Global Bio-Based Naphtha Market - 2023-2030

Overview

Global Bio-Based Naphtha Market reached US$ 895.2 million in 2022 and is expected to reach US$ 3,338.7 million by 2030, growing with a CAGR of 18.3% during the forecast period 2023-2030.

The bio-based naphtha market is significantly growing with the higher demand for sustainable fuel technology in the present world. Biofuels are playing a major part in decarbonizing the transport sector as they are the low-carbon solution for ongoing transportation technologies such as light-duty vehicles in the short term and heavy-duty trucks, ships and aircraft in the long term. The bio-based fuel c sector also provides other alternative and cost-effective solutions for reducing carbon emissions.

Furthermore, as per the IEA report, in 2022, global biofuel demand reached a record high of 4.3 exajoules (EJ), equivalent to 170,000 million liters. It level of demand surpassed the pre-COVID-19 pandemic levels observed in 2019. To achieve the goal of Net Zero Emissions by 2050 (NZE), there is a need for a significant increase in biofuel production. In the NZE Scenario, biofuel production is projected to reach over 10 EJ by 2030, which shows the required demand for biofuel globally such as bio naphtha.

The European bio-based naphtha market is expected to be the fastest growing region in the bio-based naphtha market. Europe is forwarding towards the goals to achieve net-zero emissions by 2050. Europe has achieved remarkable success in increasing the turnover of its bio-based economy by more than 40% in less than a decade. The major push to environmental sustainability has accelerated the adoption of renewable and bio-based products across various industries.

Dynamics

Need for Sustainable Biofuels

The bio-based naphtha market is significantly growing with the higher demand for sustainable fuel technology, with biofuels accounting for over 3.5% of global transport energy demand in 2022, primarily in the road transport sector. As per IEA, this growth has been consistent, with biofuel consumption expanding at an annual rate of nearly 6% over the past five years, except for a temporary decline in 2020 due to the COVID-19 pandemic. The Net Zero Emissions Scenario sets specific targets with the projection that biofuels will grow more than double their contribution to the transport sector by 2030 and will reach 9% of total fuel demand, especially for road vehicles.

Furthermore, more than 80 countries globally made policies that are supporting the use and demand for biofuels. The policies is playing crucial role in driving the adoption of biofuels on a global scale. Biofuels played a crucial role in reducing global road transport oil consumption, accounting for the avoidance of 4% of global road transport oil use in 2022. It translates to approximately 2 million barrels of oil saved on an energy basis.

Global Transport Biofuel Expansion

The bio-based naphtha market is on a growth trajectory expected to be driven by the robust expansion of the global transport biofuel sector, with a significant focus on renewable diesel production. As per IEA, in 2022, transport biofuel capacity experienced a remarkable 7% increase, marking the most substantial annual growth in over a decade. The expansion is indicative of the rising demand for biofuels and their essential feedstocks, including bio-based naphtha. Major biorefineries, particularly in regions like United States and Europe, are at the forefront of this growth, benefiting from favorable policies and incentives that encourage renewable diesel production, a process reliant on bio-based naphtha.

Furthermore, significant investments have flooded into the biofuels sector, with 2022 witnessing capacity additions at levels not seen in ten years, totaling approximately 260 kb/d. The investments are prominently directed towards renewable diesel refining, as exemplified by high-profile ventures such as the Marathon-Neste joint venture in California and Imperial's substantial investment in Canada. Also, the burgeoning interest in sustainable aviation fuels is propelling this growth, with companies like Neste expanding their renewable fuels plants to cater to this demand. SAFs, crucial for reducing emissions in the aviation sector, rely on bio-based feedstocks like naphtha.

Impact of High Biofuel Cost

The high cost of bio-based fuels, particularly biodiesel, is impacting the bio-based naphtha market. According to NGO Transport & Environment report, the biodiesel that is produced with the current feedstock is now between 70% and 130% more expensive than fossil diesel on the wholesale market. The price difference is because of the rising prices of feedstocks like cereals, vegetable oils, used cooking oil and animal fats, which are essential components in biofuel production.

Furthermore, T&E's study indicates that the process used with the blending of biofuels in Europe is contributing to the add-on €17 billion annually to the EU's fuel bill. It financial burden not only affects consumers but also has implications for the bio-based naphtha market. The high cost of biofuels may deter investment and adoption of bio-based naphtha, hindering its growth potential.

Segment Analysis

The global bio-based naphtha market is segmented based on source, application and region.

Vegetable Oil Dominates the Bio-Based Naphtha Market

Vegetable oil is expected to hold the largest segment in the bio-based naphtha market. Renewable naphtha produced from sustainable feedstocks, like from vegetable oil shows a significantly lower greenhouse gas footprint as compared to petroleum based naphtha. Also, depending on the feedstock used, this reduction can be as high as 50-80%. Moreover, the production capacity of renewable diesel and sustainable aviation fuel is increasing. The processes often yield coproducts through the hydrotreated vegetable oil (HVO) process, including bionaphtha and biopropane.

Furthermore, Honeywell has introduced a solution for producing renewable naphtha for petrochemical production using its Ecofining technology. It technology has been proven commercially and initially developed in collaboration with Eni SpA to convert non-edible vegetable oils and animal fats into renewable fuels, such as Honeywell Green Diesel and Honeywell Green Jet fuel. Honeywell aims to help petrochemical producers reduce the carbon footprint of their products by offering renewable naphtha as an alternative to petroleum-based feeds.

