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Marine Biofuel Market

Market Study on Marine Biofuels: Use of Vegetable Oil Feedstock to Rise Substantially

Marine Biofuel Market

Marine Biofuel Market Outlook (2023 to 2033)

As per a detailed industry report by Persistence Market Research, the global marine biofuel market reached a size of US$ 3.11 billion in 2018. Y-o-Y market growth was recorded at 5.7% in 2022 with market revenue estimated at US$ 3.71 billion in 2023. The study predicted the market to reach US$ 7.62 billion by the end of 2033, expanding at 7.5% CAGR between 2023 and 2033.

Marine fuel, also known as ship fuel or bunker fuel, is a type of fuel used to power different types of ships and boats, such as cargo ships, container ships, cruise ships, and other maritime transportation vehicles. Unlike gasoline, marine fuel is specially produced to meet the specific requirements of marine engines and the conditions that long-distance sea travel has to endure.

Marine fuels come in a variety of grades and types, each with distinctive characteristics and properties. heavy fuel oil (HFO), maritime diesel oil (MDO), low-sulfur marine fuel, liquefied natural gas (LNG), and marine biofuel are the most popular forms of maritime fuel.

Marine biofuel refers to a type of renewable fuel derived from organic materials that are sourced from aquatic sources such as algae, seaweed, and other marine biomass. These fuels are considered an environment-friendly alternative to traditional fossil fuels since they can significantly reduce greenhouse gas emissions and dependence on finite petroleum resources.

Attribute Details
Marine Biofuel Market Size(2022A) US$ 3.5 Billion
Estimated Market Value (2023E) US$ 3.71 Billion
Projected Market Value (2033F) US$ 7.62 Billion
Value CAGR (2023 to 2033) 7.5%
Collective Value Share: Top 3 Countries (2023E) 35.9%
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Sales Analysis of Marine Biofuel (2018 to 2022) vs. Industry Projections (2023 to 2033)

The study reveals that from 2018 to 2022, the global marine biofuel market expanded at a compound annual growth rate (CAGR) of 3%. Increased emphasis on sustainability and reduced carbon emissions in the maritime sector due to government regulations, such as the International Maritime Organization's (IMO) sulfur emission cap, has significantly boosted the adoption of marine biofuel as a sustainable fuel over the past few years.

Robust advancements in biofuel production technology, feedstock diversification, and refining processes to improve fuel efficiency and reduce the cost of biofuels have also led to an increase in the consumption of marine biofuels across the globe.

Worldwide sales of marine biofuel are forecasted to exhibit a growth rate (CAGR) of 7.5% during the forecast period (2023 to 2033. Rising regulatory pressures and compliance are expected to complement market expansion over the coming years.

Stringent regulatory frameworks aimed at curbing air pollution and promoting sustainable maritime practices are propelling the growth of the global market.

  • The International Maritime Organization (IMO) has set strict guidelines to reduce the sulfur content in marine fuels, driving the adoption of cleaner alternatives like biofuels.
  • Several regional initiatives, such as the European Union's Green Deal and the United States' Clean Shipping Act, are placing further pressure on ship operators to adopt low-carbon solutions.

As compliance with these regulations becomes vital, marine biofuels are set to offer a compelling way for the industry to align with evolving global standards and avoid penalties.

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Why is Consumption of Marine Biofuel Set to Rise Significantly?

“Expanding Marine Transportation Industry Demanding Cleaner Fuels”

Ships account for over 80% of the world’s trade, including food, medicine, and other essential items, making shipping a crucial industry for the global economy. However, they also contribute to a significantly large share of energy consumption and produce a large amount of greenhouse gases. Increasing adoption of biofuels and blends of biofuels with conventional petroleum products can considerably reduce the environmental damage caused by the shipping industry.

Current trends in the market suggest that the most promising option, from a technical point of view, are low-percentage biodiesel blends (nearly up to 20%) with marine gas oil or marine diesel oil (MGO/MDO), as these blends are compatible with current diesel engines. Research is ongoing for the development of alternative biofuels such as bio-methanol, which could be an excellent option to replace conventional fuels for marine applications.

“Market Benefiting from Substantial Technological Advancements and Research Investments”

Continuous advancements in biofuel production technologies are bolstering the viability and competitiveness of the marine biofuel market across the world. Extensive research efforts are focused on optimizing feedstock cultivation, refining processes, and scaling up production capacities. Innovations such as genetic engineering of algae strains for higher lipid content and improved conversion methods are increasing the efficiency of biofuel production.

