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PYROLYSIS OIL
Pyrolysis oil has successfully transitioned from being an interesting product with low pH and uncertain markets to an effective and economical solution for replacing oil or natural gas with renewable fuel. Several operating technologies exist. Ensyn, with the longest-running commercial plant in Renfrew, Canada, ships products to New England in the US, where they replace oil to heat hospitals. BTG-BTL, in the Netherlands, operates the newest plant, selling pyrolysis oil to replace natural gas for producing high-pressure steam for a dairy and an international coatings and chemicals company. Fortum replaces HFO (heavy fuel oil) with pyrolysis oil in two of its plants in Finland, sells to a nearby heat-plant customer, and has shipped to a large power plant in Sweden. A Canadian company is about to test self-contained 2 t/h pyrolysis plants that can be connected to create commercial-sized plants
MARKET SIZE
Global Pyrolysis Oil Market size was valued at 36.36 billion in 2022 and is poised to grow from 71.71 billion in 2023 to 130.30 billion by 2031, growing at a CAGR of 4.06% during the forecast period (2024-2031)
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The global pyrolysis oil market is projected to grow steadily. One of the primary drivers of this market is the demand for renewable energy sources. Given the world's environmental challenges and the need to reduce greenhouse gas emissions, there is a growing quest for alternative fuels that provide cleaner, more sustainable energy. For instance, biofuel production is rising significantly worldwide, with the United States, Brazil, and Indonesia as the top three producing countries.
Among various types of biofuels, pyrolysis oil, also known as bio-oil, is receiving significant attention. From 2019 to 2020, biofuel production witnessed a drop of around 6%. Nevertheless, the sector recorded a strong comeback, evidenced by an estimated 10.8% growth from 2020 to 2022. Pyrolysis oil is a perfect alternative as it is produced from organic waste materials. It helps reduce dependence on fossil fuels and supports a circular economy. The industrial sectors hold a substantial share of the global pyrolysis oil market. Industries related to power generation, chemicals, and transportation are increasingly using pyrolysis oil as an alternative fuel instead of traditional fuels. Meanwhile, demand from the agricultural sector is also growing due to the byproduct, biochar, which is used as a soil amendment. Biochar is a charcoal-like product enriched with nutrients.
MARKET SEGMENTS
Based on type, the market can be segmented into wood-based pyrolysis oil, waste plastic-based pyrolysis oil, and tire-based pyrolysis oil.
Tire-based pyrolysis oil is the fastest-growing type in the global pyrolysis oil market, predicted to reach 1.67 million tons by 2031 at a CAGR of 4.3%. A significant factor driving the rapid growth of tire-based pyrolysis oil is the rising concern regarding tire waste and its environmental impact. The forecast for the annual amount of waste tires dumped into the environment will grow to 1.2 billion tires by 2030. This increasing generation of waste tires is a significant driving factor for the tire-based pyrolysis oil market. As waste tire amounts rise, there will be a corresponding increase in feedstock supply for pyrolysis, which is further used in the production of pyrolysis oil from tires. Additionally, environmental concerns and legislation regarding tire disposal contribute to the demand for tire-based pyrolysis oil and thus continue to boost this segment.
APPLICATIONS
The heat and power generation segment dominated the pyrolysis market, holding about 1.66 million of the overall market share in 2023. This segment is projected to expand with a CAGR of 4.3%. Pyrolysis technology is primarily used to transform various types of biomass feedstocks into heat and electricity. An established infrastructure and increasing emphasis on renewable energy sources enhance the dominance
of heat and power generation in the pyrolysis market. According to the International Energy Agency, heating is currently the largest consumer of energy worldwide. In 2021, heat use grew by 4% compared to 2020 due to the global economic recovery. This presents a significant opportunity for the pyrolysis oil market, especially regarding the availability of alternatives to meet the growing demand for energy while reducing dependence on traditional biomass and improving sustainability.
Transport fuel is the fastest-growing application, projected to reach $2.39 million by 2031 from an initial base of $78.57 million in 2021, at a CAGR of 3.8%. This application addresses the need for sustainable alternatives to traditional fossil fuels, offering the opportunity to decrease greenhouse gas emissions and enhance energy security. With the increasing focus on reducing carbon footprints and implementing renewable fuel standards and policies, the growth in pyrolysis production for transportation fuel is rapid. Biofuels currently provide about 6% of the total energy used in the U.S. transportation sector.
PYROLYSIS OIL MARKET DRIVERS
Growing environmental concerns, largely about plastic pollution, act as a major impetus to the growth of the pyrolysis oil market. According to the latest analysis by SkyQuest, around 14 million tons of plastics flow into the world's oceans annually, which is highly hazardous to aquatic life and the associated ecosystems. This is a shocking statistic and thus points to the rising need for efficient solutions to reduce the nasty effects of plastic wastes on the environment. Reacting to these disturbing projections, many people are starting to realize the imperative need to embracing feasible waste management techniques and substitutes for traditional plastics.
RENEWABLE ENERGY POLICIES AND INCENTIVES
Most governments try to promote renewable energy through target-oriented programs. These programs include feed-in tariffs, tax credits, and subsidies for projects related to bioenergy production, including pyrolysis oil. Governmental financial and regulatory support will strengthen the pyrolysis oil market as a renewable energy source and thus act as a driver for this market.
RESTRAINTS
The pyrolysis oil market is relatively young compared to conventional markets for fossil fuels. This has resulted in the absence of well-developed infrastructure for pyrolysis oil production, storage, and distribution. This underdeveloped infrastructure restrains market growth by preventing its efficient supply and sis technology, handling its technical complexities has been a critical factor for its extensive adoption and effectiveness within the marketplace.
PYROLYSIS OIL MARKET COMPETITIVE LANDSCAPE
The pyrolysis oil market is fragmented, with many small and medium-sized enterprises operating in the industry. A combination of technological innovation, government regulations, and environmental concerns will further shape the competitive landscape of the global pyrolysis market. Companies in the market tend to develop and deploy efficient pyrolysis technologies for the effective conversion of high-quality end products from a wide range of waste materials. These technologies maximize resource recovery while minimizing the environmental impacts of residue disposal. Product innovation is another key strategy adopted by major market players. The adoption of product innovation as a strategic imperative demonstrates the industry's willingness to improve in terms of environmental challenges, efficiency, and increasing demands for eco-friendly solutions.
PYROLYSYSIS OIL MARKET RECENT DEVELOPMENTS
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In November 2023, Vitol and LBC announced a significant agreement for the storage and handling of pyrolysis oil at the Port of Rotterdam. The agreement highlighted Vitol's commitment to growth in the renewable energy portfolio and the role LBC would play in providing state-of-the-art storage and handling facilities.
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In November 2023, Pyrum Innovations AG is a leader in sustainable end-of-life tire recycling through patented pyrolysis technology. Now, the warm-up of its new reactor 2 at the main plant in Dillingen/Saar has reached a major milestone: for the first time, a reactor was started and heated to the production temperature of about 650ÅãC.
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In March 2023, Klean Fuels announced that it has made significant progress in its projects related to sustainable fuel solutions.
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