Biorefinery Market

[254 Pages Reports] The biorefinery market is expected to grow from an estimated USD 212.05 billion in 2024 to USD 314.62 billion by 2029, at a CAGR of 8.2% during the forecast period. Increased government regulations, incentives, and sustainable practices globally are creating opportunities for biorefinery products. Globally, more companies are taking on the principles of circular economy by targeting waste reduction and waste reuse. Biorefineries can help in this area by converting organic waste into high-value products. Biorefineries offer a method to transform organic (biowaste) streams, such as agricultural and industrial residues, into high-value products, such as biofuels, biochemicals, and bio-based materials. They can contribute to circular economy goals as they minimize waste and maximize resource use.

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Biorefinery Market Dynamics

Driver: Increasing demand for bio-based products and biofuels

Bio-based products refer to materials, chemicals, and energy sources that are obtained from renewable biological resources, such as plants, animals, and microorganisms, and not from fossil fuels. These are eco-friendly products that are sustainable and reduce carbon emissions. Biorefineries are important in the production of bio-based products. They use only renewable biological resources to create various chemicals, fuels, and materials. They change biomass, such as agricultural residues, forestry waste, and special-purpose energy crops, into various bio-based products. The majority of these processes break down complex organic substances into simpler molecules, which can then be transformed into useful products. The primary purpose of biorefineries is to produce several products from a single raw material, thereby reducing the use of resources. For instance, a biorefinery could create biofuels like ethanol and biodiesel, biochemicals like lactic acid, or bioplastics from a batch of biomass. Hence, both higher economic profitability and environmental objectives are achieved. The demand for bio-based products is likely to rise in the coming years as consumers and businesses become more aware of the advantages of these environmentally friendly alternatives.

Restraints: Lack of process efficiency and product consistency

One of the factors restraining the growth of the biorefinery market is the undeveloped conversion processes in the biorefinery sector. The major processes adopted in biorefineries include pretreatment, primary refining, secondary refining, purification, product conditioning, and the recovery and reuse of by-product streams. These processes are essential functions to efficiently convert biomass into a marketable product, such as biofuels, biochemicals, and biomaterials. However, many of the processes are still in the development stage and have not yet reached the level of being fully optimized. Hence, most of the currently available processes are inefficient and costly. For instance, reactive catalysts for thermal process, which is the basis for biomass upgradation, are still in the early stages of development and implementation. Biochemical processes also face significant challenges, such as low product concentration and the production of multiple side products, which result in energy-intensive and expensive downstream processes for recovery and purification. This is a major restraint to the growth of the biorefinery market.

Opportunities: Development of advanced biofuels

The development of advanced biofuels is a major opportunity in the biorefinery market. Advanced biofuels are derived from non-food biomass, providing an innovative means of attaining a sustainable energy solution. Unlike traditional biofuels that come commonly from food crops, advanced biofuels are based on the use of a wide range of organic materials, such as agricultural residues, non-food crops, algae, and waste biomass. These advanced biofuels are an economically feasible and environment-friendly alternative source of energy to traditional fossil fuels. They enable reduced greenhouse gas emissions and reliance on petroleum-based fuel. The primary forms of advanced biofuels are cellulosic ethanol, biomethanol, and fischer-tropsch diesel, among others, each offering unique advantages and possibilities for the biorefinery market.  

Biorefining plays a crucial role in advancing the principles of the circular economy by efficiently utilizing raw biomass materials and closing the loops of essential resources such as minerals, water, and carbon. This approach transforms waste and residues into valuable products, contributing to sustainability, reducing environmental impact, and promoting resource efficiency. By maximizing resource utilization, biorefineries extract the maximum value from a diverse range of biomass, including forestry residues, agricultural waste, industrial by-products, and post-consumer materials.

Challenges: Variable and high cost of feedstock

A majority of the cost factors in the production of biofuels and chemicals come from feedstock. Since ethanol is being produced to some standard, biomass quality must be certain as well. However, as there is no consistent collection process, there is often variability in biomass when it is supplied to refineries, particularly with regard to moisture content, inert matter, and size. Such variability results in delays in the production of biofuels as well as pushed up production costs. The major problems arise from a lack of standardized collection machinery and a lack of awareness among the farming fraternity about proper ways to collect biomass. Moreover, the short window during which biomass must be collected puts pressure on farmers to clear their lands. Many times, farmers have to rely on unorganized aggregators who do not use standardized processes for collecting biomass as they are unable to purchase the required collection machinery.

Storage is among the prime infrastructural challenges in the collection supply chain for second-generation (2G) biofuels. In this case, where decentralized storage or sorting facilities are not available, biomass is collected and directly taken to refineries in a supply chain, which increases the costs as well as collection time.

