Algae Biofuel Market

Market Overview

The global algae biofuel market size was valued at USD 7.23 billion in 2021 and is projected to reach USD 15.39 billion by 2030 at a CAGR of 8.76% from 2022 to 2030.

Algae fuel, also known as algal biofuel or algal oil, is a liquid fossil fuel substitute derived from algae. Algae fuels are an alternative to conventional biofuels such as corn and sugarcane. It is referred to as seaweed fuel or seaweed oil when it is produced from seaweed. Algae products are single-celled aquatic plants with abundant nutritive and nourishing properties that are utilized in dietary supplements, personal care, and pharmaceuticals.

Market Dynamics

Algae Biofuel Market Drivers

• Higher Demand is Driving the Market

During the forecast period, the algae biofuel market trend is anticipated to be bolstered by the growth of the detergent industry in emerging economies, the demand for fuel from a variety of end-use sectors, and the need for green and sustainable energy sources. In addition, the rapid expansion of the algae biofuel industry due to the growing demand for fuels in a variety of end-use industries, as well as the rising demand for green and sustainable energy sources, is expected to accelerate market growth.

Increasing demand for low-cost fuels in the aviation industry will further accelerate the market growth rate for algae biofuel. In addition, the expansion of end-use industries is anticipated to contribute to the growth of the market. Continuous efforts to find cost-effective and sustainable fuel alternatives in order to meet international aspirations for carbon neutrality are likely to create new opportunities for the expansion of the algae biofuel industry.

• The Need For Greener Alternatives to Fuel is Driving the Market

As a result of the global search for greener, renewable alternatives to biofuels, the use of biofuels in the third generation is on the rise. Algae biofuel has become a distinct alternative, surpassing the limitations of second-generation biofuels derived from crops. Algae such as Chlorella species, Botryococcus braunii, Crypthecodinium cohnii, and Nitzschia are utilized to produce biofuel. The application of contemporary biochemical engineering techniques has also resulted in the formation of a solid technological foundation for the same. Algae biofuel production is being made economically and environmentally viable through ongoing research and industrial efforts.

Restraints For The Algae Biofuel Market

• High Cost Of Production And Lack Of Technology Poses A Threat

Due to the high cost of production, producing algae biofuels at a large scale presents numerous obstacles. During the forecast period, this factor is anticipated to restrain the market growth. The extraction of algal oil presents a significant obstacle for the algae biofuel market. Currently, hexane extraction, CO2 fluid extraction, and oil expellers are the three most important techniques for the extraction of algal oil. Although these technologies are effective for the production of algal oil, they are very costly because they require expensive equipment and high energy consumption, which increases the price of the final product. It is anticipated that the inability of these processes to produce large volumes at a low price will impede the market's growth over the forecast period.

Opportunities For The Algae Biofuel Market

• Government Initiatives Are Expected to Bring in New Opportunities

Increasing government initiatives for capacity expansion and tax incentives are anticipated to significantly drive market growth for biodiesel over the forecast period. As biodiesel is a highly energy-efficient fuel, it aids in mitigating energy security risks and pollution caused by the use of fossil fuels. Countries including Brazil, Germany, and the United States have implemented tax incentives to increase the production of biofuels and lower the price of biodiesel at the pump. In addition, European nations such as France, Italy, Germany, Spain, Denmark, and the Czech Republic exempt biodiesel production from all taxes up to a certain volume.

In addition, increasing government initiatives for the adoption of renewable energy sources and the reduction of carbon emissions are anticipated to create lucrative opportunities for market participants during the period between 2022 and 2030. In addition, the increasing development of innovative factors such as an increase in the final production volume of biofuels and the increased development of raw materials, among others, will contribute to the expansion of the algae biofuel market in the coming years.

Regional Analysis

North America dominates the algae biofuel market in terms of market share and market revenue, and its dominance is projected to increase during the period from 2022 to 2030.

The market growth in this region can be attributed to the increasing preference for renewable energy sources and the expanding use of these sources in various industries. In addition, the shifting dynamics of crude oil have created an opportunity for investment in North American alternative fuel technologies. Continuous investments in R&D by manufacturers to utilize the maximum photosynthetic efficiency of algae strains are resulting in an increase in the extraction of algae oil, which is anticipated to have a positive impact on the growth of the market over the forecast period. The U.S. government has mandated a shift from food-based crops to microalgae-based crops in biofuel production, which is expected to increase demand for biofuel over the forecast period.

Asia-Pacific, on the other hand, is anticipated to experience lucrative growth between 2022 and 2029 due to the expansion of the automotive industry and the region's rapid economic growth.

Segmental Analysis

The algae biofuel market can be segmented on the basis of type, application, competitors, and region. One-third of the world's energy consumption was comprised of petroleum fluids, such as jet fuel, diesel, gasoline, and fuel oil, and this demand is anticipated to increase over the forecast period. The rapid expansion of the automotive industry as a result of rising consumer incomes and technological advances is anticipated to increase the demand for sustainable raw material sources such as algae.

The increasing demand for biofuel in road transport applications, such as small trucks, minivans, light-duty vehicles, motorcycles, and passenger vehicles, is anticipated to compel manufacturers to invest more in R&D to develop low-cost renewable fuel sources. During the forecast period, it is anticipated that the aforementioned factors will create new market opportunities for product growth in transportation applications.

Growing demand for alternative liquid fuel products in the commercial aviation sector and military applications is anticipated to be a major factor driving market growth during the forecast period. The growth of the industry is likely to be fueled by initiatives taken by manufacturers to meet required fuel standards and a positive outlook from the government.

The Hexane Solvent Method (combined with Algae Squeezing) can separate up to 95% of oil from green growth. First, the oil is extracted using a hydraulic press. At this point, additional Algae is combined with hexane, separated, and cleaned so that there are no synthetic compounds left in the oil.

The Supercritical Fluids Methods can remove up to 100 percent of the oil from green vegetation. Carbon dioxide is a supercritical liquid that occurs when a substance is pressurized and heated to the point where it changes from a solid to a liquid-like state. Algae are now combined with carbon dioxide.

Transesterification is the process by which extracted oil is refined using unsaturated fat chains. In this instance, a catalyst, such as sodium hydroxide, is combined with methanol. This results in a biodiesel fuel containing glycerol. To remove the glycerol, the mixture is refined. Green growth biodiesel fuel is the final component.

Recent Developments

• In March of 2021, Triton Algae Innovations introduced plant-based algae ingredients and its first retail product, a tuna substitute. Chlamydomonas reinhardtii is the species of single-celled Chlamydomonas algae that the company uses. It is produced through a heterotrophic process that is scalable and cost-effective. The nature of these items is non-GMO.
• In February of 2020, Reliance Life Sciences announced that it would spearhead several algae-based projects, including the conversion of organic waste into kerosene and aviation fuel. Additionally, Reliance utilizes advances in gene editing to significantly increase the production capacity of algae.
• The partnership between ExxonMobil and the Indian Institute of Technology was announced in October 2019. Two locations of the institute, Madras, and Mumbai, signed five-year agreements with a focus on advancing research in biofuels and bio-products, gas transport and conversion, climate and environment, and low-emissions technologies for the energy and industrial sectors.
• ExxonMobil announced in October 2017 the expansion of its New Jersey, U.S.-based research facility. This facility would be dedicated to the research and development of algae biofuel and carbon capture technologies.