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Market Overview

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Pyrolysis oil, also known as biocrude or bio-oil, is a liquid substance obtained through the pyrolysis process and subsequent cooling. It serves as a synthetic fuel that acts as a substitute for petroleum. This product is a complex blend of molecules, consisting of over 200 different compounds, which are the result of depolymerization during pyrolysis treatment.

The global pyrolysis oil market is expected to reach a valuation of over USD 353 million by the end of 2022. Furthermore, it is projected to grow at a compound annual growth rate (CAGR) of over 4.1% during the forecast period.

The COVID-19 pandemic had a significant impact on industrial activities between 2020 and 2021 due to government-imposed lockdowns and restrictions. This led to a slowdown in the growth of the pyrolysis oil market. The chemical industry and the heat and power generation sector were particularly affected, experiencing reduced raw material supply, limited work hours, labor shortages, and financial constraints. Consequently, the adoption of pyrolysis oil, which is a sustainable yet unconventional fuel with storage and transportation challenges, was hindered in these sectors. However, since the easing of the pandemic in mid-2021, industries have been gradually recovering. The oil and gas, chemicals, and power sectors have shown signs of recovery with increased downstream consumption, as restrictions were lifted and sustainability initiatives gained momentum. As a result, market players have regained their interest in pyrolysis oil.

In the medium term, the growing demand for eco-friendly fuel and alternative raw materials, as well as the increasing utilization of pyrolysis oil for heat and power generation, are the key factors driving the market’s growth. However, challenges related to storage, transportation, and application of pyrolysis oil are expected to restrain market growth during the forecast period. Nevertheless, the emerging applications of pyrolysis oil in biorefineries hold promise for creating lucrative growth opportunities in the global market.

Europe currently holds the largest market share for pyrolysis oil. However, Asia-Pacific is anticipated to witness the highest CAGR during the forecast period. Europe’s dominance can be attributed to the robust demand for pyrolysis oil in applications such as combustion in boilers, transportation upgrading, and chemical production.

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Market Segmentation

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The market is segmented based on various factors, including raw material, application, and region.

Segmentation by Raw Material
Waste Plastic
Waste Rubber
Wood
Oil Sludge
Other Raw Materials

Segmentation by Application
Fuels
Chemicals

Segmentation by Region
North America – United States, Canada, and Mexico
Europe – United Kingdom, Germany, France, Italy, Spain, and Rest of Europe
Asia-Pacific – China, Japan, India, South Korea, and Rest of Asia-Pacific
Latin America – Brazil, Argentina, and Rest of Latin America
Middle East and Africa – Saudi Arabia, South Africa, Morocco, and Rest of Middle East and Africa

In 2022, wood and biomass accounted for the largest share in the market, primarily due to their wide availability. These materials are highly preferred for their ability to produce high-quality oil and achieve high yields. The production of pyrolysis oil using wood and biomass is also highly efficient, which positively impacts its usage. Wood is commonly used as the raw material for pyrolysis oil production, including wood chips, sawdust, and forest/agricultural waste. Pyrolysis of wood and biomass can be conducted through either slow or fast pyrolysis processes. In the wood pyrolysis process, the wood is thermally decomposed at a high temperature of approximately 500°C without oxygen, resulting in the production of bio-oil liquids, gases, and char. The obtained pyrolysis oil from wood typically has acidic properties with a pH of 2.5-3.4, contains 20-30% water, 0.04-0.24% ash, and has viscosities between 35 and 53 centistokes (cSt) at 40°C. Pyrolysis of organic substances like wood generates gas and liquid products, leaving behind a solid residue known as char. Carbonization refers to extreme pyrolysis, where the residue consists mostly of carbon. Wood pyrolysis forms the basis for various methods used to produce liquid or gaseous fuels from wood and biomass, taking advantage of their high carbon content. Thermal processes such as pyrolysis, gasification, and torrefaction are employed to convert wood and biomass into biofuels.

Pyrolysis oil finds significant application as fuel across multiple sectors. Its fuel value ranges from 50% to 70% that of petroleum-based fuels, making it suitable for use as boiler fuel or for transformation into renewable transportation fuels. Pyrolysis oil is widely used as an industrial fuel, substituting furnace oil in heavy industries such as construction heating, steel factories, glass factories, cement factories, power factories, boiler factories, and hotel heating. It also holds potential for future use in boiler-based electricity production. Additionally, refined or upgraded pyrolysis oil can be utilized in gas turbine generators and diesel generators. Many countries are considering gas turbine generators as a replacement for coal-fired plants to reduce carbon emissions during electricity generation. Moreover, pyrolysis oil serves as a combustion fuel in various industries including cement, steel, glass, brick plants, and others. Besides direct combustion, pyrolysis oil can be used as a feedstock for refining diesel fuel through distillation. The resulting diesel can then be used in machinery like trucks, tractors, ships, and diesel generators. Given the substantial fuel consumption in industrial applications such as power generation, industrial boilers, diesel engines, and power generators like gas turbines, the demand for pyrolysis oil-based fuels is expected to increase in the forecast period.

