. Higher prices of soybean and corn due to poor harvest and animal diseases have led to further price hikes in North America to USD 5.51 per gallon.

Sourcing in this category involves the procurement and acquisition from multiple suppliers to meet the increasing demand. Strategies such as diversified feedstock availability, quality standards, sustainability criteria, pricing, and transportation play a crucial role. Developing a strong relationship with suppliers, engaging smallholders, and ensuring the consistency and traceability of the supply chain is key. Indonesia and Malaysia are the major producers of palm oil which is an important raw material. Algae are potential sources of biofuel. Used cooking oil is one of the economical sources for production.            

Biodiesel Procurement Intelligence Report Scope