April 12, 2024
India Biofuels Market

India Biofuels Market Is Expected To Be Flourished By Growing Transportation Sector

Biofuels are renewable fuels produced from biomass feedstock, such as sugarcane, corn, vegetable oils and animal fats. Biodiesel and bioethanol are widely used biofuels that are blended with conventional fossil fuels such as petrol and diesel. Biodiesel can be used as an additive with petroleum-based diesel or in its pure form. Bioethanol is used as an alternative fuel for vehicles, either directly in flex fuel vehicles or more commonly as an additive to gasoline. India is focusing on ethanol blending program to reduce oil import dependence and provides remunerative prices to sugarcane farmers. Biofuels have great potential in India due to availability of large tracts of cultivable land and biomass residues. The government is also providing various incentives to promote setting up of biofuels production facilities.

The India biofuels market was valued at US$ 2.56 Bn in 2023 and is expected to exhibit a CAGR of 22% over the forecast period 2023 to 2030, as highlighted in a new report published by CoherentMI.

Market Dynamics:

One of the major drivers for growth of India biofuels market is growing transportation sector. As India’s economy is growing rapidly, demand for personal vehicles as well as freight transport is increasing at a fast pace. This is significantly raising fuel consumption in the country. Biofuels provide a sustainable solution to meet this growing energy demand from transportation sector. By blending biofuels like bioethanol and biodiesel with conventional fuels, dependency on imported crude oil can be reduced. This is promoting growth of biofuels market in India. Moreover, government is also providing various incentives under ongoing National Biofuels Policy and ethanol blending program to encourage setting up of new biodiesel and bioethanol production units. This is aiding expansion of biofuels production capacity and market in India.

Segment Analysis :

The India biofuels market is dominated by ethanol segment which holds around 70% market share. Ethanol is widely used as biofuel blending in gasoline. It can be easily produced from sugarcane juice and starch-based feedstocks. Sugarcane is the predominant feedstock used for ethanol production in India. Abundant availability of sugarcane and sugar industry waste makes ethanol production financially viable in the country.

India biofuels Market Segmentation:

  • By Feedstock
    • Ethanol
    • Biodiesel
    • Biogas
    • Others (PVO, SVO, Biobutanol, etc.)
  • By Application
    • Fuel
    • Power Generation
    • Others (chemicals, solvents, etc.)
  • By Technology
    • First Generation
    • Second Generation
    • Third Generation

Pest Analysis:

Political: The Indian government has introduced several policies to promote biofuels such as National Policy on Biofuels 2018. It has set an ambitious target of 20% blending of ethanol in gasoline and 5% blending of biodiesel in diesel by 2030.
Economic: Rising crude oil prices and need to reduce oil import dependence is driving demand for cost-effective biofuels in India. It can boost rural employment and farmers’ income.
Social: Use of biofuels helps reduce toxic emissions from gasoline and diesel. It is also seen as sustainable fuel sourced from renewable biomass feedstocks.
Technological: Companies are focusing on developing advanced technologies for higher crop yields, efficient biofuels extraction processes and value-added co-products to make biofuels commercially competitive.

Key Takeaways:

The   India Biofuels Market Size is expected to witness high growth. The global India biofuels market is estimated to be valued at US$ 2.56 Bn in 2023 and is expected to exhibit a CAGR of 22% over the forecast period 2023 to 2030.

Regional Analysis The India biofuels market is dominated by the southern and western regions. States like Karnataka, Maharashtra and Tamil Nadu dominate ethanol production owing to conducive sugarcane growing conditions.

Key players operating in the India biofuels market are Reliance Industries, Indian Oil Corporation, Bharat Petroleum, Hindustan Petroleum, Tata Chemicals, Praj Industries, Cargill India, Emami Agrotech, Godrej Agrovet, Pan Bio Energy. Key players are investing in expanding ethanol production capacities and developing newer technologies to produce advanced biofuels from non-edible feedstocks.

*Note:
1. Source: CoherentMI, Public sources, Desk research
2. We have leveraged AI tools to mine information and compile it