A growing government emphasis on developing bio-jet fuels in the aviation industry is projected to lead to the hydro processed esters and fatty acids (HEFA) technology segment dominating the market during the forecast period.
Due mostly to the combustion of traditional fossil fuels by aircraft engines, the aviation sector is among the industries with the largest emissions of greenhouse gases. Globally, nations have ratified the Paris Accord and established emission reduction goals. In the upcoming years, this aspect is anticipated to raise investments in the market for renewable aviation fuel and create opportunities. The major market participants are concentrating increasingly more on long-term values, and a few of them have developed sustainable sourcing methodologies for assessing long-term contracts. The top competitors in the global renewable fuel market are also implementing a steady and low-risk strategy in an effort to gain market share. Businesses have been expanding their operations through various acquisitions and mergers to keep up with the escalating demand. Governments all throughout the world are also working with market participants.
The renewable fuels market was estimated to be worth US$ 887.19 billion in 2021 and is anticipated to reach US$ 1,753.6 billion by 2030, growing at a CAGR of 7.86% from 2022 to 2030.
Industry overview for the renewable fuel
Technological developments and the adoption of novel technologies are some of the major reasons fueling the growth of the global market for renewable fuels. The global market for renewable fuels is growing as a result of the growth in global electricity demand. The expansion of government programs for the power sector's development is another factor boosting the demand for renewable fuels globally. The government offers incentives and subsidies to market participants in the international market for renewable fuels. One of the potential cleaner fuel substitutes for conventional fossil fuels is biofuels. Their use will also expand with the availability of funding and financial resources for research and development to produce biofuels at a lower cost.
Market disruption from the COVID-19 epidemic was significant. Lockdowns instituted as a result of the pandemic to contain the virus reduced air travel, which reduced the need for aviation fuel. The market is being driven by factors such as government regulations, initiatives to reduce aviation industry emissions, and rising air traffic. However, the cost premium associated with renewable aviation fuel over conventional jet fuel may limit the market's expansion throughout the course of the projection period.
Key developments of the renewable fuel
- With 9,000 MW of new capacity added in 2019, the United States is adding more wind power than ever before. The U.S. now has 105.6 GW of capacity in total. In 2019, a total of 2,166 units and $67 million were invested in the installation of 18 M.W. of highly scalable wind capacity throughout 17 states. In order to serve agricultural, commercial, governmental, industrial, institutional, residential, and municipal users, distributed wind systems have been developed from Pennsylvania to California.
- The U.K. government also launched a $1.2 billion package in September 2021 for public and private investment in India's green programs and renewable energy. In order to raise private funding for environmentally friendly infrastructure in India, they have launched a Climate Finance Leadership Initiative (CFLI) India collaboration. These investments would aid India in achieving its 2030 goal of 450 Gw of renewable energy. Therefore, during the anticipated term, the government's investment in renewable energy sources will help the industry grow.
Future Development of the Renewable Fuel Market, 2022 to 2030
- In April 2021, Engie partnered with Eocycle-XANT to provide its Belgian clients with a selection of regional green energy solutions that included tiny wind turbines. In accordance with requirements, the former is tasked with handling customer requests and sending them to Eocycle-XANT. It is planned for the latter to be in charge of the turbine's installation, maintenance, and permit. By 2022, both businesses hope to have deployed 10 SWTs as part of the initial phase of their cooperation, providing sustainable energy to farms, SMEs, and businesses with cooling systems.
- The B20 palm oil biofuel strategy will be implemented nationwide by year's end, according to Malaysia's Palm Oil Board, which announced its plans in January 2022. The deadline to generate B20 biodiesel, which contains 20% palm oil, for the transportation industry was originally set for January 2020, but it was postponed due to the epidemic.
- In January 2021, Shell PLC unveiled the 25 MW Qabas solar plant. There are about 88,000 solar modules in the factory, which covers 50 acres in Oman's Sohar Free Zone. Each year, it helps to prevent about 25,000 tonnes of CO2 emissions.
- A proof-of-concept power plant in Cornwall started producing geothermal steam in July 2021, marking a significant achievement for the UK's developing geothermal energy industry. The project is scheduled to start producing power in 2022.
- In 2021, a $43 billion transaction was announced by the South Korean government. It is projected that the country will have the largest offshore wind power complex in the world by 2050, as it works to become carbon neutral. 33 different parties are included in the agreement, including regional governments, KEPCO, and significant for-profit organizations including Doosan Heavy Industries & Construction and SK E&S.
Type Insight 2022 to 2030
The biofuel industry controlled the market for renewable fuels in 2021. Fuels created from garbage, plants, and animals are known as biofuels. The reason they are categorized as renewable fuels is that the feedstock they use can regenerate more quickly than conventional fossil fuels. The finite availability of resources derived from fossil fuels and the growing understanding of the need to minimize carbon emissions are two factors that are anticipated to enhance the industry. Additionally, it is anticipated that the availability of various supportive legislative frameworks and financial incentives for the use of biofuels globally would increase their demand, notably in the transport industry.
Over the anticipated timeframe, the wind power segment will experience the fastest growth. Wind energy is converted into mechanical energy by the wind turbine, which is subsequently converted into electrical energy by the generator. Wind energy can be produced both onshore and offshore. Onshore wind power is connected to land-based turbines, whereas offshore wind power is generated by turbines that are situated in the water. The steady wind flow, on the other hand, has allowed offshore wind turbines to become more organized than onshore wind turbines.
User Insight 2022 to 2030
In 2022, the market for renewable fuels was dominated by the industrial sector. It is anticipated that the growing demand for clean energy would increase the number of utility projects and expand the industrial market for renewable fuel. The industrial category is expanding as a result of the expanding industrial developments.
Over the anticipated timeframe, the commercial category is anticipated to grow significantly. The increasing need for power in data centers and communication base stations, along with the growing acceptability of renewable fuel in businesses like hotels, corporate offices, and hospitals, is anticipated to boost demand for goods across the commercial sector.
Regional Analysis 2022 to 2030
In 2022, Asia-Pacific dominated the market for renewable fuels. The renewable fuel market in the Asia-Pacific area was dominated by China and India. By 2022, China will dominate the global market for renewable fuel. The nation's overall capacity for renewable energy in 2020 increased by 17.9% over the previous year to 894 GW. Solar, hydroelectric, and wind energy are the main renewable fuel sources in the country. Additionally, the market for renewable fuels in the Asia-Pacific area is expanding due to expanding government efforts. Over the course of the prediction, North America is anticipated to grow the fastest. In North America, the market for renewable fuels is dominated by the United States. Due to the region's rising demand for biofuel, the market for renewable fuels in North America is expanding.
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