The global renewable naphtha market is projected to top USD 466.58 million in 2023, finds Future Market Insights (FMI) in a recent market survey. Driven by increasing demand for eco-friendly alternatives for synthetic plastic, sales of renewable naphtha are poised to grow at an impressive 13.7% CAGR through 2033.
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 USD 1,698 million in 2033. Renewable fuels and carbon emissions reduction policies have been implemented in many countries. A number of these measures exist, including mandates for the use of renewable fuel, tax incentives, and mechanisms for pricing carbon. A favorable market environment can spark demand for renewable naphtha and encourage its growth.
Renewable naphtha can be produced through pyrolysis, gasification, and biochemical conversion due to advances in biofuel and renewable chemical technologies. Researchers and developers are working on improving the efficiency, cost-effectiveness, and scalability of these processes.
Renewable naphtha has caught the attention of a number of companies, including energy companies, chemical manufacturers, and oil companies. Researchers and investors have partnered and invested to advance research, pilot projects, and commercial-scale production, suggesting an expanding market.
The production of renewable naphtha is made possible in part by using non-food crops, agricultural residues, and organic wastes as feedstocks. Diversifying feedstock sources has been seen as a means of ensuring sustainability and minimizing competition with food production on the market.
| Report Attributes | Details |
|---|---|
| Renewable Naphtha Market Size (2022) | USD 422 Million |
| Renewable Naphtha Market Share Value (2023) | USD 466.58 Million |
| Renewable Naphtha Market Anticipated Forecast Value (2033) | USD 1698 Million |
| Renewable Naphtha Market Projected Growth Rate (2023 to 2033) | 13.7% |
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Demand for renewable naphtha grew at a 10.5% CAGR between 2018 and 2022. 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.
The renewable naphtha market is anticipated to grow considerably in the coming years. The global population is being 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, and packaging films, which is expected to boost the demand for renewable naphtha.
Consumption of renewable naphtha in the production of bioplastics & hydrogen is expected to propel market growth. Rising concerns regarding harmful greenhouse emissions are 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.
Bio-based plastics are expected to gain higher acceptance in various industries as they are some effective and sustainable alternatives for fossil fuels. Increasing demand for plastic-based products such as home decor materials and bespoke articles will continue propelling sales of renewable naphtha over the forecast period.
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 the emission of harmful gases such as NOx, SOx, CO2, and other greenhouse gases which are hazardous to 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 fuels.
Market entrants in emerging countries have a strong opportunity to benefit from the increasing demand for renewable naphtha from the automotive industry. Rising crude oil prices have led to higher fuel prices. To deal with these prices, several countries have increased the blending of biofuels in gasoline and diesel.
For instance, the Government of Indonesia has aimed to increase the blending of biodiesel from 10% to 15%. This is indicative of lucrative growth prospects for players operating in the renewable naphtha market.
Principal Consultant
Growing Investments in Bio-oil Projects will Grow Demand in Coming Years
The renewable naphtha market is expected to reach a CAGR of 13% during the forecast period. Increasing demand for plastic-based products is anticipated to create more opportunities for the renewable naphtha market in the United States. Increasing government regulations and environmental concerns are expected to increase demand for carbon capture and storage.
Apart from plastics sales, shifting consumer preference towards bio-based plastics is spurring demand for renewable naphtha in various end-use industries. This is anticipated to bode well for the renewable naphtha market in the United States over the forecast period.
Biofuel Adoption will Likely Increase Demand for Renewable Naphtha in the Indian Market
Demand for renewable naphtha is projected to soar at a 9.6% CAGR in India in 2033, driven by the high consumption of renewable naphtha in plastics, automotive, and bio plastics manufacturing industries. Manufacturers are aiming to expand their production facilities in India to cater to the growing demand for renewable naphtha in the country.
Increasing applications of plastics in the construction sector for décor in commercial and residential buildings is projected to propel sales of renewable naphtha in the forthcoming years. Besides this, favorable government-backed investments in the development of infrastructure and the automotive sector will continue enabling sales of renewable naphtha through 2033.
Growth of Automotive Sales is Expected to Grow Demand in Comin Years
China is expected to remain one of the key manufacturers and consumers of renewable naphtha, accounting for about 82% of the East Asia market share in 2023. China is increasingly ramping up renewable naphtha production capacity in response to growing demand from the automotive and plastic sectors. This trend is anticipated to continue over the forecast period.
Since the advent of renewable naphtha for biofuel and chemical production, China has developed into one of the top markets in the last few years. In order to meet the growing demand for renewable chemicals, these countries are actively promoting renewable naphtha as a biofuel and chemical.
Support for Renewable Fuels and Policies Enacted by the Government will augment demand
Germany is expected to account for about 33.0% of the Europe renewable naphtha market share in 2031. To cater to a growing demand for renewable naphtha, players in Germany are increasing their production capacity.
The REACH regulations regarding fuel blending, waste disposal, and bio-plastics are compelling manufacturers to produce renewable naphtha and bioplastics in collaboration. These factors are anticipated to augment the growth of the renewable naphtha market in Germany through 2033.
As government policies and demand to reduce emissions continue to grow, the market for carbon dioxide reduction products has been growing and booming. As government initiatives and programs become more popular on the market, demand will likely increase in the future.
