Aviation biofuel is an environment-friendly alternative for traditional jet fuel used in the aviation industry to reduce its massive carbon footprint. According to an article published by the World Economic Forum on November 17, 2017, aircraft burns 1.5 billion barrels of jet fuel every year and is liable for 12% of all transportation carbon emissions and 2% of global carbon emissions.
Research Nester published a report titled “Aviation Biofuel Market: Global Demand Analysis & Opportunity Outlook 2028” which delivers a detailed overview of the aviation biofuel market in terms of market segmentation by production technology, by application, and by region.
Further, for the in-depth analysis, the report encompasses the industry growth drivers, restraints, supply and demand risk, market attractiveness, BPS analysis, and Porter’s five force model.
The aviation biofuel market is expected to observe a notable CAGR during the forecast period, i.e., 2020-2028. The market is segmented by production technology, application, and region. Among production technology, the hydrogenated vegetable oil (HVO) segment is expected to influence the overall market on account of HVO being the key source of raw material for first-generation aircraft biofuel manufacturing and generation. Based on the application, the commercial aircraft segment is anticipated to dominate the global aviation biofuel market owing to the growing adaptation of biofuels in place of traditional jet fuel.
Regionally, the aviation biofuel market is segmented into five major regions including North America, Europe, Asia Pacific, Latin America, and the Middle East & Africa region.
North America is anticipated to dominate the global aviation biofuel market owing to reasons such as growing clean energy demand, augmentation of aviation biofuel production companies, and growing carbon emission reduction measures.
Europe has been the second dominant region after North America in the global aviation biofuel market. Several policy instruments related to biofuel have been employed by the European Union for reducing carbon emission, such as the Renewable Energy Directive (RED) has established an objective of accomplishing 20% gross energy consumption from renewable resources by 2020.
Developing nations in the Asia-Pacific region, such as India, Indonesia, and China are estimated to witness significant growth opportunities in the supply chain for supplying feedstock to produce aviation biofuel in the forecast period. According to Internation Energy Agency (IEA), China, India, and Indonesia are responsible for 40% (15 billion liters) of biofuel production growth as of the year 2019.
At the 39th meeting of the ICAO (International Civil Aviation Organization) assembly, a UN-associated aviation body, States adopted CORSIA (Carbon Offsetting and Reduction Scheme for International Aviation), a global market-based measure scheme for international aviation, to account the growth in total carbon di-oxide emissions from international aviation above the 2020 levels.
In March 2020, ICAO agreed to the terms governing the suitability of carbon offset programs for the initial pilot phase of CORSIA which runs from 2021-2023. These terms empower airlines to acquire CO2 offset units from six programs under CORSIA to meet its emissions reduction targets up to 2023.
There is a growing demand for biofuel and with effective international trade and cooperation, it is all set to boost the market growth of aviation biofuel. Consumers are inclined towards green development and with air-transport gone green, the industry can expect lucrative future growth.
Additionally, the rise in the number of aircraft and growing demand for air travel especially in Asia-pacific regions owing to a rise in disposable income of the people has contributed significantly towards the market growth.
However, stringent protocols for keeping the standard specifications while producing the aviation biofuel may put a burden on the global aviation biofuel market growth.