Bio-based Naphtha Market Size, Share, Analysis, Trends, Growth Report, 2030

Bio-based Naphtha Industry Prospective:

The global Bio-based Naphtha market size was worth around USD 870 million in 2022 and is predicted to grow to around USD 2755 million by 2030 with a compound annual growth rate (CAGR) of roughly 15.5% between 2023 and 2030.

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Bio-based Naphtha Market: Overview

A by-product of the manufacturing of Hydrotreated Vegetable Oil (HVO), also known as renewable diesel and Sustainable Aviation Fuel (SAF), is bio-based naphtha (bio-naphtha). Gasification can also be used to create it as a stand-alone product. When mixing gasoline or making sustainable plastic, bio-naphtha can be utilized as a direct replacement for fossil-based naphtha. For HVO and SAF, producers employ a broad range of feedstocks, including residual cooking oil, vegetable oils like palm & rapeseed, waste by-products from industries like the manufacture of wood pulp (sometimes referred to as crude tall oil, or CTO), and animal fats.

Key Insights

• As per the analysis shared by our research analyst, the global Bio-based Naphtha market is estimated to grow annually at a CAGR of around 15.5% over the forecast period (2023-2030).
• In terms of revenue, the global Bio-based Naphtha market size was valued at around USD 870 million in 2022 and is projected to reach USD 2755 million, by 2030.
• The global Bio-based Naphtha market is being driven by the rising collaboration and the increasing government initiatives across the globe.
• Based on the source, the vegetable oil segment is expected to dominate the market over the forecast period.
• Based on the application, the fertilizers segment is expected to hold the largest market share over the projected period.
• Based on region, Europe is expected to dominate the market over the forecast period.

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Bio-based Naphtha Market: Growth Drivers

Growing environmental concerns and sustainability drive market growth

A greater focus on sustainable alternatives is a result of growing public awareness of climate change, pollution, and resource depletion. When opposed to fossil fuel-based naphtha, bio-based naphtha offers a more environmentally friendly alternative since it produces less greenhouse gas emissions and is less reliant on limited resources. According to the EPA, based on the potential for 100 years of global warming, CO2 emissions made up roughly 79% of all anthropogenic GHG emissions in the United States in 2021. 73% of all GHG emissions and 92% of all anthropogenic CO2 emissions in the United States were caused by burning fossil fuels for energy. Regarding total GHG emissions and total CO2 emissions, other human sources and activities contributed around 6% and 8%, respectively. In addition, according to Honeywell, the renewable naphtha will process 10,000 barrels of old vegetable oil or other sustainable feedstock per day, reducing greenhouse gas emissions by 50 to 80%. Thus, this is expected to drive the global bio-based naphtha market growth during the forecast period.

Bio-based Naphtha Market: Restraints

High cost of production likely to hamper market growth

Complex conversion technologies that may be more expensive than conventional petroleum-based techniques are frequently used in the manufacturing of bio-based naphtha. Cost competitiveness with goods generated from fossil fuels can be difficult to achieve, especially if feedstock costs are high or processing technologies have not yet reached their full potential. Thus, this is expected to limit the bio-based naphtha market over the forecast period.

Bio-based Naphtha Market: Opportunities

Increasing collaborations offers an attractive opportunity for market growth

The increasing collaboration among the key market players in the industry to launch innovative end-use products is expected to offer an attractive opportunity for the bio-based naphtha industry growth over the projected period. For instance, in May 2023, the unique wood-based substance from UPM was further processed by SABIC to create the jar and label for the bio-based packaging application that the Finnish cosmetics brand LUMENE introduced.

The self-adhesive label and the new LUMENE jar are made from UPM BioVerno naphtha, which is manufactured by UPM in Finland and is renewable. SABIC, a pioneer in the chemical sector, turns the naphtha into certified renewable polypropylene, which is subsequently transformed into widely recyclable cosmetics containers and product labels printed on UPM Raflatac Forest Film label material. LUMENE, a 20-year Nordic leader in circular beauty, decided to employ bio-based raw materials to reduce the environmental impact of their packaging. Therefore, this kind of initiative by the key players drives the market expansion.

