India's biofuels market comprises biodiesel and bioethanol, which are derived from biomass resources through various processes like fermentation and transesterification. Biofuels offer environmental benefits over conventional fossil fuels, as they emit significantly less carbon dioxide and reduce dependence on crude oil imports. The Indian government has continuously increased the blending mandate for ethanol and biodiesel over the years to reduce air pollution and boost the rural economy. Ethanol blended petrol (EBP) programme and biodiesel blending with diesel (BBD) are key biofuel policies supported by the Ministry of Petroleum and Natural Gas.
India Biofuels Market is estimated to be valued at US$ 2.56 Bn in 2024 and is expected to exhibit a CAGR of 22% over the forecast period 2024-2031.
Key Takeaways
Key players operating in the India biofuels market are Reliance Industries, Indian Oil, Bharat Petroleum, Hindustan Petroleum, and Tata Chemicals. These companies have established production facilities and distribution networks to cater to the growing demand for biofuels in the country.
India Biofuels demand is growing rapidly due to supportive policies and initiatives like the National Policy on Biofuels 2018 that have mandated higher blending targets. Ethanol blend was recently increased to 10% from earlier 5% whereas biodiesel blending percentage was hiked to 20% from earlier 5%.
Technological advancements in biomass pretreatment and conversion processes have enhanced the efficiency and yields of first- and second-generation biofuels. Advanced biofuel technologies allow the use of non-edible feedstocks and municipal solid waste for commercial-scale production.
Market Trends
Growing focus on advanced biofuels - Research is ongoing on the commercial production of drop-in advanced biofuels that have properties similar to fossil-based fuels. These 3G and 4G biofuels have higher energy content and can replace fossil fuels without any infrastructure modification.
Rise in electric vehicles - Although biofuels will still dominate Indian transportation for the next decade, an increase in EV adoption could impact biofuel demand growth over the long term. Biofuel producers are exploring diversification into new applications like aviation and chemicals sector.
Market Opportunities
Use of agricultural waste - India generates over 300 million tons of agricultural residues annually, providing significant feedstock reserves. Projects harnessing crop residues, bagasse, and other wastes are gaining traction.
BioCNG and bio-LNG potential - Conversion of biomass into compressed biogas (bio-CNG) or liquefied biogas (bio-LNG) offers an opportunity to contribute towards cleaner transportation and cooking fuel needs.
Impact of COVID-19 on India Biofuels Market Growth
The COVID-19 pandemic had a significant impact on the India biofuels market growth. During the initial phase of the lockdown in 2020, the demand for transportation fuel reduced drastically as vehicles remained off road for an extended period. This led to a steep decline in demand for both biodiesel and bioethanol used for blending in diesel and petrol respectively. The supply chains and logistics were severely disrupted during the lockdown which posed challenges for raw material procurement as well as distribution of biofuels.
As the lockdown restrictions eased in later months, the demand started recovering gradually. However, it is yet to reach the pre-pandemic levels. The industries and businesses are slowly resuming operations though workforce availability is still a challenge in many parts. The relaxation in blending mandates by the government offered some relief to biofuel producers during the period of low demand. The focus is now on restoring the supply chains and ramping up production to cater to the increasing demand. Technological advancements are also being explored to improve yields and reduce production costs.
The long term outlook for the biofuels market remains positive backed by the rising focus on clean energy sources and sustainability. The government targets of achieving 20% ethanol blending by 2025 will accelerate future capacity additions. Support through various schemes for setting up new plants and retrofitting existing ones is expected to boost investments. With economic activities gaining momentum, the demand growth is projected to pick up aided by rising vehicle sales and industrial consumption over the coming years.
Geographical Regions with High Concentration of India Biofuels Market
In terms of value, the India biofuels market is highly concentrated in the sugarcane growing regions of Maharashtra, Uttar Pradesh, Karnataka, Gujarat and Tamil Nadu. These states collectively account for over 80% of the country's total ethanol production capacity. Abundant availability of sugarcane molasses, the primary feedstock, and presence of large sugar mills with distillation infrastructure have boosted ethanol plants in these regions. States like Punjab and Haryana are also emerging as major hubs for biodiesel with a rising number of rice straw based plants coming up near agricultural markets.
The fastest growing region for the India biofuels market is North and East India. States like Bihar, West Bengal, Punjab, Himachal Pradesh and Uttarakhand are witnessing significant capacity additions, both for ethanol and biodiesel, supported by favourable agricultural conditions and policy push. This includes several new generation standalone units taking advantage of various grain residues and cellulosic feedstocks available locally. With continued incentivisation by the government, these regions have strong growth potential to emerge as new biofuels hubs in the coming years.
What Are The Key Data Covered In This India Biofuels Market Report?
:- Market CAGR throughout the predicted period
:- Comprehensive information on the aspects that will drive the India Biofuels's growth between 2024 and 2031.
:- Accurate calculation of the size of the India Biofuels and its contribution to the market, with emphasis on the parent market
:- Realistic forecasts of future trends and changes in consumer behaviour
:- India Biofuels Industry Growth in North America, APAC, Europe, South America, the Middle East, and Africa
:- A complete examination of the market's competitive landscape, as well as extensive information on vendors
:- Detailed examination of the factors that will impede the expansion of India Biofuels vendors
FAQ’s
Q.1 What are the main factors influencing the India Biofuels?
Q.2 Which companies are the major sources in this industry?
Q.3 What are the market’s opportunities, risks, and general structure?
Q.4 Which of the top India Biofuels companies compare in terms of sales, revenue, and prices?
Q.5 Which businesses serve as the India Biofuels’s distributors, traders, and dealers?
Q.6 How are market types and applications and deals, revenue, and value explored?
Q.7 What does a business area’s assessment of agreements, income, and value implicate?
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Author Bio:
Money Singh is a seasoned content writer with over four years of experience in the market research sector. Her expertise spans various industries, including food and beverages, biotechnology, chemical and materials, defense and aerospace, consumer goods, etc. (https://www.linkedin.com/in/money-singh-590844163)
