Second-Generation Biofuels Market Trends

Growth Drivers

• Growing Demand for Vehicles

Around 65 million cars were sold globally in 2021, however that number rose to about 66 million in 2022. As a renewable substitute for fossil fuels in transportation, second-generation biofuels may be employed. They could be used in vehicles as a stand-alone fuel or blended with regular petrol or diesel. The automobile sector is interested in biofuels produced from non-food feedstock’s since they have the potential to lower greenhouse gas emissions and air pollution.

• Rise in Generation of Electricity

In 2022, approximately 4,243 billion kilowatthours (kWh) (or approximately 4.24 trillion kWh) of electricity were generated by utility-scale electrical producing facilities in the United States. Electricity may be produced using second-generation biofuels. Burning biomass may produce heat, which may be utilized to create steam and power turbines to generate electricity. The technique is known as biomass combustion. Biofuels may additionally be utilized in fuel cells to directly generate power.

• Surge in Government Initiatives to Use Biofuels

In addition to moving the deadline for blending about 19% ethanol into petrol from 2030 to 2025, the government of India has also planned to increase domestic biofuel production by approximately 9% annually.

• Growth in Production of Bioplastics

In 2021, there were about 3 million metric tona of bioplastics produced globally. Second-generation biofuels could serve as a feedstock for the creation of bioplastics. For instance, some biofuels are produced using non-food feedstock such agricultural waste, forestry byproducts, and energy crops. These feedstocks could also be utilized to make biopolymers, which could then be used to make bioplastics.

• Upsurge in Construction Activities

Between 2002 and 2021, the value of US public residential construction investments increased significantly. The public sector made roughly USD 10 billion in residential building projects in 2021. Through the use of huge cars and heavy machinery that utilize a lot of fossil fuels, the construction industry does contribute to greenhouse gas emissions. Second-generation biofuels produced from non-food feedstocks may offer a renewable alternative to fossil fuels for these vehicles and equipment, reducing emissions and mitigating the environmental implications of construction activities.

Challenges

• High Production Costs
• Lack of Availability of Feedstocks - One important aspect that could slow the market's expansion for second-generation biofuels is the scarcity of feedstocks. The majority of second-generation biofuels are made from non-food feedstocks including agricultural and forestry waste, which may be in short supply or in just certain seasons. The main cause of the limited availability of feedstocks is the potentially expensive and ineffective collection and transportation of biomass.  For instance, the need to gather agricultural waste from various sources and bring it to a central location for processing could significantly increase the price of producing biofuels. Additionally, elements including weather patterns and changes in land use could have an impact on the quantity and quality of biomass, which could have an impact on the supply of feedstocks.
•  Policy Uncertainty