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Bio-Butanol Market Overview
Bio-Butanol Market size is estimated to reach US$1.8 billion by 2027 after growing at a
CAGR of around 7.3% from 2022 to 2027. Bio-Butanol is a second-generation
liquid alcohol fuel that is produced by the fermentation of biomass and
provides higher energy content and low volatility in comparison with ethanol.
Hence, due to its rich chemical and anti-corrosive properties, Bio-Butanol is
used as a chemical intermediate in the manufacturing of plasticizers and
solvents such as acrylates, acetates, and glycol ethers. Bio-Butanol has applicability
in sectors like construction, automotive, aerospace, paints & coating, and chemicals.
Factors such as the high efficiency of Bio-Butanol as fuel, growth in the construction
sector, and an increase in aircraft deliveries for tackling growing air traffic
are driving the growth of the Bio-Butanol Market. However, the growing demand
for fuel-efficient electric vehicles can lead to Bio-Butanol’s replacement, which can hamper the growth of the Bio-Butanol industry. COVID-19 caused
disruptions in activities of the automotive sector, as there was a lack of
labor & raw material availability. For instance, according to the International
Organization of Motor Vehicle Manufacturers, in 2020, global production of
automotive was 77.7 million units showing a 15.6% decrease in comparison with
2019. Bio-Butanol is primarily used as fuel for internal combustion engines in automobiles. The
decrease in production output of the automotive sector reduced Bio-Butanol usage in them, which negatively impacted Bio-Butanol industry growth.
Report Coverage
The report: “Bio-Butanol Market Report – Forecast
(2022 – 2027)”, by IndustryARC covers an in-depth analysis of the following
segments of the Bio-Butanol Industry:
By Feedstock – Corn,
Sugar Cane, Sugar Beet, Wood, Cereals, and Others.
By Packaging – Drums,
Bottles, Bags, and Others.
By Application – Industrial
Solvents, Fuel & Lubricants, Resins, Food Grade-Extractants, Chemical
Intermediates, Herbicides, Plasticizers, and Others.
By End-Use Industry – Paints
& Coatings, Chemical & Petrochemical, Textile, Building & Construction
(Commercial, Residential, Industrial, and Infrastructure), Food & Beverages,
Transportation [Aerospace, Automotive (Passenger Vehicle, Light
Commercial Vehicle, and Heavy Commercial Vehicle), Marine, and Locomotive],
Pharmaceutical, Personal Care, Cleaning Industry, Plastics
& Rubber Industry, and Others.
By Geography - North America (USA, Canada, and Mexico),
Europe (UK, Germany, France, Italy, Netherlands, Spain, Belgium, and Rest of
Europe), Asia-Pacific (China, India, Japan, South Korea, Australia, New
Zealand, Indonesia, Taiwan, Malaysia, and Rest of APAC), South America (Brazil,
Argentina, Colombia, Chile, and Rest of South America), and Rest of the World
(Middle East, and Africa)
Key Takeaways
- Asia-Pacific dominates the Bio-Butanol industry as the region consists of major economies like China which is the leading producer of paints and automotive and is the main end user of Bio-Butanol.
- Biobutanol is perceived as a suitable replacement for conventional petroleum-based fuels because of its higher energy density and molecular similarity to gasoline which makes it more readily usable for the current fuel engines.
- Bio-butanol finds high application in the agriculture sector where it is used as food grade solvents during the manufacturing and extraction of food items, especially for processed food such as cheese and meat products.
- The growing consumption of textile items namely clothing and apparel will create growth opportunities for the Bio-Butanol industry as Bio-Butanol-based resins are used in the textile sector to impart wrinkle-resistance to fabrics.
Figure: Asia-Pacific Bio-Butanol Market Revenue, 2021-2027, (US$ Million)
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Bio-Butanol Market Segment Analysis – By Packaging
The drum segment held the largest share in the Bio-Butanol Market in 2021 and is forecasted to grow at a CAGR of 7.1% during the forecast
period 2022-2027. Bio-Butanol being used as a chemical intermediate, solvent,
and fuel is mainly found in liquid form due to which it is mainly stored in big
PVC drums and is used in sectors like automotive and aerospace. Rapid
development in these sectors and an increase in demand for new automobiles and
aircraft have positively impacted the usage of Bio-Butanol as fuel in them. For
instance, according to European Automobile Manufacturer Association, in 2021,
South America car production grew by 11% while US car production grew by 3.1%.
Further, according to the annual report of Boeing, in 2021, the company delivered
340 commercial aircraft showing a 116% increase in deliveries in comparison
with 2020. Hence, such an increase in productivity of the automotive and
aerospace sector will create more usage of Bio-Butanol as fuel in them,
resulting in more usage of drums for storing Bio-Butanol as fuel. This
extensive factor will increase the drum segment growth during the forecast
period.