Biorefinery Market Ecosystem

Key players in this industry include Chevron (US), ADM (US), Valero (US), Neste (Finland), and TotalEnergies (France). These prominent companies in this sector are renowned for their reliability and financial stability as providers of biorefinery systems. They offer a diverse range of products, cutting-edge technology, extensive experience, and robust global sales and marketing networks. Their proven track record in the industry makes them trusted and knowledgeable partners for clients seeking biorefinery products. These are the companies that have proved that they can still deliver good products and services under the changing market dynamics.

First generation segment expected to be largest market during forecast period

First-generation biorefineries use already existing technology for most of the widely available feedstocks, such as sugarcane, corn, and vegetable oils. This type of refinery is common and efficient, as well as less expensive to operate. First-generation biorefineries are currently producing biofuels such as ethanol and biodiesel, which are used for blending with fossil fuels to meet renewable transportation energy targets. For example, ethanol is largely made into a gasoline blend. In the past, many governments have offered subsidies, mandates, or other incentives for first-generation biofuels coming from biorefineries producing ethanol and biodiesel. The technology for first-generation biorefinery is considered well-evolved and dominates the existing biofuel market due to the maturity of the technology and its cost-effectiveness. First-generation biorefineries continue to be the most widely used source of biofuels in the US and Brazil, as well as globally. They are a focal point of state policies and incentives, thereby accounting for a significant net contribution to the share of renewables. However, second and third-generation raw materials are expected to be increasingly used for biofuel production in the coming years.

Energy driven segment expected to be account for largest market share during forecast period

Energy-driven biofuel is a fuel made from biomass, such as forestry biomass, agricultural biomass, algae material, or animal waste, and used as renewable energy. It has the potential to reduce some undesirable aspects of fossil fuel production and use, such as conventional and greenhouse gas (GHG) pollutant emissions, exhaustible resource depletion, and dependence on unreliable foreign suppliers. Biofuels come in numerous forms: biodiesel, bioethanol, renewable diesel, and sustainable aviation fuel (SAFs). Renewable organic material is processed through fermentation to produce biofuels, which are increasingly replacing fossil fuels. One of the main drivers for this segment is the adoption of renewable energy by various industries due to stringent government policies. Moreover, the increased cost of fossil fuel, the rise in demand for fuel for automobiles, and specialized policies designed to encourage the use of biofuel boost the use of biofuel globally. Furthermore, policies in the US and Europe have contributed to a significant increase in demand for renewable diesel, also known as hydrogenated vegetable oil (HVO). These factors contribute to the growth of the energy driven segment in the biorefinery market.

"North America to be largest biorefinery market during forecast period"

The US and Canada are the major biorefinery markets in the North American region. The market in the region has been experiencing considerable development because of the increasing demand for biofuels, government regulations promoting renewable energies, and the general shift to the use of more sustainable energy solutions. The US is the world's largest producer and consumer of biofuels. North America's biofuel market is characterized by the existence of three types of bio-products, namely ethanol, biodiesel, and renewable diesel. Ethanol and biodiesel can be mixed with gasoline and diesel fuel, while renewable diesel can be used on its own to reduce greenhouse gas emissions and improve air quality. The main factors that drive biofuels in Northern America are the increased governmental financial assistance in the form of tax breaks and subsidies and blending requirements. A few big-scale biorefineries are either in the process of being set up or are being expanded with a focus on providing bio-based fuels and chemicals. Large-scale biorefineries are increasingly investing in converting agricultural waste, forest residues, and other biomass into bio-based fuels and chemicals.

Key Market Players

• Chevron (US)
• ADM (US)
• Valero (US)
• Neste (Finland)
• TotalEnergies (France)
• Green Plains Inc. (US)
• Wilmar International Ltd. (Singapore)
• Versalis S.p.A. (Italy)
• Honeywell International Inc. (US)
• Clariant (Switzerland)
• Cargill, Incorporated (US)
• BP p.l.c. (UK)
• China Petrochemical Corporation (China)
• GODAVARI BIOREFINERIES LTD. (India)
• Borregaard AS (Norway)
• Sekab (Sweden)
• Chempolis (Finland)
• UPM (Finland)
• Cosun (Netherlands)
• Novozymes A/S (Denmark)

Recent Developments

• In July 2024, Neste and HELLENiQ ENERGY, one of Southeast Europe's leading energy groups, collaborated to deliver blended Neste MY Sustainable Aviation Fuel to HELLENiQ ENERGY's facilities in Thessaloniki. It is the first time that blended sustainable aviation fuel is supplied to Greece in bulk using ships for transport.
• In September 2023, ADM and Syngenta Group signed a memorandum of understanding (MoU). The MoU focuses on developing low-carbon, next-generation oilseeds and improving seed varieties to meet the rising demand for biofuels and other bio-based products.
• In January 2023, Valero Energy Corporation and Darling Ingredients Inc. announced that they made the final investment decision on a sustainable aviation fuel project at the DGD Port Arthur plant, which is owned and operated by Diamond Green Diesel Holdings LLC, a 50/50 joint venture between Valero and Darling.

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