The global renewable naphtha market is projected to top US$ 422.0 Mn in 2021, finds Future Market Insights (FMI) in a recent market survey. Driven by increasing demand for eco-friendly alternative for synthetic plastic, sales of renewable naphtha are poised to grow at an impressive 10.5% CAGR through 2031.
Shifting consumer focus on bio-based products, along with favorable government policies promoting the use of biodegradable packaging material will continue boosting demand for renewable naphtha over the forecast period.
Considering this, FMI has projected the market valuation to reach US$ 1.15 Bn in 2031.
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2016-2020 Renewable Naphtha Market Outlook Compared to 2021-2031 Forecast
Demand for renewable naphtha grew at a moderate 3.6% CAGR between 2016 and 2020. Sales prospects were dampened due to the onset of the COVID-19 pandemic. However, steady recovery is on cards, as the market is forecast to experience year-over-year growth by 8.7% in 2020-2021.
In recent years, high demand for plastics has been observed due to increasing adoption of plastics in packaging materials, home decor, bespoke articles, and automotive. Besides this, rising fuel blending practices to comply with changing fuel composition related mandates are boosting the consumption of renewable naphtha.
Renewable naphtha market is anticipated to witness a considerable growth rate in the coming years. The global population is been estimated to be pegged at about 7.8 billion which is expected to reach about 9.7 billion by 2050 end. This substantial growth in the population will require more automobiles, plastic products, packaging films, which is expected to boost the demand for renewable naphtha.
Consumption of renewable naphtha in the production of bio plastics & hydrogen is expected to propel market growth. Rising concerns regarding harmful greenhouse emissions is encouraging companies to manufacture bio-based plastics. Countries such as Argentina, Brazil and Indonesia where feedstock is available in abundance, are aiming to increase the renewable naphtha blending to utilize stockpiles of feedstock.
How is Growing Demand for Fuel-Efficient Vehicles Impacting Sales of Renewable Naphtha?
Demand for renewable naphtha is driven by increasing production & fleet of vehicles globally. Global production of automobiles is growing at a steady pace after the economic slowdown encountered due to COVID-19.
Conventional fuels such as petrol & diesel used in vehicles are derived from crude oil. Consumption of these fuels results in emission of harmful gases such as NOx, SOx, CO2, and other greenhouse gases which are hazardous for the environment & ecosystem. Renewable naphtha blended fuel is a great substitute for fossil fuels and it emits less harmful gases as compared to conventional fossil fuel.
Market entrants in emerging countries have a strong opportunity to benefit from increasing demand for renewable naphtha from the automotive industry. Rising crude oil prices have led to higher fuel price. To deal with these prices, several countries have increased blending of biofuels in gasoline and diesels.
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The global economy witnessed a significant downfall during the COVID-19 crisis owing to worldwide lockdown restrictions. Disrupted supply chains and halted production activities resulted in reduced trade activities. The Industrial sector, automotive sector and construction sector have suffered the most, with automotive sales including passenger cars and commercial vehicles plunging to an extent in 2020.
Renewable naphtha market also witnessed stagnated demand from the automotive and plastic production sector. However, with expedited vaccine drives across the globe, and resumptions in production activities, the global renewable naphtha market is anticipated to recover at a steady pace over the forecast period.
Key players operating in the global renewable naphtha market are focusing on expanding their production capacities by setting new production units in emerging economies. In addition to this, players are collaborating with plastic producers to strengthen their market presence. Apart from this, mergers, acquisitions and research and development will remain prominent growth strategies adopted by leading market players. For instance:
- In January 2015, industrial production of UPM BioVerno diesel and naphtha started out in Lappeenranta, Finland. The yearly capability of superior and renewable biofuels is 120 million litres.
By Product Type:
- Light Naphtha
- Heavy Naphtha
By Application:
- Fuel Blending
- Feed for H2 Production
- Feed for Plastics Production
- Ethylene
- Propylene
- Butadiene
- Others
By Region:
- North America
- Latin America
- East Asia
- Europe
- South Asia Pacific
- Middle East & Africa
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Key Questions Answered in the Report
What is the current renewable naphtha market value?
At what rate did the renewable naphtha market grow between 2016 and 2020?
What are the key trends driving renewable naphtha sales?
Who are the leading players in the renewable naphtha market?
What is the market share of leading players in renewable naphtha market?
What will be the renewable naphtha market share in Europe?
What is the current market share of Japan and South Korea in the global renewable naphtha market?
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