Algae Biofuel Market - Forecast(2023 - 2028)

Overview

Algae Biofuel Market size is forecast to reach $9.3 billion by 2025, after growing at a CAGR of 9% during 2020-2025. Demand for biofuels has increased as an alternative to fossil fuels. Growing environmental and sustainability concerns about the excessive use of fossil fuels are driving the demand for algae biofuels. The high potential of algae to replace conventional raw materials required for the production of biofuels is further boosting the adoption of algae biofuels across different industries.

Report Coverage

The report: “Algae Biofuel Market – Forecast (2020-2025)”, by IndustryARC, covers an in-depth analysis of the following segments of the Algae Biofuel Industry.

Key Takeaways

The introduction of biofuel mandates around the world is expected to force manufacturers to invest more in R&D to develop sustainable algae fuel production technology over the forecast period.

The automotive industry utilizes algae in specially designed bio catalytic converters combined with the existing three-way catalytic converter to achieve emission levels well below the standard regulations.

In 2016, the US produced more than 1.14 billion gallons of biofuel from various feedstocks, including animal fats and recycled seeds.

Due to the rapid growth of the automotive industry in the region, Asia Pacific is expected to be a key market for algae biofuels. It is expected that the presence of large economies including China and India, which account for a large share of the world's population, will drive demand for sustainable energy resources, which in turn will open up new avenues for market growth.

Type - Segment Analysis

In 2018, biodiesel dominated the market and accounting for a significant share of the total volume. This is mainly due to the increasing focus on reducing fuel and large diesel-powered vehicle emissions.

Application - Segment Analysis

Transportation is expected to be the dominant application segment in the industry due to the potential of algae to replace traditional diesel and petrol products. Growing demand for biofuels in road transport applications, including small trucks, minivans, light-duty vehicles, motorbikes, and passenger vehicles, is expected to force manufacturers to invest more in R&D to develop low-cost renewable fuel resources. These factors are expected to open up new market opportunities for product growth in the transport application over the forecast period.

Geography - Segment Analysis

North America holds the largest share in the algae biofuels market in 2018, up to 30%. Growth in this region is mainly due to the increased use of biofuel algae in the transport sector. This market is also accentuated by the presence of numerous prominent players in the region. Canada and the U.S. are countries that contribute significantly to this market. In July 2017, the U.S. Department of Energy invested approximately $8 million in the development of algae biofuel. This is expected to drive growth in the U.S. market for algae biofuel.

Drivers – Algae Biofuel Market

Rising demand for fuels in various end user industries.

The ever-increasing demand for fuels in various end-use industries, coupled with the growing need for green and sustainable energy sources, is key to the rapid evolution of the biofuel market in algae. In meeting the global needs for low-carbon fuels, algae biofuel has emerged as increasingly promising. The rapid progress of the transport industry in various parts of the world has provided the algae biofuel market with robust growth momentum. The increasing demand for low-cost fuels in the aviation sector is also a favorable trend in the biofuel market for algae.

Stringent government regulations for minimizing carbon emission.

Environmental pollution due to the burning of toxic plastic products has increased concerns related to the production of biodegradable plastic that is emission free. Strict government regulations relating to reducing carbon emissions by investing more in renewable energy resources have pushed plastics manufacturing firms to manufacture biodegradable plastics manufactured from renewable energy resources, such as algae, rather than fossil fuels. In comparison to conventional plastics manufactured from other chemical materials such as polyvinylchloride, polyethylene, and polypropylene, bio-plastics are produced from algal biomass. Increasing government initiatives on the introduction of renewable energy sources is driving algae biofuel market.

Challenges – Algae Biofuel Market

High capital Investment

High capital investment in algae biomass and fuel production, high water demand for algae production and lack of technological innovation are expected to reduce the growth of the industry.

Market Landscape

Technology launches, acquisitions and R&D activities are key strategies adopted by players in the Algae Biofuel Market. In 2019, the market of Algae Biofuel has been consolidated by the top five players accounting for xx% of the share. Major players in the Algae Biofuel Market are Algenol Biofuels Inc., Blue Marble Production Inc., Solazyme Inc., Sapphire Energy, Inc., Culture Biosystems, Origin Oils Inc., Proviron, Genifuels, Algae Systems, Solix Biofuels, and Reliance Life Sciences., among others.