Global Aviation Biofuels Market Size Grows at a Staggering CAGR of 12.7%

Introduction

Biofuels are an attractive option in the domain of renewable energy. These biofuels are utilized in various applications, including transportation, heating, power generation, and cooking. There are now two types of biofuels based on their sources. The first-generation ones are derived from plants high in sugars or starch, such as sugar cane and corn. These crops can be treated to remove the sugar from which ethanol is produced. Similarly, second-generation biofuels are generated from oil plants (such as algae, jatropha, halophytes, and amelina) or municipal trash. These goods meet sustainability standards and are suitable for use in the aviation industry.

Market Dynamics

Rising Environmental Awareness and Sustainability Issues Drive the Global Market

Biofuels are fuels made from plant matter that, when burned, release a similar amount of carbon dioxide (CO2) as the plants take during photosynthesis. As a result, biofuels have an extremely low carbon footprint throughout their life cycle. However, the gear and processes required to cultivate the crops, transport the raw materials, and refine the fuel all contribute to emissions. Despite this, it is anticipated that many biofuels would cut overall CO2 emissions relative to fossil fuels by a significant amount, perhaps as much as 80%. Since biofuels often contain fewer impurities, such as sulfur, they can further reduce emissions of pollutants like sulfur dioxide and soot.

Government Incentives and Support Creates Tremendous Opportunities

Government incentives and assistance are critical in growing the aviation biofuel business by providing financial incentives, policy frameworks, and regulatory guidelines to encourage the study, development, production, and use of sustainable biofuel. The government's acknowledgment of the urgent need to combat climate change and cut carbon emissions within the aviation sector, which contributes heavily to greenhouse gas emissions, is driving these incentives.

One important part of government assistance is financial incentives, which are frequently provided through subsidies, tax credits, grants, or low-interest loans. These measures lower the financial burden on biofuel producers and investors, making investing in sustainable aviation biofuel initiatives more appealing. By lowering production costs, these incentives help make biofuels more competitive with traditional jet fuels, which are normally less expensive.

Regional Analysis

North America is the most significant global aviation biofuels market shareholder and is anticipated to expand significantly during the forecast period. The North American region has become the primary market for aviation biofuels due to various factors that highlight the region's dedication to promoting sustainability and environmental accountability within the aviation industry. North American nations, namely the United States and Canada, have exhibited robust regulatory backing for sustainable aviation fuels. The Federal Aviation Administration (FAA) in the United States has proactively promoted the utilization of biofuels, providing incentives and standards to facilitate their integration. Furthermore, it is worth noting that North America possesses a substantial and well-established aviation industry characterized by many prominent airlines and airports. This phenomenon generates a significant need for aviation biofuels and promotes the establishment of local production and distribution systems.

Key Highlights

• The global aviation biofuels market size was valued at USD 101.23 billion in 2022. It is projected to reach USD 334.91 billion by 2031, registering a CAGR of 12.7% during the forecast period (2023-2031).
• Based on type, the global aviation biofuels market is segmented into Fischer-Tropsch (FT) biofuels and hydroprocessed esters and fatty acids (HEFA) biofuels. The Fischer-Tropsch (FT) biofuels segment is the most significant shareholder and is expected to grow significantly over the forecast period.
• Based on application, the global aviation biofuel market is divided into commercial and military. The commercial aviation segment dominates the global market and is expected to grow substantially over the forecast period.
• North America is the most significant global aviation biofuels market shareholder and is anticipated to expand significantly during the forecast period.

Competitive Players

Competitive Players

The major players in the global aviation biofuels market are Neste, Gevo, World Energy, Eni, Aemetis, SkyNRG, Velocys, Fulcrum BioEnergy, and Indian Oil Corporation.

Recent Developments

Market News

• In March 2023, Boeing unveiled a significant collaboration with the U.S. Department of Energy (DOE) and six national laboratories, marking a crucial step in the advancement and commercialization of sustainable aviation fuels (SAF) in the United States. The primary objective of this partnership is to establish a resilient and efficient supply chain for SAF within the country. Equally important, it aligns with the aviation industry's ambitious objective of attaining net-zero carbon emissions by 2050.
• In April 2023, Airbus launched a new initiative called "Airbus ZEROe" to explore the potential of hydrogen as a zero-emission fuel for aviation. The initiative will involve developing and testing three hydrogen-powered aircraft concepts, which are expected to enter service by 2035. Airbus believes that hydrogen can offer a clean and efficient solution for reducing the environmental impact of aviation.

Segmentation

Global Aviation Biofuels Market: Segmentation

By Type

• HEFA (Hydroprocessed Esters and Fatty Acids)
• HVO (Hydrogenated Vegetable Oil)
• FT (Fischer-Tropsch)
• SIP (Synthetic Iso-Paraffins)
• ATJ (Alcohol-to-Jet)

By Applications

• Military
• Commercial

By Regions

• North America
• Asia-Pacific
• Europe
• The Middle East and Africa
• Latin America