Bioenergy Market - Growth, Trends, COVID-19 Impact, and Forecasts (2022 - 2027)

Bioenergy Market - Growth, Trends, COVID-19 Impact, and Forecasts (2022 - 2027)

The installed capacity for bioenergy is expected to reach 220.4 GW by 2027, registering a CAGR of more than 6.8% during 2022 to 2027. Energy generated using bio-based renewable sources such as biofuel, biogas, biomass, and other bio-organic wastes is known as bioenergy. Lockdowns imposed across the world in 2020 and the first quarter of 2021 due to the COVID-19 pandemic resulted in a temporary ban on import and export and manufacturing and processing activities across various industries, which decreased the demand for bioenergy and related products from these consumers. The demand has been recovering since the second quarter of 2021. The growth in the bioenergy market can be attributed to the increasing shift toward renewables and other non-fossil fuel-based energy sources, such as solid biomass, biogas, and others. Factors such as the increasing demand for energy, advancements in bioenergy conversion technologies, increasing investments in bioenergy, and declining electricity generation costs from bioenergy facilities are expected to drive the market during the forecast period.

Key Highlights

• Solid biomass dominated the bioenergy market in 2021, and it is expected to continue its dominance during the forecast period, owing to its cost competitiveness in the production of bioenergy.
• Emerging waste-to-energy technologies, such as Dendro Liquid Energy (DLE), a recent German innovation in the biological treatment of waste, present high potential in the bioenergy field, being a close to ‘zero-waste’ technology.
• Europe dominated the market across the world, with the majority of the demand coming from countries such as Norway, Germany, and the United Kingdom.

Key Market TrendsBiomass is Expected to Dominate the Market

• Bioenergy is energy derived from biological materials that are characterized as organic materials with stored chemical energy like wood and manure.
• According to the International Renewable Association, the annual global demand for biofuels is set to grow by 28% by 2026, reaching 186 billion liters.
• In 2020, bioenergy electricity generation increased by 53 TWh (+8%) from 2019, and it has accounted for more than 70% of the bioenergy installed capacity across the world.
• Biomass supply comes from a variety of feedstock – wood fuel, forestry residues, charcoal, pellets, agri-culture crops and residues, municipal and industrial waste, biogas, biofuels, etc. Broadly, the supply can be classified into three main sectors – forestry, agriculture, and waste.
• In 2020, more than 60% of the biopower generation in Europe came from solid biomass sources, such as wood chips and wood pellets, and around 20% came from municipal waste, followed by 15% from biogas. Similarly, electricity generated from biomass and waste accounted for approximately 2% of the total electricity generation in the United States.
• Adding to this, a similar trend has been witnessed in emerging countries, such as India and Indonesia. The biomass power generation capacity in India has rapidly grown over the last few years as the Indian government focuses on increasing power generation through renewable energy sources.
• Therefore, with the increasing demand for renewable energy sources across the world, biomass-based electricity generation is expected to witness a significant growth rate during the forecast period.

Europe is Expected to Dominate the Market

• As of 2020, Europe is the world leader in producing heat from biomass in power plants, with a share of 87% globally, followed by Asia at 8%.
• Bioenergy is expected to remain crucial over the next decade to reach renewable energy targets in 2030, which is why the European Union (EU) member states incorporated the bioenergy option in their National Renewable Energy Action Plans (NREAPs).
• Biomass is an essential renewable energy source and is a key factor in reaching the European climate targets in 2020 and toward 2030, where 32% of the energy consumption within the EU must originate from renewable energy sources.
• Bioenergy contributed to 6% of the total renewable energy power generation in Europe in 2020. Germany produced 7.5% of its total electricity from biomass or bioenergy in 2020.
• Germany is one of the leading countries in bioenergy, which had more than 8000 biogas plants till 2020, and it is expected to operate more plants during the forecast period. By 2022, the country has plans to procure nearly 40,000 MWh of electricity from 86 biogas cogeneration units.
• Further, countries like Italy are likely to support the region's growth in the bioenergy sector. In July 2020, BTS Biogas Srl, one of the market leaders in the biogas sector, and Engie signed a Memorandum of Understanding (MOU) under which the two companies are planning to share expertise and resources to expand decarbonization efforts starting in Italy and expanding throughout Europe. The agreement is expected to create a shared project pipeline for the two companies, allowing both to maximize their considerable experience in developing, constructing, and managing facilities that create renewable natural gas from organic waste.
• Hence, with the upcoming projects and the targets to achieve a carbon-neutral environment during the upcoming years, the region is expected to have dominancy during the forecast period.

Competitive Landscape

The bioenergy market is moderately fragmented. Some of the major bioenergy technology providers and plant owners include Mitsubishi Heavy Industries Ltd, Hitachi Zosen Corp., BTG Biomass Technology Group, Babcock & Wilcox Volund AS, Biomass Engineering Ltd, and Orsted AS.

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