With its Renewable Nature and Diverse Uses, Light Renewable Naptha is Expected to Grow in the Market
Based on product type, the light naphtha segment is projected to hold a dominant share of approximately 96% of the total renewable naphtha market share. The growing need for eco-friendly alternatives to plastic and high demand for bio-based materials will continue providing tailwinds to light renewable naphtha sales.
Given the product's nature and scope of application, manufacturers operating in the renewable naphtha market are investing in research and development to launch new products for a wide range of applications.
The light-renewable naphtha fuel can also be used as a raw material for various products, such as solvents and resins. Furthermore, it can be used as a gasoline additive, thus reducing the transportation sector's carbon footprint. A cleaner-burning alternative to conventional fossil fuels, naphtha can also be used as a fuel in certain applications for specialized engines.
Growing Use of Plastics in a Variety of Applications is Likely to Drive Demand for Plastic in Coming Years
Among the end-use segments, the feed for plastic production segment is projected to account for about 76% of the total renewable naphtha market share. The plastics sector is expected to grow at a rapid pace due to increasing demand for consumer goods, and increasing investment in bio-based plastic material production.
Renewable naphtha demand is expected to increase because it is used in applications that require an intermediate product, for example, the production of hydrogen gas, where its acts as an intermediate product.
The segment is further expected to grow continuously in the near future owing to high demand from the plastics, bioplastics manufacturing units, and the fuel blending sector. In addition, the trend for bio-based plastics will help propel the growth of the renewable naphtha incoming period.
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Changing markets and technology develops, and business trends are constantly changing. Around renewable naphtha, there is an expanding startup ecosystem that seems to be thriving. The following are some key renewable naphtha startups:
Key players operating in the global renewable naphtha market are focusing on expanding their production capacities by setting up 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:
| Attributes | Details |
|---|---|
| Forecast Period | 2023 to 2033 |
| Historical Data Available for | 2018 to 2022 |
| Market Analysis | USD billion for value |
| Key Regions Covered | North America; Latin America; Western Europe; Eastern Europe; South Asia; East Asia; Middle East & Africa |
| Key Countries Covered | United States, Canada, Brazil, Mexico, Germany, United Kingdom, France, Spain, Italy, Poland, Russia, Czech Republic, Romania, India, Bangladesh, Australia, New Zealand, China, Japan, South Korea, GCC Countries, South Africa, Israel |
| Kay Segments Covered | Product Type, Application, Region |
| Key Companies Profiles | Neste Oyj; ENI; Darling Ingredients Inc.; CNPC; Diamond Green Diesel; Renewable Energy Group, Inc.; Marathon Petroleum Corp; Preem; Philips 66; UPM Biofuels |
| Customization & Pricing | Available Upon Request |
The market is estimated to register a 13.7% CAGR through 2033.
Shifting consumer preference for bio-based products drives market expansion.
From 2018 to 2022, the market expanded at a 10.5% CAGR.
The United States is anticipated to expand at a 13% CAGR until 2033.
By 2033, the market is likely to reach USD 1,698 million.
1. Executive Summary 2. Market Overview 3. Market Background 4. Global Market Analysis 2018 to 2022 and Forecast, 2023 to 2033 5. Global Market Analysis 2018 to 2022 and Forecast 2023 to 2033, By Product Type 5.1. Light Naphtha 5.2. Heavy Naphtha 6. Global Market Analysis 2018 to 2022 and Forecast 2023 to 2033, By Application 6.1. Fuel Blending 6.2. Feed for H2 Production 6.3. Feed for Plastics Production 6.3.1. Ethylene 6.3.2. Propylene 6.3.3. Butadiene 6.3.4. Others 7. Global Market Analysis 2018 to 2022 and Forecast 2023 to 2033, By Region 7.1. North America 7.2. Latin America 7.3. Western Europe 7.4. Eastern Europe 7.5. South Asia and Pacific 7.6. East Asia 7.7. Middle East and Africa 8. North America Market Analysis 2018 to 2022 and Forecast 2023 to 2033, By Country 9. Latin America Market Analysis 2018 to 2022 and Forecast 2023 to 2033, By Country 10. Western Europe Market Analysis 2018 to 2022 and Forecast 2023 to 2033, By Country 11. Eastern Europe Market Analysis 2018 to 2022 and Forecast 2023 to 2033, By Country 12. South Asia and Pacific Market Analysis 2018 to 2022 and Forecast 2023 to 2033, By Country 13. East Asia Market Analysis 2018 to 2022 and Forecast 2023 to 2033, By Country 14. Middle East and Africa Market Analysis 2018 to 2022 and Forecast 2023 to 2033, By Country 15. Key Countries Market Analysis 16. Market Structure Analysis 17. Competition Analysis 17.1. Neste 17.2. ENI 17.3. Darling Ingredients Inc. 17.4. CNPC 17.5. Diamond Green Diesel 17.6. Renewable Energy Group, Inc. 17.7. Marathon Petroleum Corp. 17.8. Preem 17.9. Phillips 66 17.10. UPM Biofuels 18. Assumptions & Acronyms Used 19. Research Methodology
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Renewable Naphtha Market
