Biofuels Market Competitive Landscape | Attractiveness Analysis and Porter’s Five Forces Model Analysis

Biofuels Market

Market Overview:

Biofuels are one of the best ways to deal with the energy security, environmental security, and economic security problems that come with being dependent on petroleum and petroleum products. In the last ten years, both the public and scientists have paid more attention to biofuels. This is because of things like rising oil prices, the need for more energy security, worry about glasshouse gas emissions from fossil fuels, and government subsidies.

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Biofuels are liquid or gaseous fuels that are mostly made from biomass. Some fossil fuels can be replaced with biofuels. So, governments have shown different levels of interest in bioenergy use, depending on their current policies and plans for the future. Biofuel crops are usually high in sugar (like sugarcane, sugar beets, and sweet sorghum), starch (like corn and cassava), or oils (Such As Soybeans, Rapeseed, Coconut, Sunflowers, And Palms). Brazil, the United States, France, Sweden, and Germany are the top five countries in the world when it comes to making and using biofuels. Countries around the world are now focusing on different biofuel crops and ways to turn them into fuel. The US turns corn into ethanol, Brazil turns sugar cane into ethanol, Europe turns canola into biodiesel, Indonesia turns palm oil into biodiesel, and China turns sweet potatoes and cassava into ethanol.

Market Restraint

Decreased investments in the biofuels sector

In 2019, investments in the ability to make liquid biofuels dropped by about 30%. This was mostly because of changes in China, where investments in ethanol production facilities were half of what they were the year before. China has stopped the extension of its 10% ethanol-blending mandate across the country. This is to keep maize production from becoming too competitive and to make sure there is enough food for everyone. Some new provinces are still putting 10% blending into place, so investment in China could pick up in 2020. This could be helped by the fact that new facilities are already being built.

In the United States and Brazil, investments in facilities that make ethanol have continued to be driven by government policies. The Renewable Fuel Standard (RFS2) is the main federal policy in the United States that encourages people to use biofuels. Brazil’s economy is growing thanks to the new RenovaBio programme. But because people are buying less gasoline, the United States and Brazil are planning to stop making biofuels in 2020, which will make it harder to invest in the near future.

Market Opportunities:

Technology Advancements in Biofuels

Petroleum oil is one of the most important ways to get energy around the world. The transportation industry uses more than 70% of all petroleum fuel. Because oil use is going up so quickly, it is thought that the world will run out of oil between 2070 and 2080. Greenhouse gas emissions (GHG), which include CO2 and other harmful gases like methane, carbon monoxide, and chlorofluorocarbons, have made people worried about health and global warming. By 2040, there could be more than 43 billion metric tonnes of glasshouse gases in the air. Because of this, we need other sources of power that are easy to get, renewable, and available.

Biofuels are being made to replace petroleum because they are safe, biodegradable, and don’t contain sulphur. They also come from sources that can be used again and again. Based on what they are made from, biofuels can be put into four groups: 1st, 2nd, 3rd, and 4th generation biofuels. The first type of biofuels are made from plants that make oil, sugar, and starch. Since they were first used in 1996–1997, the number of genetically modified crops has continued to grow. The first generation of biofuels adds to the debates about nutrition and fuel. However, the second generation of biofuels, which are made from sustainable lignocellulosic biomass, makes people less worried about food safety. Second-generation biofuels are non-food products that are mostly made from waste from farms and forests. Third-generation biofuels made from algae are getting a lot of attention because they can be made on a large scale, absorb CO2, and are easy to refine. The fourth generation of biofuels, which is a new field that is growing quickly, uses engineered cyanobacterial development.

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