U.S. Liquid Biofuel Market Size, Share & COVID-19 Impact Analysis, By Type (Ethanol and Biodiesel), By Feedstock (Sugar Crops, Starch Crops, Vegetable Oils, Animal Fats, and Others), By Process (Fermentation, Transesterification, and Others), By Application (Transportation, Power Generation, and Heat), and Country Forecast, 2023-2030

The U.S. liquid biofuel market size was worth USD 48.02 billion in 2022 and is projected to grow at a CAGR of 9.1% during the forecast period. 

The U.S. comes under the top biofuel consumption category driven by the government's initiative toward renewable and clean energy sources. The trending use of advanced biofuels, such as ethanol and biodiesel, also boosts U.S. liquid biofuel market growth. Still, this liquid biofuel required advancement in the clean form to be adopted by other machinery dependent on the other fuel types.

The HFTO (Hydrogen and Fuel Cell Technologies Office) emphasizes on developing biofuel-supporting research, development, advancement, and demonstration projects. The HFTO collaborates with other government agencies, private institutes, industry stakeholders, and international partners to develop sustainable fuel by that U.S. is about to contribute more globally in terms of market share.

The impact of COVID-19 on the U.S. market was moderate, as it hampered the consumption of the product in many end-use industries due to supply chain disruption of raw materials and hindrance in activities due to social distancing norms. Due to the lack of skilled professionals to use the technology, COVID-19 has significantly impacted the market growth. As a result of the shutdown of manufacturing units around the world, the revenue of the market also decreased.

LATEST TRENDS

Rising Trend of Liquid Biofuel in the Aviation Industry to Drive the Market Growth

Currently, air travel is booming, with the number of passengers set to double over the next twenty years. Aviation accounts for around 15% of global oil demand growth up to 2030 in the International Energy Agency’s (IEA) new policies scenario, where the U.S. is one of the major contributors. As per the biofuel research, to tackle this situation, the U.S. will provide enough biomass feedstock for liquid fuel demands of the U.S. aviation sector fully from biofuels, an amount expected to reach 30 billion gallons/year by 2040.

DRIVING FACTORS

Adaptation of Eco-Friendly Fuels to Stimulate the Product Demand

Liquid biofuels have created a huge demand in the market driven by the eco-friendly fuels used in various applications. The transportation industry is the primary contributor to liquid biofuel, which will lead in the long term. The reason behind the ultimate use of liquid biofuel in transportation is the lower emission of the CO₂. In addition, the rising adaptation of biofuels in recent years is also driven by awareness regarding CO₂ emissions, as liquid biofuels are eco-friendly with better quality. As per the IEA, the U.S. Inflation Reduction Act (IRA) provides production and investment sustenance for biofuels estimated at USD 9.4 billion to 2031.

RESTRAINING FACTORS

Instability in Raw Material Prices Are Hindering the Market Growth

The impulsive raw material prices have a negative impact on the overall market's growth for liquid biofuel. The increasing prices of biofuels have caused lower demands across multiple sectors. As a result, these unpredictable variations will pose a major challenge to the biofuels market growth.

The IEA is warning that biodiesel, bio-jet fuel, fossil fuel, and renewable diesel producers are heading for a feedstock supply crisis over the next five years. Rising prices are a major signal to seek out new supplies and solutions.

SEGMENTATION

By Type Analysis

Based on type, the U.S. market is segmented into ethanol and biodiesel. The ethanol segment held a higher share in 2022 owing to the increasing prevalence of ethanol in different machinery to avoid carbon emissions.

• The North American government is using biofuel for transportation with the blending ration. Most U.S. biodiesel is consumed as blends with petroleum diesel in ratios of 2% (referred to as B2), 5% (B5), or 20% (B20).

By Feedstock Analysis

Based on feedstock, the market is segmented into sugar crops, starch crops, vegetable oils, animal fats, and others.

The starch crops segment held a larger market share in 2022 owing to increasing crops abundant in the country. There is a well-established feedstock for ethanol production, the leading liquid biofuel type in the U.S.

• For instance, the U.S. government has implemented policies, such as the Renewable Fuel Standard (RFS), which requires a certain amount of biofuels, including starch-based ethanol, to be blended into transportation fuels. 