Europe currently dominates the global market, holding a significant market share, and is projected to maintain its dominance in the coming years. Within Europe, pyrolysis oil finds extensive applications in combustion boilers, engines, turbines, transportation fuel upgrading, and renewable feedstock for chemicals and materials. Major industries in the region, such as steel, cement, and transportation, benefit from the usage of pyrolysis oil. For example, France ranks third in crude steel production among European Union countries, producing approximately 13.9 million tons in 2021, a 20% increase compared to 2020. The German government is actively implementing new incentives and regulations to swiftly reduce carbon emissions. Germany also heavily relies on imports to meet its oil and gas demand, with import rates reaching 63.7% for oil and 95% for natural gas in 2021. To decrease dependence on imports, the German government is encouraging biofuel production through incentives and other benefits. In the United Kingdom, the government has issued guidance (Excise Notice 179e) from April 1, 2022, promoting the use of various biofuels, thus creating potential demand for pyrolysis oil. The production of pyrolysis oil offers significant opportunities in addressing plastic waste management issues and meeting energy demand for heating applications. For example, in August 2022, Italian company Maire Tecnimont SpA announced a Front-End Engineering Design (FEED) contract for an advanced mechanical recycling plant for municipal plastic waste in Europe. This plant aims to establish a pyrolysis-based recycling facility for polyolefins, capable of processing 75,000 tons of waste per year.

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Competitive Landscape

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The global pyrolysis oil market is characterized by fragmentation, with key players holding relatively small market shares that have minimal individual impact on market demand. Among the prominent players in the market are Twence, Green Fuel Nordic Oy, Bioenergy AE Cote-Nord, New Hope Energy, and Pyrocell.

Bioenergy AE Côte-Nord, a joint venture between Ensyn, Arbec, and Group Remabec, occupies the leading position in the market. The company specializes in the production of wood-based pyrolysis oil and operates a plant in Canada with an annual capacity of 45,600 tons of bio-oil.

Twence holds the second position as of 2022, following its acquisition of the Empyro plant by BTG-BTL. The company manufactures pyrolysis oil at its pyrolysis plant located on the Boortorenweg in Hengelo, Netherlands, and stores it in on-site tanks. Twence is able to produce approximately 650 kg of oil from every 1,000 kg of biomass. The company has a strong presence not only in the Netherlands but also in other regions within the European Union.

Key companies profiled in this report include Alterra Energy, Bioenergy Ae Cote-Nord, Ensyn, Green Fuel Nordic Oy, Mk Aromatics Limited, New Energy Kft., New Hope Energy, Nexus Circular, Plastic Advanced Recycling Corp., Plastic Energy, Pyrocell (setra), Quantafuel ASA, Trident Fuels Pty Ltd, Twence.

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Recent Industry Developments

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In May 2022, ArcelorMittal Mining Canada and BioÉnergie AE Côte-Nord Canada entered into a three-year agreement. According to the agreement, ArcelorMittal’s pellet plant will be supplied with 16 million liters of pyrolytic oil annually. ArcelorMittal Mining Canada is a prominent steel and mining company that ranks among the top five global producers of iron ore products.

In another development in May 2022, New Hope Energy and TotalEnergies made an announcement regarding their partnership. The two companies will collaborate on the construction of an advanced recycling plant located in Texas. The purpose of the plant is to convert end-of-life plastic waste into recycled feedstock. TotalEnergies will partially purchase the feedstock and further transform it into virgin-quality polymers for use in food-grade packaging.

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Key Questions Answered

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What is the study period for the Pyrolysis Oil Market?
The Pyrolysis Oil Market has been studied from 2018 to 2028.

What is the growth rate of the Pyrolysis Oil Market?
The Pyrolysis Oil Market is projected to grow at a compound annual growth rate (CAGR) of over 4% over the next five years.

Which region has the highest growth rate in the Pyrolysis Oil Market?
The Asia Pacific region is experiencing the highest CAGR during the period of 2018 to 2028 in the Pyrolysis Oil Market.

Which region has the largest share in the Pyrolysis Oil Market?
As of 2022, Europe holds the highest market share in the Pyrolysis Oil Market.

Who are the key players in the Pyrolysis Oil Market?
The major companies operating in the Pyrolysis Oil Market include Twence, Green Fuel Nordic Oy, Bioenergy AE Cote-Nord, New Hope Energy, and Pyrocell.