Biofuel Additives Market Size

GROWING DEMAND FOR BIOFUELS IN THE AUTOMOTIVE INDUSTRY.

In the automobile sector, the most prevalent biodiesel mix is B20, which contains 6% to 20% biodiesel combined with petroleum fuel. B5, on the other hand, is a biodiesel mix of 5% biodiesel and 95% diesel that is often used in fleet cars. Many diesel cars may run on B20 and lower-level blends without requiring engine modifications. Biodiesel help to improve fuel lubricity and increase the cetane number of gasoline. The major benefit of biodiesel is that it may increase gasoline lubricity at mix levels as low as 1%.

Additives serve a critical role in satisfying international fuel requirements and solving real-world challenges linked with biodiesel. Biofuels are particularly essential in decarbonizing transportation because they provide a low-carbon option for current technologies such as light-duty automobiles in the short term and heavy-duty trucks, ships, and aeroplanes with limited alternatives in the long run. South American automotive output increased by ~35% in 2021, according to the European Automobile Manufacturer Association, while Asia commercial market accounted for 50.86% of the market and the global production of commercial vehicles increased by 4% in 2021.

Rising disposable income levels in both emerging and developed nations, as well as continuous infrastructural development, are expected to support market expansion. The growing demand for ecologically friendly transportation solutions has prompted commercial vehicle manufacturers to create cars with lower carbon footprints. Manufacturers are attempting to improve vehicle design by decreasing load factors and size, as well as modifying cars to meet weight limits. Furthermore, as a result of e-commerce, the need for small, medium, and heavy commercial vehicles has risen for logistics and transportation purposes. The logistics industry has evolved from just providing services to providing customer-centric solutions.

As a result, the need for commercial vehicles for transportation has skyrocketed. Thus, the growing demand for biofuel will eventually expand the biofuel additives market size during the forecast period.

Government incentives and supportive regulatory frameworks have increased demand for commercial vehicles. Bus and heavy-duty vehicle registrations have increased in North America, Europe, and the Asia Pacific regions. The transportation business is an important economic sector that deals with the movement of people and goods. These include airplanes, railways, shipping, trucking, and logistics companies, as well as those that offer transportation infrastructure. Shipping commodities is an important aspect of each country's economy.

According to transportation industry estimates, truck transportation contributed more than $150 billion to the US economy's GDP in 2021 Thus, the growing demand for commercial vehicles and low emissions regulations will boost the demand for biofuels in the forecast period. Which in turn will bolster the demand in the biofuel additives market.

However, there have been significant advances in biofuel additives demand across end-use industries. The rise in demand for biofuel additives is likely to anticipate the growth of biofuel additives market revenue during the forecast period.

November 2023

The Global Biofuels Alliance (GBA) was officially inaugurated on Saturday evening by Prime Minister Narendra Modi in the presence of leaders of a number of partner nations in New Delhi, India. The event took place on the margins of the G20 Summit. A significant effort and a top goal during India's leadership of the G20, the Global Business Agenda (GBA) has been in the works for some time now. The objective of the alliance is to facilitate worldwide collaboration and to increase the use of sustainable biofuels.

Additionally, the alliance intends to facilitate global commerce in biofuels and to provide technical assistance for national biofuel programs.

India, the United States of America, Brazil, Argentina, Bangladesh, Italy, Mauritius, South Africa, and the United Arab Emirates are the nine founding members of the Global Business Alliance (GBA), which has been created with nine initial members. Canada and Singapore are observer nations. The Initiative for the GBA was sponsored by India, the United States of America, and Brazil. A total of 19 nations and 12 international organizations have already indicated their willingness to become members of the GBA.

Out of the 19 nations, seven are members of the G20, four are among the countries that have been invited to participate in the G20, and eight are neither members of the G20 nor invitees. Among the organizations that have agreed to become members of the alliance are the World Bank, the Asian Development Bank, the World Economic Forum, the International Energy Agency, the International Energy Forum, the International Renewable Energy Agency, and the International Civil Aviation Organization.

The GBA was launched by Modi in the presence of heads of state from the United States of America, Brazil, the United Arab Emirates, Singapore, Italy, Argentina, Bangladesh, and Mauritius.