By Process Analysis

Based on process, the market is segmented into fermentation, transesterification, and others.

The fermentation segment held a larger market share in 2022 owing to its use in manufacturing ethanol from starch crops, which are abundant in the country. Fermentation comprises breaking down the starch into sugars and then fermenting them into ethanol.

• For instance, as the IEA puts out their projections for 2022-2027, the U.S. is driving demand for sugars, maize, soy oil, rapeseed oil, palm oil, and other crops, with the majority of the consumption growth, which also increases global demand by 56% to 79m tons. This demand also helps to generate ethanol through fermentation. Several companies are generating ethanol by these methods.

By Application Analysis

Based on application, the market is segmented into transportation, power generation, and heat.

The transportation sector held a larger share in 2022 owing to the growing demand for renewable and low-carbon transportation fuels. Moreover, liquid biofuels, such as biodiesel and ethanol, are used in vehicles as a substitute for gasoline and diesel.

• For instance, as per IEA, transport emissions grew at an annual average rate of 1.7% from 1990 to 2022, faster than any other end-use sector except for industry (which also grew at around 1.7%). To get on track with the Net Zero Emissions (NZE) by 2050 Scenario, CO2 emissions from the transport sector must fall by more than 3% per year by 2030.

KEY INDUSTRY PLAYERS

In terms of the competitive landscape, the U.S. liquid biofuel market share portrays the presence of established and emerging companies. Archer-Daniels-Midland (ADM) dominated the U.S. market in 2022. The company focuses on cutting-edge innovations and energy security and solutions, leading the way to a new future of plant-based consumer and industrial solutions to replace petroleum-based products.

Other companies with a considerable presence in the U.S. market include CropEnergies AG, Renewable Energy Group Inc. (Chevron), Bioenergy DEVCO, and POET LLC. For instance, in June 2021, POET LLC announced the acquisition of Flint Hills Resources, including six ethanol plants and two terminals. This acquisition will increase POET’s ability to provide even more high-quality, plant-based biofuels and bio-products to the world.

LIST OF KEY COMPANIES PROFILED:

• Archer-Daniels-Midland (ADM) (U.S.)


• CropEnergies AG (Germany)


• Gevo Inc. (U.S.)


• Alto Ingredients Inc. (U.S.)


• Fulcrum Bioenergy Inc. (U.S.)


• Algenol (U.S.)


• POET LLC (U.S.)


• Renewable Energy Group Inc. (Chevron) (U.S.)


• Bioenergy DEVCO (U.S.)


• Novozymes (U.S.)

KEY INDUSTRY DEVELOPMENTS:

• September 2022 – Gevo announced a world-class sustainable fuel production facility in Lake Preston, its largest economic investment in South Dakota history. This new facility is the first billion-dollar-plus project in the Governor’s Office of Economic Development history.


• June 2022 – Alto Ingredients, Inc. disclosed that it was awarded a USD 22.7 million cash grant from the USDA's Biofuel Producer Program, established under the CARES Act to aid biofuel producers who were affected by the COVID-19 pandemic's market disruptions. The funds will be utilized to advance their plant's maintenance and infrastructure, including upgrading equipment and operating systems to increase efficiency and reliability, expanding corn storage capacity, installing high-protein harvesting technology, and expanding distribution channels. These capital investments are expected to enhance the company's growth and increase profitability.


• May 2022 – Fulcrum BioEnergy Inc. announced the completion of the commissioning and operations of its Sierra Biofuels plant, the world’s first landfill waste to renewable transportation fuels plant. Combined with operations, its feedstock processing facility covers landfill waste into a clean, prepared feedstock.

REPORT COVERAGE

The market report provides a detailed analysis of the market. It focuses on key aspects such as an overview of the technological advancements and the trend of this market in the U.S. Additionally, it includes key findings for liquid biofuel, new product launches, key industry developments such as mergers & acquisitions, partnerships, and the impact of COVID-19 on the market. Besides this, the report also offers insights into the market trends and highlights key industry dynamics. In addition to the aforementioned factors, it encompasses several factors that have contributed to the growth of the market over recent years.

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