The global bioenergy market was worth USD 116.5 billion in 2021. It is expected to reach USD 229 billion by 2030, growing at a CAGR of 7.7% during the forecast period (2022–2030). Bioenergy is the energy produced from organic matter, known as biomass, in the form of electricity or gas. In other words, biomass energy refers to those crops, residues, and other biological materials used as an alternative to fossil fuels in producing energy and other products. The bioenergy market's growth can be attributed to the increasing shift toward renewables, increasing demand for energy targets to reduce carbon emission, advancements in bioenergy conversion technologies, increasing investment in bioenergy, and declining electricity generation costs from bioenergy facilities.
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Several developed and developing countries are adopting mandatory biofuel policies and have set biofuel targets to enhance energy security and contribute to climate change mitigation, apart from helping develop the agriculture sector. Mandates and incentives for blending biofuels with fossil fuels contribute significantly to the ongoing growth in biofuels production and use. Most biofuels are currently consumed by combining with fossil fuels at low percentages (typically less than 10% by volume or energy). The demand for biofuel has significantly increased over the past decade by policies like the Renewable Energy Directive (RED) and the Fuel Quality Directive of the European Union region, which have regulated necessary biofuel share for the transport sector. Additionally, governmental organizations are looking to increase jet fuel blend amounts. In October 2018, the Norwegian government announced airlines operating in Norway must blend 0.5% of advanced biofuel with aviation fuel from 2020. The government's aim is that by 2030, 30% of airline fuel may be sustainable with climate benefits. The government ensures a market for alternative aviation fuels by establishing a blending requirement. This may facilitate technology and industry development in Norway, thus, driving the bioenergy market during the forecast period.
Government policies and targets are expected to play a crucial role in bioenergy development. In 2019, China regulated several approaches to increase power generation from bioenergy. For instance, China introduced a new clean-heat initiative expected to raise the deployment of biomass- and waste-fueled cogeneration plants. The most significant deployment is anticipated in areas with access to biomass resources and policies to phase out coal-fired boilers to improve air quality, thus driving the bioenergy market's demand. Additionally, energy-from-waste (EfW) deployment is growing strongly as urbanization and economic development lead to more municipal solid waste (MSW) production. EfW technology offers a solution superior to landfills for cities to manage municipal solid waste, and China has the highest installed EfW capacity globally. Global adoption of integrated resource management strategies could dramatically increase the deployment of incinerators and advanced conversion technologies. This development would reduce landfilling and associated methane emissions, while expanded landfill gas capture and energy production could further reduce waste management practices' carbon footprint. Such benefits of increasing/developing waste-to-energy (WTE) deployment are expected to drive the bioenergy market during the forecast period. Therefore, WTE technologies deployed at landfills, treatment plants, and farms offer an advantage. They may be part of an ongoing municipal or agricultural operation, thus, driving the demand for the bioenergy market.
The biomass supply chain is among the most significant factors of large-scale bioenergy production. A critical barrier to procuring initial funding for new developments on particular energy crops is in many instances. Most productions depend on complex transforming chains linked to feeding and food markets. The supply chain covers various aspects, from cultivation and harvesting of biomass to treatment, transportation, and storage. Effective supply chains are of utmost significance for bioenergy production, as biomass tends to have challenging seasonal production cycles and reduce mass, energy, and bulk densities. In addition, the demand for final products is often also dispersed, further complicating the supply chain, which, in turn, restrains the market growth. Together with identified challenges, the complexity is reflected in the shortcomings of current biomass supply chain models, whether they are comprehensive or target a single component of the supply chain. These models require a significant volume of data. Still, the modeled analysis has not been field-tested at a large enough scale to collect performance data in many cases. Such data collection is costly and time-consuming, thus negatively impacting the bioenergy market during the forecast period.
Waste-to-energy (WTE) turns organic waste material into heat or electricity used to power vehicles while saving the environment. The primary reason that waste-to-energy Technology (WTE) is so popular is that it converts solid waste substances, including paper and plastic, into energy cost-effectively and sustainably. Dendro Liquid Energy (DLE) is four times as efficient in generating electricity as anaerobic digestion (A.D.) and costs lesser. It is a global waste-to-energy technology market development because it generates zero waste. In addition, zero-emission discharge makes the plant facilities contaminated and unfit for activities. With the implementation of this zero-waste technology innovation in Germany, market participants expect better growth opportunities.
The global bioenergy market share is segmented by product, technology, and region.