The Global Biofuel Additives Market Industry is poised for substantial growth, with projections indicating a market value of 16.7 USD Billion in 2024 and an anticipated increase to 41.7 USD Billion by 2035. This growth trajectory suggests a compound annual growth rate of 8.68% from 2025 to 2035, reflecting the increasing adoption of biofuels across various sectors. The expansion is driven by factors such as rising demand for renewable energy, technological advancements, and supportive government policies. These projections highlight the potential for biofuel additives to play a critical role in the transition towards sustainable energy solutions.

The rising awareness of environmental issues among consumers is a significant driver for the Global Biofuel Additives Market Industry. As individuals and organizations increasingly prioritize sustainability, the demand for eco-friendly fuel alternatives is surging. This shift in consumer behavior is prompting manufacturers to invest in biofuel additives that reduce emissions and enhance fuel performance. The growing preference for sustainable products is likely to influence market dynamics, encouraging companies to innovate and adapt their offerings. Consequently, this trend may lead to a more robust market presence for biofuel additives, aligning with global sustainability goals.

The increasing global emphasis on renewable energy sources drives the Global Biofuel Additives Market Industry. Governments worldwide are implementing policies to reduce greenhouse gas emissions, thereby promoting biofuels as a cleaner alternative to fossil fuels. For instance, the European Union has set ambitious targets for renewable energy usage, which includes biofuels. This trend is expected to contribute to the market's growth, with projections indicating a market value of 16.7 USD Billion in 2024 and a potential increase to 41.7 USD Billion by 2035. The compound annual growth rate of 8.68% from 2025 to 2035 further underscores the urgency for sustainable energy solutions.

The expansion of biofuel infrastructure is a pivotal factor influencing the Global Biofuel Additives Market Industry. As more biofuel production facilities and distribution networks are established, the accessibility and availability of biofuels are expected to improve. This infrastructure development is crucial for meeting the increasing demand for biofuels, particularly in regions with ambitious renewable energy targets. Enhanced logistics and supply chain capabilities can facilitate the integration of biofuels into existing fuel markets, thereby driving growth. The establishment of such infrastructure is likely to support the projected market growth, contributing to the anticipated increase in market value.

Government incentives and regulations play a crucial role in shaping the Global Biofuel Additives Market Industry. Many countries are implementing tax credits, subsidies, and mandates to encourage the use of biofuels. For instance, the Renewable Fuel Standard in the United States mandates a certain volume of renewable fuel to be blended into transportation fuels. Such regulatory frameworks not only stimulate demand for biofuel additives but also create a favorable environment for market players. As these policies become more stringent, they are expected to propel the market forward, fostering innovation and investment in biofuel technologies.

Innovations in biofuel production technologies are significantly influencing the Global Biofuel Additives Market Industry. Advances such as enzyme technology and improved fermentation processes enhance the efficiency and yield of biofuel production. For example, the development of second and third-generation biofuels, derived from non-food biomass, is gaining traction. These technologies not only optimize resource utilization but also reduce production costs, making biofuels more competitive against traditional fossil fuels. As these advancements continue to evolve, they are likely to attract investments and drive market growth, aligning with the increasing demand for sustainable energy solutions.

Major market players growth depends on the market and economic conditions, government regulations, and industrial development. Thus, the players are focusing on expanding the production capacity to meet the demand and enhance their services. The Lubrizol Corporation, BASF SE, Fuel Quality Services, Inc., Chemiphase International Ltd, Clariant AG, Afton Chemical, E-ZOIL, Eastman Chemical Company, Evonik Industries AG, Total Energies SE, Chevron corporation, Biofuel Systems Group Limited, and CHIMEC are the major companies in the market at the present that are competing in terms of quality, price, and availability. These players are primarily focusing on the development of biofuel additives.

Although the international players dominate the market, regional and local players with small market shares also have a moderate presence. The international players with a global presence, with established manufacturing units or sales offices, have strengthened their presence across major regions such as North America, Europe, Asia-Pacific, Latin America, and Middle East & Africa.

In October 2020, BASF opened a new production plant for fuel performance additives in Shanghai, China. The new facility meets the rising regional demand for fuel performance additives and offers customers in Asia more supply security and supply flexibility. The facility has recently been incorporated into BASF's global network, enhancing its regional manufacturing presence in Asia. This strategic expansion shows the company’s continuous commitment to the fast-growing markets in Asia, this will help eventually to boost biofuel additives market drowth.