Amid growing global concerns over depleting fossil resources and rising fuel emissions, the Southeast Asian green feedstock market is picking up steam. Emerging new products based on environment-friendly feedstock are widening the scope for the green feedstock market. Green chemicals are gaining traction worldwide, especially in Europe and North America. Southeast Asia has an abundance of renewable raw material for the production of biodiesel and bioethanol, which are exported to other countries.
New analysis from Frost & Sullivan (chemicals.frost.com), Southeast Asian Green Feedstock Market, finds that the market earned revenues of over US$19.4 billion in 2009 and estimates this to reach US$34.8 billion in 2016.
"Being rich in agricultural resources, Southeast Asia is a natural destination for many chemical manufacturers," says Frost & Sullivan Industry Analyst Deepan Kannan K. "Though the region is not actively engaged in green chemicals, it supplies platform chemicals such as oleochemicals to the world market."
Recent years have witnessed a demand upswing for feedstocks, such as palm oil, coconut oil, and cassava in Southeast Asia. New production plants have been set up to produce chemicals, such as methyl esters sulphonates (MES) that can be derived from palm oil. Intensifying focus on biofuels is also expected to further expand the growth of the green feedstocks market.
Although the prospects for the market look bright, there are some challenges restraining its momentum. Green feedstocks, such as palm oil and sugar cane are witnessing a significant increase in price. This may affect the green chemicals market which in turn may limit the growth of green feedstocks market.
Apart from this, concern is growing over the sustainability of production of biofuels. Some of the unsustainable ways followed by the biofuel producers in Southeast Asia may nullify the green effect that would have been otherwise delivered by their use. Regulatory bodies in Europe and North America are seriously looking into the issue of sustainability in the utilisation of renewable feedstock for the biofuel production.
To meet the spiralling demand for biofuels, large forest areas are being converted into arable land to make way for the cultivation of cash crops. This will cause serious damage to ecological balance. Although the governments of several countries in Southeast Asia are proactively engaged in preventing deforestation, the voices against this issue are getting stronger. As a result, there is a restriction from Europe on the import of biofuels that do not follow the sustainable practices of manufacturing. This will affect the overall growth of the green feedstock market in Southeast Asia.
"Greater attention to sustainable production of feedstock will enable the growth of palm oil, coconut oil, sugarcane, and cassava," concludes Kannan. "Also, cutting down on C02 emissions will be a vital factor in ensuring fast-track market progression."
The emphasis on sustainable production practices has triggered the gravitation toward second-generation feedstock and biomass for producing fuel and chemicals. Consequently, the growth of the first-generation feedstock will be curtailed.
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Southeast Asian Green Feedstock Market / P3D0