by Biofuels such as biodiesel and bioethanol offer a renewable and sustainable alternative to transportation fuels derived from fossil fuels. Biodiesel is produced from vegetable oils, animal fats or recycled cooking oils through a chemical process known as transesterification. Bioethanol is produced through fermentation of sugarcane or starch crops such as corn. The Indian government has implemented various policies and targets to promote the use of biofuels in order to reduce dependence on imported petroleum, generate rural employment and reduce emissions. Subsidies and tax incentives are provided to biofuel producers. Blending of biofuels such as ethanol with gasoline and biodiesel with diesel is being encouraged.
The India biofuels Market was to be valued at US$ 2.56 Bn in 2024 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 Key Trends:
One of the major trends in the India biofuels market is the increasing focus on advanced biofuels produced from non-edible feedstocks such as Jatropha, Karanja and Pongamia which do not compete with food crops. These feedstocks can be grown on marginal lands thus providing income generation opportunities for farmers without disrupting food supplies. Some states in India have initiated projects to promote cultivation of Jatropha and other non-edible oilseeds for biodiesel production. Technological advancements are also allowing production of cellulosic ethanol from agricultural waste biomass such as rice straw and bagasse, offering higher yields as compared to first generation ethanol from grains and sugarcane. This is expected to provide the much needed scalability and cost competitiveness for the biofuels industry in India.
Porter’s Analysis:
Threat of new entrants: The India biofuels market has medium threat from new entrants owing to requirement of high capital investment for setting up production units. However, government support in terms of subsidies and incentives is encouraging new players to enter the market.
Bargaining power of buyers: Buyers have medium bargaining power due to presence of several established players in the India biofuels market offering substitutable products. However, factors like government mandates for use of biofuels are increasing buyer dependency on existing suppliers.
Bargaining power of suppliers: Suppliers have low to medium bargaining power due to availability of substitute raw materials. However, ongoing consolidation among suppliers is increasing their bargaining power.
Threat of new substitutes: Threat from substitutes is medium as minimal investment is required to shift to alternative products. However, government norms support biofuels over conventional fuels, restricting threat.
Competitive rivalry: The India biofuels market features heavy competition owing to large number of organized and unorganized players. Players compete based on pricing, product differentiation, and portfolios.
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
Key Takeaways:
The India Biofuels Market Size is expected to witness high growth over the forecast period supported by government initiatives. Stringent emission norms are compelling use of cleaner fuels. The global 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 2023 to 2030.
Regional Analysis: The India biofuels market is dominated by the western and southern regions owing to availability of sugarcane feedstock and favorable climate. The northern and eastern regions offer high growth potential led by efforts to increase crop-based ethanol production.
Key Players: 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. Players are investing in renewable fuel projects and engaging in strategic collaborations to strengthen market presence.
*Note:
1. Source: CoherentMI, Public sources, Desk research
2. We have leveraged AI tools to mine information and compile it
