Market Overview
The global carbon neutral fuel market is expected to register a CAGR of over 5% to reach around USD 80 Billion by the end of 2027. When carbon-neutral synthetic fuels are used, they do not add to the amount of carbon dioxide in the atmosphere. These fuels have no effect on reducing or releasing carbon dioxide emissions into the atmosphere. Hydrogen cells, biodiesel, bioethanol, biobutanol, methanol, and algae are some of the most regularly utilised carbon-neutral fuels. The competitors in the worldwide carbon-neutral fuels market are focusing on capturing carbon dioxide in the atmosphere and combining it with hydrogen to create fuel.
Market Trends
Carbon dioxide trapped in the atmosphere is combined with hydrogen to make carbon-neutral fuel. During the review period, the rising automotive, marine, and aviation industries are projected to create a large increase in demand for carbon-neutral liquid fuels. Increasing environmental rules to limit carbon emissions around the world are driving global demand for carbon-neutral fuel cells. The negative effects of carbon dioxide emissions, such as global warming, ocean acidification, and carbon fertilisation, have boosted demand for carbon-neutral fuel cells. The increase in carbon dioxide gas emissions in the atmosphere, primarily owing to the combustion of fossil fuels such as coal, petroleum, and natural gas, is the primary cause driving global demand for carbon-neutral fuel.
Alternative fuels that are carbon-neutral are used in a variety of applications, including automobiles, ships, aircraft, trucks, trains, and turbines. The demand for carbon-neutral fuels is likely to be driven by environmental rules issued by the European Commission and the US Environmental Protection Agency to minimise carbon emissions caused by the transportation industry. Additionally, according to OPEC, oil and gas will continue to meet more than half of global energy demand by 2020, contributing significantly to market growth. The market is also being aided by the burgeoning automotive sector in developing countries, which is producing more lightweight and fuel-efficient vehicles.
However, market growth is projected to be limited throughout the study period due to the high cost of carbon-neutral liquid fuels and the growing preference for electric vehicles.
Market Segmentation
The global Carbon-neutral Fuels Market has been divided into four categories: feedstock, type, application, and region.
Carbon dioxide, hydrogen, plant starches, animal fats, vegetable oil, and other feedstocks have been separated into the global market. Because market companies are increasingly focusing on the development of carbon-neutral synthetic fuels using air to fuel technology, the carbon dioxide category is expected to grow significantly.
Hydrogen cell, biodiesel, bioethanol, biobutanol, methanol, algae, and other carbon-neutral fuels were studied. Because hydrogen fuel cells have a higher energy density than liquid hydrogen, they were the fastest-growing group due to increased use in automobiles.
The global market has been divided into autos, ships, aircraft, trucks, trains, power generation, chemicals, and others based on application. In 2018, the vehicle segment held the biggest market share, and it is predicted to grow at a significant rate over the next few years.
Regional Overview
In 2018, North America accounted for the highest part of the worldwide carbon-neutral fuels market, with a considerable CAGR projected by 2025. The rising aerospace and defence industries in the United States is credited with the increase. The aerospace and defence business in the United States generated roughly USD 865 billion in revenue in 2017. Increased regulations imposed by the US Environmental Protection Agency to minimise carbon emissions caused by the transportation industry are also assisting the region's market growth.
Increased rules to reduce pollutants from the maritime and aviation industries are also predicted to boost the European market's growth. Annually, marine transportation emits roughly 940 million tonnes of CO2. As a result, with the expansion of the region's key end-use sectors, demand for carbon-neutral fuels is expected to rise significantly.
Due to the rise of major end-use sectors such as marine, automotive, and aerospace and defence, Asia-Pacific had the fastest expanding market in 2020. The rising automotive sector, particularly in India, South Korea, Thailand, and Malaysia, is likely to play a key role in the regional market's growth. The preference for hydrogen fuel cells in the transportation industry, which has a greater energy density than liquid hydrogen, is expected to boost regional market expansion, particularly in Australia and China.
Due to increased demand for carbon-neutral fuels to reduce emissions from the transportation sector, markets in Latin America, the Middle East, and Africa are likely to rise strongly.
Competitive Dynamics
Carbon Engineering Ltd (Canada), POET, LLC (US), Cargill, Incorporated (US), Archer Daniels Midland Company (US), Koch Industries, Inc (US), The Andersons, Inc (US), Raízen (Brazil), Copersucar (Brazil), Abengoa (Spain), Wilmar International Limited (Singapore), Bunge North America, Inc (US), BIOX Corporation (Canada), and Renewable Energy Group, Inc (US).
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