Geographical Penetration

Rapid Growth of the European Bio-Based Naphtha Market

The European bio-based naphtha market is experiencing rapid growth, driven by various factors that are reshaping the energy and petrochemical landscape. Bionaphtha, a versatile product derived from renewable sources, is at the forefront of this transition towards a cleaner energy future in the region. Supply and demand for bionaphtha are on the rise in Europe with innovative technologies and emerging regulations.

European companies like Neste and UPM are actively involved in the production and utilization of naphtha and they have witnessed substantial growth in the renewable products segment. Also, major players such as TotalEnergies, Shell and ENI are expanding their offerings in the renewable fuels and petrochemicals sector, further boosting the growth of bionaphtha. As per "Chem Analyst" article, current production levels of Bionaphtha in Europe range from 150,000 to 250,000 tonnes annually, with expansion projects on the horizon. Over the next four to five years, production is anticipated to double, reaching 500,000 tonnes, reflecting the region's increasing appetite for sustainable feedstocks.

Competitive Landscape

The major global players in the market include: Neste Corporation, UPM Biofuels, INEOS, Gevo, Euglena co Ltd., AltAir Fuels, Preem, Shell Plc, Eni S.p.A and Diamond Green.

COVID-19 Impact Analysis:

COVID-19 made a significant impact on the bio-based naphtha market, in the wake of the pandemic, many economies faced unprecedented challenges, including GCC (Gulf Cooperation Council) countries. The challenges led to a renewed focus on sustainability and environmental concerns within the chemical and petrochemical sectors. One positive outcome of this sustainability push in the GCC region is the increasing production and use of bio-naphtha, a renewable feedstock derived from sources like organic waste and biomass.

Despite the economic challenges posed by the pandemic, regional chemical producers in GCC countries, such as Saudi Arabia's SABIC and Kuwait's EQUATE, began expanding their portfolios to include circular and bio-based polymers. It strategic shift towards more sustainable practices reflects a global trend towards environmental consciousness and sustainability, as exemplified by the End Plastic Pollution resolution endorsed by 175 nations in Nairobi, Kenya.

Russia-Ukraine War Impact

The Ukraine-Russia conflict has had significant repercussions on various markets, including the bio-based naphtha market. The International Energy Agency (IEA) has indicated that reducing biofuel mandates in response to Ukraine-Russia conflict could result in increased petroleum demand and supply concerns. It shows the major dependency between food and energy systems and the potential consequences of policy changes in response to geopolitical events. The potential solution for this is to transition from 1st Generation biofuels to higher generations, such as 2nd or 3rd Generation biofuels.

By Source

• Vegetable Oil
• Biomass
• Other

By Application

• Gasoline
• Petrochemical
• Aviation Fuel
• Bio Benzene
• Bio Phenol
• Other

By Region

• North America
  • U.S.
  • Canada
  • Mexico

• Europe
  • Germany
  • UK
  • France
  • Italy
  • Russia
  • Rest of Europe

• South America
  • Brazil
  • Argentina
  • Rest of South America

• Asia-Pacific
  • China
  • India
  • Japan
  • Australia
  • Rest of Asia-Pacific

• Middle East and Africa

Key Developments

• In September 2023, Alpha and Omega Semiconductor (AOS) has unveiled its MRigidCSP packaging technology, aimed at enhancing battery management applications. It technology is designed to reduce on-resistance while simultaneously increasing mechanical strength. Initially, AOS is offering MRigidCSP technology on its AOCR33105E, a 12V common-drain dual N-channel MOSFET. It packaging technology is well-suited for battery applications in devices like smartphones, tablets and ultra-thin notebooks.
• In November 2022, Cortec has introduced a sustainable solution in the form of EcoSonic ESD-safe bags, addressing challenges in electronic product packaging. The bags provide ESD protection to prevent damage from static charges and incorporate bubble wrap for impact protection. What sets them apart is the integration of Nano VpCl lining, which releases corrosion-resistant compounds into the bag's internal atmosphere, forming a protective molecular-scale layer around the product. It protects against moisture and corrosion without affecting solderability.
• In May 2023, Semtech has introduced its latest Transient Voltage Suppressors (TVS) product, the RClamp0822B, designed to offer high-performance electrostatic discharge (ESD) and surge protection. It versatile circuit protection platform aims to safeguard high-speed data interfaces across various circuit interfaces in industrial, data center and telecommunication applications. The RClamp0822B, with its very-low sub 1 picofarad loading capacitance, is ideal for protecting high-speed data lines from electrical transient threats. It also provides robust surge immunity and is packaged in a user-friendly SC-75 package, making it suitable for a wide range of industrial designs

Why Purchase the Report?

• To visualize the global bio-based naphtha market segmentation based on source, application and region, as well as understand key commercial assets and players.
• Identify commercial opportunities by analyzing trends and co-development.
• Excel data sheet with numerous data points of bio-based naphtha market-level with all segments.
• PDF report consists of a comprehensive analysis after exhaustive qualitative interviews and an in-depth study.
• Product mapping available as excel consisting of key products of all the major players.

The global bio-based naphtha market report would provide approximately 52 tables, 50 figures and 186 Pages.

Target Audience 2023

• Manufacturers/ Buyers
• Industry Investors/Investment Bankers
• Research Professionals
• Emerging Companies