Global Algae Biofuel Market to Reach $10.73 Billion US by 2025
The global algae biofuel market is expected to reach $10.73 billion US by 2025, according to a new report by Grand View Research, Inc. Declining fossil fuel resources as well as rising awareness of environmental protection are expected to be the key factors driving industry growth.
Algae has the ability to offer 2 to 20 times higher yields than existing biofuel feedstocks including corn stover, corn, sorghum, and beet, which is likely to open new avenues for the industry’s growth over the projected period. Increasing R&D conducted by numerous startup companies as well as by various oil and gas majors, and university-led research consortiums are expected to propel production of algae biofuels over the projected period. However, technological challenges and high capital investment in algae biomass and fuel production are expected to limit the industry’s growth.
Growing demand for low cost, reliable, and sustainable energy sources to reduce reliance on the petroleum supply chain and to meet the rising fuel demand by the automotive and aviation sectors is expected to have a positive impact on the industry growth over the forecast period. The industry is experiencing three major hurdles including maintaining algae biomass cultivation consistency across various regions and climates, high water demand for algae production, and lack of technological innovation necessary for commercial scale-up. As a result, the market is expected to foresee regional partnerships and collaborations to capitalize the production and technology exchange for large scale productions.
Further key findings from the report suggest:
Transportation is expected to dominate the algae biofuel market, accounting for over 70% of the overall demand by 2025, owing to its high potential to replace diesel and gasoline in automotive vehicles.
In Europe, the demand for the product in transportation applications is expected to grow at a CAGR of over 12% from 2018 to 2025. High demand for biodiesel in European countries owing to the government regulations and high adoption rates in the region is expected to propel industry growth.
North America is expected to be the largest market, accounting for over 30%, owing to high investment by start-up companies and the U.S. government to support the renewable energy sector.
Asia Pacific is expected to grow at a CAGR of over 8% to reach revenue of over $2 billion by 2025, owing to rapid technological advancements and low raw material costs in the region.
In 2010, U.S. based Solazyme, Inc. delivered over 36,000 liters of 100% algae-derived biofuel to the U.S. Navy for testing and certification purposes, which was seen as a key step towards product commercialization.
The major players in the algae biofuel industry include Algenol, Blue Marble Production, Solazyme Inc., Sapphire Energy, Culture Biosystems, Origin Oils Inc., Proviron, Genifuels, Algae Systems, Solix Biofuels, Algae Production Systems, and Reliance Life Sciences.