These technological advances are lowering product prices, boosting energy outputs, and addressing scalability issues, making marine biofuel an increasingly attractive option for ship operators who are interested in switching to more sustainable fuel sources.

The market is also witnessing the emergence of diverse feedstock options and hybrid fuel blends. While algae and seaweed remain prominent sources, other unconventional feedstocks such as waste fats and residues from industries are also being explored. Hybrid blends that combine marine biofuels with conventional fuels or other renewable energy sources are gaining traction.

All these developments are aimed at optimizing fuel properties, reducing emissions, and enhancing compatibility with existing engines and infrastructure. The trend toward innovative feedstocks and blends underscores the industry's commitment to maximizing sustainability and efficiency.

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What Can Dent Market Growth to Some Extent?

“Lack of Feedstock Availability and Developed Infrastructure”

Disruption in the availability of raw materials required for biofuel production is one of the main factors restraining the growth of the market for alternative fuels, as most energy crops are seasonal and offer less shelf life for the production of fuel. The diversity of potential feedstock sources for marine biofuel production offers an opportunity to mitigate supply chain risks and improve sustainability.

Algae, seaweed, and waste materials such as agricultural residues and food waste can be utilized to produce biofuels, reducing dependence on a single feedstock. This diversification helps prevent resource scarcity issues and minimizes the competition between biofuel production and food production. By tapping into a variety of feedstock sources, marine biofuel manufacturers can achieve greater resilience and contribute to a more circular and sustainable economy.

Marine biofuel also requires specialized infrastructure for production, storage, and distribution. Retrofitting or building new infrastructure to accommodate the unique properties of biofuels, such as their compatibility with existing marine engines and fueling systems, can be both complex and costly. Establishing a robust supply chain for marine biofuels to reach various ports and regions can pose several logistical challenges.

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Country-wise Insights

United States Predicted to Dominate Global Marine Biofuel Market

The U.S. is estimated to be one of the prominent countries in the global marine biofuel market. The country accounts for a significant share of the global market and is projected to progress at a CAGR of 7.5% through 2033.

Growth of the U.S. marine biofuel market is primarily driven by stringent environmental regulations aimed at reducing emissions from the maritime sector, thereby fostering the adoption of cleaner fuel alternatives. These include the International Maritime Organization's emission reduction targets and the U.S. Environmental Protection Agency's regulations.

Growing awareness of climate change and air quality issues, along with advancements in biofuel technology and the availability of diverse feedstocks such as algae and waste cooking oils, is accelerating market expansion, since manufacturers are seeking sustainable technology solutions to address both regulatory compliance and environmental concerns.

Germany to Offer Lucrative Opportunities for Marine Biofuel Suppliers

The marine biofuel market in Germany is projected to expand at a CAGR of 6.9% during the forecast period. Development of the German market is being propelled by a combination of stringent emissions regulations, such as the European Union's regulations and the International Maritime Organization's targets, which have compelled maritime industry stakeholders to seek cleaner fuel options, resulting in increased interest in biofuels.

Germany's strong commitment to environmental and marine sustainability, energy innovation, and technology research has fostered the demand growth for marine biofuels, while the availability of diverse feedstocks such as rapeseed oil and advanced production techniques has also catalyzed market expansion as manufacturers aim to reduce carbon emissions, enhance energy security, and align with global sustainability goals.

Category-wise Insights

Emergence of FAME Biodiesel as Key Fuel Type

FAME biodiesel, also known as fatty acid methyl ester biodiesel, has emerged as a prominent fuel type in the global biofuel market due to its numerous advantages and compatibility with existing infrastructure. This renewable fuel type holds significant potential to lead the market for several reasons.

One of the key advantages of FAME biodiesel is its compatibility with existing diesel engines and distribution systems. This means that it can be seamlessly blended with conventional diesel fuel and used in existing vehicles and machinery without requiring major modifications. This compatibility facilitates a smoother transition to cleaner fuels without the need for extensive infrastructure overhauls.

Many countries have implemented regulations and incentives to promote the use of bio-based fuel as part of their commitment to reduce emissions. FAME biodiesel's established presence and compatibility with existing regulations make it a favorable choice for market players looking to meet these standards.

Vegetable Oil to Remain Leading Feedstock for Manufacturing Marine Biofuel

The vegetable oil feedstock segment is anticipated to lead the global marine biofuel market during the forecast period. The segment is projected to expand at a CAGR of 8.6% between 2023 and 2033.