Bio-Butanol Market Segment Analysis – By End-Use Industry
The automotive segment held the significant share in the Bio-Butanol Market in 2021 and is forecasted to grow at a CAGR of around 6.8% during the forecast
period 2022-2027. Bio-Butanol has high energy content in comparison with
ethanol, and when at high concentration it is mixed with gasoline, the motor
fuel produced is used in spark ignition engines and it produces less
combustion. Moreover, as an intermediate, Bio-Butanol is used in the manufacturing
of plasticizers which are used in seats, underbody coatings, and passenger
compartment parts of vehicles. The increase in production of passenger cars on
account of high demand from the middle-class segment has positively impacted
the usage of Bio-Butanol in the automotive sector. For instance, according to the
International Organization of Motor Vehicle Manufacturers, in 2021, global
passenger car production was 57 million units showing a 2% increase in
comparison with the 2020 production volume. Such an increase in the production
of passenger cars will create more usage of Bio-Butanol in the automotive
sector as fuel and plasticizers, resulting in a positive impact on the growing automotive
segment, which will further boost the market growth of the Bio-Butanol Market.
Bio-Butanol Market Segment Analysis – By Geography
Asia-Pacific held the largest share in the Bio-Butanol Market in 2021 and is forecasted to grow at a CAGR of around 8.6% during the forecast period 2022-2027. The region consists of major manufacturing countries like China, India, Japan, and South Korea which consists of major end users of Bio-Butanol such as automotive and construction. The rapid economic development in these countries and growing investments in industrial sectors have increased their industrial production output of them. For instance, according to the International Organization of Motor Vehicle Manufacturers, in 2021, from 80 million units produced globally, Asia-Pacific held a 50% share in global automotive production with major countries like China producing 26 million units, India 4.4 million units, and South Korea 3.4 million. Further, according to Japan’s Ministry of Land, Infrastructure, Transport, and Tourism, in June 2021, construction orders for new houses increased to 32.3% in comparison with 2020 orders for the same month. An increase in automotive production will increase Bio-Butanol usage as fuel, while the increase in housing construction will create more usage of Bio-Butanol-based plasticizers. This will result in a positive growth of the Bio-Butanol industry in the Asia-Pacific region.
Bio-Butanol Market Drivers
High efficiency of Bio-Butanol as Fuel
Biobutanol is fuel and an oxygenate
that can be mixed with gasoline in spark-ignition engines. Hence, Bio-butanol in
comparison with ethanol is less explosive & corrosive, has lower vapor
pressure, high energy content, and low volatility on account of which fewer
emissions are generated with the use of biobutanol fuel. Moreover, as
bio-butanol is produced by fermentation of lignocellulosic biomass, as a
renewable fuel bio-butanol has high octane number, flexible fuel blends, and
fewer ignition problems. The growing demand for biofuel on account of rising
oil prices and government policies to reduce greenhouse gas emissions will
create more demand for renewable fuel in the transportation sector, which will
have a positive impact on the usage of bio-butanol as a transportation fuel.
Growing Construction Activities
Bio-Butanol finds high applicability in the construction
sector as acrylates and plasticizers derived from bio-butanol are majorly used
in construction applications. Plasticizers are used in cement to improve its
quality, while acrylates due to lightweight and shatter resistance are used in
window panels of buildings besides glass. The development in economies coupled
with a constant increase in population has led to an increase in the scale of
construction activities. For instance, according to Germany’s Federal Statistical Office, in January 2022, the construction of
29,951 dwellings was permitted in Germany, showing an increase of 8.3% compared
to 2021 same month. Further, according to Statistics Canada, in December 2021,
investment in Industrial Construction increased by 1.6% while investment in
commercial construction increased by 1.7%. Such, an increase in construction
activities will create more usage of bio-butanol-based acetates and
plasticizers in the construction sector, resulting in a positive growth of the bio-butanol
industry.
Bio-Butanol Market Challenge
Growing demand for Electric Vehicles
Due to rising environmental concerns
and growing technological advancements consumers have started shifting their
demand from fuel combustion vehicles to electric hybrid vehicles. Hence, this
has caused an increase in the share of electric vehicle consumption. For
instance, according to European Automobile Manufacturer Association, in 2021, hybrid electric vehicles accounted for 19.6% of all new
passenger cars registered across the EU, compared to 11.9% in 2020, and
electrically-chargeable vehicles also saw a strong increase in sales, making up
18.0% of total car registrations, up from a 10.5% share in 2020. Such an
increase in electric vehicle sales will have a negative impact on the usage of
bio-butanol as fuel, thereby limiting its applications in the automotive
market. Hence, this will have a negative impact on the growth of the bio-butanol
industry.
Bio-Butanol Industry Outlook
Technology launches, acquisitions, and R&D activities are key strategies adopted by players in the Bio-Butanol Market. In the Bio-Butanol Market report, the bio-butanol top 10 companies are:
- Butalco Gmbh
- Energy Quest
- Butyl Fuel LLC
- Eastman Chemical Company
- Cobalt Technology
- Gevo
- Cathy Industrial Biotech Limited
- Cobalt Technology
- Granbio
- Abengoa
Recent Developments
- In September 2021, Gevo has entered into an asset purchase agreement with Butamax Advance LLC Biofuel, which will make Gevo the sole entity with full rights to sublicense the entire Gevo/Butamax isobutanol and isobutanol derivatives patent estate in the fields of fuels and chemicals.
- In May 2021, the U.S. Department of Energy’s Advanced Research Projects Agency-Energy (ARPA-E) awarded US$$1.6 million to researchers from The Grainger College of Engineering to develop engineered microbial consortia for advanced and efficient biofuel production from renewable biomass.
- In November 2020, Researchers at Imperial College developed a membrane-based extraction system for the production of cheap and efficient biofuels by using thin-film composites membranes.