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Advanced biofuel are the fuels, which can be produced from various types of non-food biomass such as agricultural waste streams, lignocellulose, woody crops, and others. This type of biofuel is known as second-generation biofuel. In first generation biofuel production technology, biofuel is produced from vegetable oils and sugars found in food crops. However, usage of food crops in biofuel production instead of usage for feeding had created concern among stakeholders and in order address this concern, scientists invented the second-generation biofuel, where non-food biomass is used as feedstock.
On the basis of processing technology, the advanced biofuel market has been segmented into thermochemical and biochemical. In thermochemical process, the biomass is heated at high temperatures in the presence or absence of oxygen. The entire process produces mixture of gases and solid char, then, the produced gas mixture is fermented or chemically treated to produce range of biofuel. In biochemical process, hydrolysis of the biomass is performed to produce cellulose fractions. In the next step, the cellulose fractions are fermented to produce different types biofuels. Owing to less complexity and less carbon footprint, popularity of biochemical process is expected to increase among second-generation biofuel producers during the forecast period.
On the basis of raw material, the advanced biofuel market has been divided into energy crops, municipal solid waste, green waste, and black liquor. Under energy crops, algae raw material and plants are made from lignin, cellulose, and hemicellulose are considered. These plants can be grown in wastewater and require minimal caring. In addition, as compared to other raw materials, growth rate of energy crops is significantly higher. Owing to such benefits, as of 2017, demand for energy crops as raw material for production of second-generation biofuel surpassed the demand for other raw materials.
On the basis of type, the advanced biofuel market has been segmented into cellulosic ethanol, biodiesel, biobutanol, bio-dimethyl ether (DME), and others. Cellulosic ethanol and biodiesel fuel type are two of the most demanded second-generation biofuel owing to its growing usage as engine fuel in automotive and aerospace sector.
In coming years, rapid commercialization of second generation cellulosic ethanol and biodiesel market is expected owing to supportive government regulations and increasing collaboration between countries to optimize the production process. In Germany, SUNLIQUID project has already been established to produce cellulosic ethanol from leaves and stalks of rice straw, maize, and sugar cane. Since 2012, this project is producing up to 1000 metric tons of bioethanol annually.
The global advanced biofuel market is driven by factors such as supportive government regulations promoting the usage of second-generation biofuel in different end use sectors including manufacturing and energy sector, and growing concern regarding food sustainability of first-generation biofuel among stakeholders. In addition, depleting carbon-based fossil fuel is also promoting the usage of second-generation biofuel among users.
Lack of awareness regarding benefits of second-generation biofuel in Asian countries has negatively affected the growth of the advanced biofuel market in this region.
With rapid urbanization and industrialization, energy demand is growing exponentially in emerging economies. In coming years, introduction of government regulations supporting the usage of advanced biofuel as alternative of environmentally unsustainable fossil fuel is expected. Such regulations will create opportunity for the advanced biofuel market in emerging economies.
Insights by geography
On the basis of both value and volume, North America held the largest share in the market in 2017. Regulations such as Farm Security and Rural Investment Act of 2014, Energy Policy Act of 2005 & Energy Independence and Security Act (EISA) of 2007, and California Low-Carbon Fuel Standard (LCFS) are promoting the usage of second-generation biofuel in the U.S. In order to adhere to these regulations, users as well as fuel producers are also opting for environment friendly biofuel. These supportive government regulations are identified as long-term growth drivers for the North American advanced biofuel market.
Some of the major players operating in the global advanced biofuel market are Abengoa Bioenergy, Algenol Biotech, A2BE Carbon Capture, LLC., Chemtex company, Bangchak Petroleum Plc., Clariant, DowDuPont Inc., Fujian Zhongde Energy Co., Ltd, and Inbicon A/S, GranBio.