[163 Pages Report] The biodiesel market size was is estimated to be USD 34.1 billion, in 2016, and is projected to reach USD 41.2 billion, by 2021, at a CAGR of 3.8%, between 2016 and 2021. Increasing demand for environmentally-friendly fuels that reduce greenhouse gas emissions and ensure complete burning is an important factor driving the biodiesel market. The support of the government for biodiesel production by providing subsidies and imposing mandates indicates a continued growth of the market.

The vegetable oils segment accounted for the largest share of the market.

Feedstock obtained from vegetable oils such as rapeseed oil, soybean oil, and palm oil accounts for the largest share in the production of biodiesel. The feedstock used in a particular country depends on the availability of crops in that country. For instance, rapeseed oil is currently the most common feedstock used in biodiesel production, followed by soybean oil. Rapeseed oil is commonly used in many European countries for biodiesel production, whereas soybean oil is used in the U.S. and Argentina. Coconut oil and palm oil is used in Malaysia and Indonesia.

Fuel is projected to be the fastest-growing application of biodiesel during the forecast period.

Fuel application accounted for the largest share of in 2015, owing to the increasing consumption of biodiesel fuel in marine, automotive, railway, and agriculture industries. Biodiesel has a higher lubricity (50:1) than that of conventional petroleum diesel, which is also driving its application as fuel.



Europe is estimated to account for the largest market share during the forecast period.

Europe is the leading market of biodiesel, globally. However, Europe is projected to grow at a very low CAGR of in terms of volume. This is due to the saturation of biodiesel market in Europe. Asia-Pacific is projected to be the fastest-growing region.

Market Dynamics

Drivers

Potential to reduce emissions

Biodiesel is simple to use, biodegradable, and non-toxic in nature and, most importantly, it is free of aromatics, and sulfur compounds. It emits lower greenhouse gases and air pollutants, reduces toxic carbon-based emissions and can be used in most diesel engines. The increasing concern regarding greenhouse gas emissions through the use of fossil fuels is driving the growth of the biodiesel market. Biodiesel reduces emission of greenhouse gases by up to 50% as compared to petroleum diesel; and also has low toxic and carcinogenic aromatic carbon content. The U.S. consumed approximately 2 billion gallons of biodiesel in 2015, which resulted in the reduction of carbon emissions by at least 18.2 million metric tons, according to new U.S. EPA data. The production of biodiesel by several countries has helped them in reducing their dependence on foreign oil reserves, as it is domestically produced, and can be used in any diesel engine with little or no modifications to the engine or the fuel system. Owing to the fluctuating prices of petroleum-based products, biodiesel is becoming an increasingly affordable option.

Restraints

Performance concerns

Substituting conventional fuels with biodiesel blends is considered to be extremely vital for social and environmental reasons; however, there are potential problems if used in vehicles. One such example is the increase in water separation and fuel foaming, compared to pure fossil fuels. In addition, blending with low-stability biodiesel can possibly lead to higher levels of injector deposits and corrosion arising from the generation of low-molecular weight acids. There have been complaints reported from the OEMs and fuel injection equipment manufacturers for this type of damage in the field. Furthermore, significant loss of power in advanced direct injection engines have also been witnessed due to the use of poor quality biodiesel blends. An effective performance diesel fuel additive, popularly known as flow improvers, can help to guard against such problems.

Opportunities

OEM support for biodiesel continues to grow

Challenges

DaimlerChrysler (Germany), Volkswagen (Germany), and Mercedes Benz (Germany) are supporting the use of biodiesel by extending warranties on vehicles run on the fuel. DaimlerChrysler, for instance, intends to increase the warranty coverage of the engine of the vehicle if the consumers use 20% blend of biodiesel in their vehicles. This is boosting the growth of biodiesel automotive applications. In addition, the U.S. Department of Defense, which is single largest consumer of oil, globally, has decided to run most of its on-road fleets on biodiesel blends. Several state governments including those of Carolina and North Dakota have followed suit. In some European countries such as Germany and France, the government has made legislations for the vehicles to run on specific blends (5% to 10%) of biodiesel. These government initiatives are also fueling the growth of biodiesel automotive applications.

Easy availability of raw materials in emerging regions leading to overcapacity

The major raw materials used to manufacture biodiesel include palm oil, animal tallow, soy oil, palm kernel oil, and coconut oil. The emerging regions in the Asia-Pacific produce these raw materials in abundance. Moreover, the biodiesel market in the Asia-Pacific is at a growing stage as opposed to the North American and European markets which are mature, leading to manufacturers shifting to Asia-Pacific. Another aspect contributing to the growth of the Asia-Pacific market is the easy availability of raw materials. As a result, major global market players are focusing on shifting biodiesel production to these emerging regions. Easy availability of raw materials in the developing regions has lowered the entry barriers for manufacturers. As a result, many small, medium, and large manufacturers have entered the market for biodiesel and its feedstock market leading to an oversupply. In order to bridge the gap between demand and supply, the surplus production of biodiesel is being exported causing a price war in the local markets. This is a primary challenge that is faced in the biodiesel market.

Report Scope

Report Segmentation

Biodiesel Market, By Blend B100 B20 B10 B5

Biodiesel Market, By Production Technology Pyrolysis Trans-esterification Others (Dilution, Micro-Emulsification)

Biodiesel Market, By Feedstock type Vegetable Oils Edible Oils (Rapeseed/Canola, Soybean, Palm) Others Animal Fats Poultry Tallow Lard & White Grease Others

Biodiesel Market, By Application Fuel Automotive (On road vehicles, Off road vehicles) Marine Agriculture Others Power Generation Others(Solvents, Diluent, Coatings, Printing Inks, Adhesives)

Biodiesel Market, By Region Europe North America Asia-Pacific Latin America Africa



Key Market Players

The leading players in the biodiesel Market are Archer Daniels Midland Company (U.S.), Wilmar International Limited (Malaysia), Bunge Limited (U.S.), Neste Corporation (Finland), Renewable Energy Group Inc. (U.S.), Louis Dreyfus Company (Netherlands), Cargill Inc. (U.S.), BIOX Corporation (Canada), Munzer Bioindustrie (Austria), and Emami Group (India)

Recent Developments

In November 2016, Renewable Energy Group Inc. started expansion of its Ralston, IA bio-refinery worth USD 24 million. This expansion will increase the annual production capacity to 30 million gallon from 12 million gallon and will help the company to serve the increasing demand of biodiesel in the U.S.

In August 2016, Cargill Inc. expanded its canola research facility in Aberdeen (Canada). The expansion included a pathology lab, new state-of-the-art Quality Assurance lab, ventilated seed prep room, and high efficiency LED lighting throughout the facility, with UV repelling windows. This expansion covered 14,000 Sq. ft. area, and it will allow the company to conduct research and innovations in the specialty canola business.

In June 2016, BIOX Corporation acquired a biodiesel facility in Sombra, Ontario owned by Methes Energies Canada Inc. The facility has the capacity of producing 50 million liters of biodiesel. This acquisition will increase the company's production capacity by 75% and enable it to serve its customers in North America.

Key questions addressed by the report:

What are the global trends in demand for biodiesel? Will the market witness an increase or decline in demand in the coming years?

What is the estimated demand for the different applications of biodiesel?

What were the revenue pockets for the biodiesel market in 2015?

What are the different end-use industries of biodiesel?

Who are the major biodiesel manufacturers globally?

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