Bio-based Naphtha Market: Challenges

Feedstock availability and competition pose a major challenge to market growth

The supply of appropriate and sustainable biomass feedstocks may be constrained, and there may be a rivalry for these resources among other businesses (such as agriculture, energy, and food). This rivalry may increase feedstock costs and impede the commercial feasibility of producing bio-based naphtha. Therefore, it acts as a major threat to the bio-based naphtha market revenue expansion over the forecast period.

Bio-based Naphtha Market: Segmentation

The global Bio-based Naphtha industry is segmented based on source, application, and region.

Based on the source, the global market is bifurcated into vegetable oil and biomass. The vegetable oil segment is expected to dominate the bio-based naphtha industry over the forecast period. Vegetable oils are a common feedstock for bio-based naphtha production due to their widespread availability and potential for sustainable sourcing. Various vegetable oils, such as soybean oil, palm oil, canola oil, sunflower oil, and others, are used as feedstocks for bio-based naphtha production. Different oils have varying compositions and characteristics that can influence the efficiency of conversion processes. Thus, this is expected to drive the segment growth over the forecast period.

Based on the application, the bio-based naphtha industry is bifurcated into gasoline, petrochemicals, chemicals, fertilizers, and others. The fertilizers segment is expected to hold the largest market share over the projected period owing to the efforts of many countries to use bio-based products in agricultural lands.

Bio-based Naphtha Market: Report Scope

Bio-Based Naphtha Market: Regional Analysis

Europe is expected to dominate the market during the forecast period

Europe is expected to dominate the global bio-based naphtha market over the forecast period. The market growth in the region is owing to the increasing circular economy initiatives. The concept of a circular economy, where resources are reused, recycled, and repurposed, is gaining traction. Bio-based naphtha fits into this model by utilizing waste and biomass feedstocks, reducing waste, and promoting the sustainable use of resources. For instance, according to secondary sources, cities in Europe play a significant role in fulfilling the European waste management goals, especially when it comes to separate collection, resource recovery, and ultimate disposal.

European cities have vast expertise in offering sustainable waste management as a service of popular interest. Cities are in a good position to promote sustainable consumption locally and include all sectors because 90% of the garbage they now produce may be recycled or repurposed. Cities absorb more than 75% of the world's natural resources, generate more than 50% of its trash, and create 60-80% of its greenhouse gas emissions. By 2030, the circular economy in Europe has the potential to boost GDP by an extra 0.5%, add 700,000 employment, and reduce GHG emissions and our environmental impact. Therefore, the growing circular economy initiatives in the region will drive market growth.

Bio-based Naphtha Market: Competitive Analysis

The global Bio-based Naphtha market is dominated by players like:

• Royal DSM N.V.
• Diamond Green Diesel (DGD)
• Eni Sustainable Mobility
• Gevo Inc
• Honeywell
• Ineos Group Limited
• LyondellBasell Industries Holdings B.V.
• Euglena Co. Ltd.
• Forge Hydrocarbons Corporation
• Galp Energia
• SGPS S.A.
• Fuenix Ecogy
• Eco Environmental
• Dow Inc.
• Kaidi
• Neste Oyj
• Nordic ElectroFuel
• Phillips 66
• Preem AB
• Repsol S.A.
• Resynergi Inc
• SABIC
• Shell
• St1 Oy
• TotalEnergies Corbion
• UPM Biofuels
• Versalis SpA

The global Bio-based Naphtha market is segmented as follows:

By Source

• Vegetable Oil
• Biomass

By Application

• Gasoline
• Petrochemical
• Chemicals
• Fertilizers
• Construction
• Others

By Region

• North America
  • The U.S.
  • Canada
• Europe
  • France 
  • The UK
  • Spain
  • Germany
  • Italy
  • Rest of Europe
• Asia Pacific
  • China
  • Japan
  • India
  • South Korea
  • Southeast Asia
  • Rest of Asia Pacific
• Latin America
  • Brazil
  • Mexico
  • Rest of Latin America
• Middle East & Africa
  • GCC
  • South Africa
  • Rest of Middle East & Africa