Vegetable oils such as soybean oil, palm oil, rapeseed oil, and others are derived from crops such as soybeans, canola, and palm, which are renewable resources. Vegetable oil-based biofuels, including biodiesel, can be easily blended with conventional diesel fuel without requiring significant changes to existing engine technologies or distribution systems. This compatibility helps streamline the transition to cleaner fuels, making it an attractive option for the marine industry.

These biofuels also have a lower carbon footprint as compared to conventional fossil fuels. When produced and utilized responsibly, they can contribute to substantial reductions in greenhouse gas emissions, aligning with global efforts toward climate change mitigation.

Competitive Landscape

The market for marine biofuels is in the developing phase where new manufacturers are entering the market through collaborations and the expansion of their production facilities. Many of the market entrants are focusing on the reliable supply of raw materials and optimizing their operations to produce biofuels economically. Several market players are focusing on establishing production facilities close to marine bunkers for the easy transportation of the product.

Companies that actively invest in research and development to address technical challenges, such as fuel stability, compatibility, and performance in marine engines, are better positioned to offer high-quality biofuels that meet industry standards.

  • In August 2022, Chevron Renewable Energy Group announced the expansion of its Emden, Germany biorefinery by installing a pretreatment system at the facility. This system will allow the company to utilize a broader variety of feedstock for the production of biodiesel.
  • In May 2022, Neste, with its partner Nordic Marine Oil, introduced a co-processed marine fuel that enables up to 80% GHG emission reduction.

Marine Biofuel Industry Report Scope

Attribute Details
Forecast Period 2023 to 2033
Historical Data Available for 2018 to 2022
Market Analysis
  • USD Million for Value
  • Kilo Tons for Volume
Key Countries Covered
  • U.S.
  • Canada
  • Brazil
  • Mexico
  • Germany
  • Italy
  • France
  • U.K.
  • Spain
  • Russia
  • China
  • Japan
  • South Korea
  • India
  • Australia and New Zealand
  • Gulf Cooperation Council Countries
  • Türkiye
  • South Africa
Key Market Segments Covered
  • Fuel Type
  • Feedstock
  • Form
  • Vessel Type
  • Region
Key Companies Profiled
  • ExxonMobil
  • BP plc
  • Cargill
  • Neste Oil
  • Chevron Corporation
  • World Energy
  • GoodFuels
  • Uniper Energy
  • Dansuk Industrial
  • Cepsa
  • Gevo
  • TotalEnergies
  • UPM
  • Emami Group
  • Other Key Players
Report Coverage
  • Market Forecast
  • Company Share Analysis
  • Competition Intelligence
  • Drivers
  • Restraints
  • Opportunity Analysis
  • Challenges
  • Strategic Growth Initiatives
Customization and Pricing Available Upon Request

Marine Biofuel Industry Research Segmentation

By Fuel Type:

  • FAME (Biodiesel)
  • HVO (Renewable Diesel)
  • Ethanol
  • Biomethanol
  • BioLNG
  • Others

By Feedstock:

  • Sugarcane
  • Corn
  • Vegetable Oil
  • Castor Oil
  • Biomass
  • Others

By Form:

  • Liquid
  • Gas

By Vessel Type:

  • Passenger
  • Cargo
  • Military
  • Others

By Region:

  • North America
  • Latin America
  • Europe
  • East Asia
  • South Asia and Pacific
  • Middle East and Africa

- Companies Covered in This Report -

  • ExxonMobil
  • BP plc
  • Cargill
  • Neste Oil
  • Chevron Corporation
  • World Energy
  • GoodFuels
  • Uniper Energy
  • Dansuk Industrial
  • Cepsa
  • Gevo
  • TotalEnergies
  • UPM
  • Emami Group

- Frequently Asked Questions -

Marine biofuel is a renewable fuel derived from organic materials sourced from algae, seaweed, and other marine biomass.

The global marine biofuel market is estimated at US$ 3.71 billion in 2023.

FAME (biodiesel), HVO (renewable diesel), ethanol, biomethanol, and bioLNG are the main types of marine biofuels.

The global marine biofuel market expanded at a CAGR of 3% between 2018 and 2022.

The market for marine biofuels is projected to reach US$ 7.62 billion by the end of 2033.

The global market is projected to expand at a CAGR of 7.5% from 2023 to 2033.

FAME (biodiesel) is estimated to lead global market expansion over the coming years.

BP plc, Cargill, Neste Oil, Chevron Corporation, and TotalEnergies together account for 45% to 50% market share.

China, the U.S., Germany, India, and Japan are leading consumers of marine biofuel.

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