By product type, the global bioenergy market is segmented into Biomass and Renewable Municipal Waste, Biogas, and Liquid Biofuels. Biomass and Renewable Municipal Waste is the largest segment, with over 34% of the total bioenergy installed capacity in 2021. The biomass in this segment refers to waste for heat or power generation through combustion. On the other hand, renewable municipal waste refers to organic garbage consisting of rotten vegetables, fruits, and other food items. Organic waste, a fraction of municipal solid waste (MSW), generates methane through processes like pyrolysis/gasification, incineration, anaerobic digestion, and landfill. An increase in waste to energy technology and demand for biomass, like pellets on the CHP plants, is the primary factor for the largest share. Biogas is a mixture of gases produced by breaking organic matter without oxygen. Processes such as anaerobic digestion and landfill generate biogas that primarily contains methane and carbon dioxide. The application of biogas has several advantages over the uses of various fossil fuels in multiple applications such as domestic stoves, CHP plants, transportation, and different commercial services like a greenhouse, which drives the market growth for the biogas segment. Regions like Europe and North America are a few prominent regions that have commercially introduced Liquid Biofuels in the transportation sector to replace conventional fossil fuels like diesel and petrol. Apart from the transportation sector, biodiesel and ethanol are used in power generators and power plants. Strict emission control by various countries and regions like Europe is expected to explain biodiesel's adoption in power generators. Emission standards such as Stage V emission limits for engines in non-road mobile machineries like generator sets above 560kW in Europe and emission limits for diesel engines used for generator sets up to 800 kW in India are a few standards that are likely to increase the use of biodiesel in power generators during the forecast period.
By technology, the global bioenergy market is segmented into Gasification, Fast Pyrolysis, Fermentation, and Other Technologies. Fermentation dominated the bioenergy market, with over 34% of the total bioenergy installed capacity in 2021. Furthermore, it will likely dominate the market during the forecast period due to its mature and widely accepted technology worldwide. Owing to extensive use in the industry and process requiring low temperature and pressure, fermentation produces over 98% yield with alternative feedstock options on the rise, such as Jatropha, animal fats, sludge, or waste cooking oil, coupled with a commercial value of co-products and tax incentives on biodiesel; these technologies are tracing popularity in the initial years of the forecast period itself. The critical market consumers for the biomass gasification segment are the small to large industries, the commercial sector, and rural communities. Asia-Pacific is anticipated to witness major growth attributable to industrialized economies like Japan, South Korea, India, and China. The impact of this growth is increased by changes in energy consumption, as half of the world population locates in this region. A significant share lives in rural areas, where biomass has been a predominant energy source, mainly for domestic use. Small-scale biomass gasification is found to supply electricity in rural areas. For example, in India, the Ministry of New and Renewable Energy (MNRE) has developed several biomass and bagasse cogeneration policies that widely use gasification for power generation. These government incentives have driven the demand for gasification over the forecast period. The Fast Pyrolysis segment in the boiler is expected to boost as the usage of pyrolysis oil can reduce carbon emissions by 90%. It can substitute natural gas and heavy & light fuel oils, thus increasing the demand for the market studied. Additionally, using pyrolysis in gas turbines and diesel engines to generate heat and power is likely to provide significant potential for the market. There are financial benefits to rural industry and agriculture for implementing distributed plants that can process biomass. Markets for biomass pyrolysis products are emerging, particularly in Asia and Europe. However, the growing application for pyrolysis technology in replacing a significant amount of fossil carbon is expected to boost the demand for the said market during the forecast period.
By region, the global bioenergy market is segmented into North America, Europe, Asia-Pacific, South America, and the Middle East and Africa. North America dominated the bioenergy market, with over 35% of the total bioenergy installed capacity in 2021. In the United States, the increasing consumption of biofuels and supportive government policies is anticipated to spur the market. Several initiatives have been taken by NREL (National Renewable Energy Laboratory) and the US Department of Energy in the sphere of the bioenergy sector. In July 2020, the Department of Energy (DOE) announced more than USD 97 million in funding for 33 projects, which would enhance research and development. The projects will improve the performance and reduce the cost and risk of technologies that can generate biofuels, biopower, and bioproducts from biomass and waste resources. Therefore, the bioenergy market is further expected, supported by technological advancements. Asia-Pacific is the fastest-growing region of the bioenergy market, with over 33% share of the total bioenergy installed capacity in 2021. China and India are expected to be significant renewable energy players due to their massive populations and increasing demand for energy. As of 2019, China is the global leader in renewable energy deployment. In July 2020, China joined the IEA Bioenergy Technology Programme (TCP) to lead a new era of bioenergy development in the country, which is expected to boost the share of bioenergy in the total renewable energy mix of the country. Japan is one of the largest renewable energy markets in Asia-Pacific. Solar, hydro, wind, and bioenergy are the primary renewable energy sources in the country. The country's bioenergy sources include methane, unutilized or waste wood, ordinary wood and agricultural waste, and a biogenic fraction of waste. Factors like supportive government policies and schemes, and renewable energy targets, are expected to drive the bioenergy installed capacity in Japan during the forecast period. Europe is the third-largest market, with over 16% of the total bioenergy installed capacity in 2021. Germany is one of the largest bioenergy markets in Europe in terms of installed capacity. The bioenergy installed capacity in Germany reached 8.92 GW in 2019, representing an increase of 3.8% compared to the previous year's value. Moreover, the only positive factor that can influence the growth in Germany's bioenergy sector is the phase-out of all nuclear facilities in the country by 2022. The country's plans to decommission all the nuclear power plants and elevate the share of renewable energy in the total power production mix are expected to drive the bioenergy sector in Germany during the forecast period.
The key players in the global bioenergy market include Mitsubishi Heavy Industries Ltd, MVV Energie AG, A2A SpA, Hitachi Zosen Corp, BTG Biomass Technology Group, Babcock & Wilcox Volund A/S, Biomass Engineering Ltd, Orsted A/S, Enerkem, and Fortum Oyj.