Algae Biofuel Market - Forecasts from 2024 to 2029

Algae Biofuel Market - Forecasts from 2024 to 2029

The algae biofuel market is evaluated at US$6.066 billion for the year 2022 and is projected to grow at a CAGR of 9.08% to reach a market size of US$11.152 billion by the year 2029.

Algal biomass is converted into a variety of fuels, such as biodiesel, bioethanol, and biogas, to produce algal biofuels, which are a promising renewable energy source. Algal biofuels are regarded as carbon-neutral, in contrast to conventional fossil fuels, since the CO2 absorbed during the development of the algae balances the CO2 released after burning. This makes them a desirable alternative for lowering greenhouse gas emissions and decreasing the effects of climate change.

The great production potential of algal biofuels is one of its main benefits. Algae are a more economical use of land and resources than traditional biofuel crops like maize or soybeans because they can generate far more biomass per acre. Furthermore, algae may be grown on non-arable soil and wastewater, which lessens the burden on freshwater supplies and lessens rivalry with food production.

MARKET TRENDS:

The key factor driving the growth is the demand for algae biofuel as an essential energy source. Owing to the rising prices of petrol and diesel, the demand for algae biofuel has increased. Moreover, increasing inclination towards eco-friendly lifestyles owing to their health benefits and fewer or no environmental hazards is boosting the demand for algae biofuel. As a result, all biofuels are referred to as a replacement for oil or another environmentally hazardous fuel.

Algae biofuel has the potential to provide around 20 times the output of other conventional biofuels like sorghum, beet, corn, and corn stover. This feature of algae biofuel has the potential to open new pathways for industrial growth during the forecast period.

MARKET DRIVERS:

Growth in applications in various end-user industries is anticipated to drive the market’s growth.

Algae biofuel has applications in the automotive, transportation, aerospace, and defense industries. It has come up as the best third-generation alternative to the second-generation crop-based biofuel. Increasing research and developments in algae biofuel are making it more applicable in many sectors and making its production more economical and viable.

Many industrial sectors have also started using algae biofuel commercially due to its increasing popularity in the last decade. Algae biofuel can be used to generate combined heat and power or can be used for pyrolysis oil. Algae biofuel is also preferred in transportation because it directly replaces petroleum without any changes in engine performance.
The convenience of producing algae biofuel is predicted to positively impact market growth.

As light is the prime factor needed for the cultivation of algae, investors are more interested in investing in the production of algae biofuel as the requirements are comparatively lower. Additionally, as algae biofuel is a competitive alternative to petroleum and diesel, its utilization will rise at substantial rates in the future, making algae biofuel a profitable investment. Countries that have huge waterbodies also prefer the production of algae biofuel.

Although the use of a few mediums can accelerate the production of algae biomass, the two most enriching mediums are Guillard’s F/2 and Walne medium. These mediums reduce the time required for the preparation of the nutrients that are needed to grow algae. Furthermore, various nutritive solutions, viability, profit to the investors, and most importantly, increasing popularity among the consumers for algae biofuel are all contributing to the rising demand for algae biofuel globally.

MARKET RESTRAINTS:

The algal biofuel market is severely constrained, which prevents it from being widely adopted and from growing. The high cost of manufacturing involved in growing, collecting, and turning algae into biofuel is one of the main obstacles. Algae need particular circumstances to develop well, including the right temperature, the availability of nutrients, and access to water supplies, all of which can increase production costs. Furthermore, large-scale algae cultivation and harvesting technology is still developing, which results in inefficiencies and higher operating expenses.

The low scalability of algae biofuel manufacturing is another constraint. As opposed to conventional biofuel crops like maize or soybeans, algae have the potential for higher yields per acre; nevertheless, ensuring consistent production at scale remains a considerable technical barrier. The consistent and effective production of algal biomass for the extraction of biofuel can be hampered by problems such as contamination, strain heterogeneity, and environmental volatility.

The full potential of algae biofuels as a sustainable substitute for traditional fossil fuels must be unlocked by addressing these constraints, which call for coordinated efforts from a variety of stakeholders, including legislators, researchers, and business leaders. These efforts must also include overcoming technical, financial, and regulatory obstacles.

North America is anticipated to be the major regional market.

Several important reasons are driving the noteworthy expansion of the algal biofuel industry in North America. For instance, there is a greater interest in renewable energy sources due to rising concerns about climate change and the need to minimize greenhouse gas emissions. Since it can trap carbon dioxide during production and has the potential to drastically lower overall carbon emissions when utilized as a transportation fuel, algae biofuel offers a possible substitute for fossil fuels.

Furthermore, algal biofuel's adaptability goes beyond fuels for transportation; it has potential uses in several industries, including industrial operations, aviation, and maritime transportation. This adaptability raises the market's appeal and chances of mass adoption. Algae-based products' adaptability, technical improvements, supporting regulations, and environmental concerns all contribute to the growth of the North American algae biofuel business, which presents itself as a viable and sustainable substitute.

Key Developments:

In March 2023, Viridos, Inc., the industry-leading algal biofuel business committed to producing low-carbon, sustainable jet and diesel fuel derived from algae, announced that it has secured a $25 million Series A equity investment. United Airlines Ventures and Chevron U.S.A. Inc. joined Breakthrough Energy Ventures (BEV) as lead investors in Series A. The money will go into R&D to boost algal oil productivity even further until it reaches levels that can be used for commercial purposes.

Segmentation:

By Type
Jet fuel
Bioethanol
Methane
Biodiesel
By Applications
Transportation
Aerospace
Others
By Geography
North America
USA
Canada
Mexico
South America
Brazil
Argentina
Others
Europe
United Kingdom
Germany
France
Spain
Others
Middle East and Africa
Saudi Arabia
UAE
Israel
Others
Asia Pacific
China
Japan
India
South Korea
Taiwan
Thailand
Indonesia
Others