Bio Based Transformer Oil Market Research Report Information By Type (Natural Esters and Synthetic Esters), By Packaging Type (Bulk Packaging, Drums and Containers, and Cans & Bottles), By Distribution Channel (Direct Sales and Indirect Sales), By Application (Distribution Transformers, Power Transformers, Instrument Transformers), By End-User (Utilities, Commercial, and Industrial), By Energy Generation (Conventional Energy and Non-Conventional (Renewable) Energy), By Region -Global Forecast to 2032

Global Bio Based Transformer Oil Market Overview

Bio Based Transformer Oil Market Size was valued at USD 145,487.4 thousand in 2023. The Bio Based Transformer Oil industry is projected to grow from USD 155,981.4 thousand in 2024 to USD 273,979.7 thousand by 2032, exhibiting a compound annual growth rate (CAGR) of 7.30% during the forecast period (2024 - 2032). Bio based transformer oil refers to an insulating fluid used in transformers, primarily derived from renewable and sustainable feedstocks such as vegetable oils, or animal fats. Unlike traditional transformer oils, which are predominantly mineral-based and derived from crude oil, bio based transformer oils offer several environmental and performance advantages. One of the significant attributes of the bio based transformer oil is its renewable nature which aligns with the sustainability objectives aimed at reducing carbon emission. Also, bio based transformer oil exhibits certain excellent properties such as high oxidation resistance and thermal stability owing to which its usage in transformers is increasing substantially as these performance attributes of the product ensures the reliable operation along with prolonged service life of the equipment.  

Source: Secondary Research, Primary Research, MRFR Database and Analyst Review

Bio Based Transformer Oil Market Trends

• 
  

  INCREASING USE OF RENEWABLE PRODUCTS

  
  

The rising use of renewable products is significantly driving the demand for bio based transformer oil. The rapid transition towards renewable resources in order to reduce the dependency on fossil fuels along with rising emphasis on mitigating the impacts on the climate change are boosting the demand for bio based transformer oil. Bio based transformer oil offers a sustainable alternative to the conventional oils that are obtained from finite fossil fuel as it utilizes renewable feedstocks such as animal fats, vegetable oils and algal oils. Thus, the use of renewable feedstocks in bio based transformer oils helps in reducing the carbon footprint associated with the transmission and distribution of power and aligns with the goals of renewable energy transition which seeks to decarbonize the electricity sector and promote the cleaner and more sustainable energy sources.

Furthermore, the rising technological advancements is also playing a vital role in the growth of bio based transformer oil market. With the increasing focus on improving the cost effectiveness and performance of bio based products, the producers of transformer oils will be able to manufacturer transformer oils with improved thermal stability, biodegradability and oxidation resistance. These performance advantages will further make the bio based transformer oil an attractive choice for its end users that are seeking sustainable and reliable solutions. The awareness and preference of the consumers for environmentally friendly products is accelerating and this factor is contributing significantly towards boosting the market demand of bio based transformer oils. As the consumers are becoming more conscious about the environmental impacts of their purchasing decisions, there is an increasing demand for products that have low environmental footprint.

 Moreover, the availability of various types of feedstock sources for manufacturing bio based transformer oils is positively influencing the market of bio based transformer oil. By using renewable feedstocks such as animal fats and vegetable oils, the manufacturers can reduce their dependency on any one resource, and this helps in mitigating the risks associated with the fluctuations in supply and prices of the feedstock. Further, many countries have implemented stringent regulations for mitigating the climate change and to promote the use of renewable sources as a result various industries are shifting towards using bio based transformer oils. Also, the significant performance advantages offered by bio based transformer oil such as high oxidation resistance and thermal stability are further supporting its market demand globally.

RISING DEMAND FOR ELECTRICITY

The rising demand for electricity worldwide is one of the significant factors boosting the market growth of bio based transformer oil. The rapid increase in the electricity demand can be attributed to population growth, industrialization, urbanization and expanding usage of electronic devices. As the consumption of electricity continues to grow, the need for efficient and reliable electrical infrastructure including transformer is propelling. Transformers plays a vital role in transmission and distribution of electricity by stepping up or stepping down the voltage levels for facilitating the efficient transmission over long distances. These are very essential components of the electrical grids and power distribution networks, further ensuring reliable and safe transmission of electricity from the generation sources to the consumers. Problems such as dielectric breakdown and overheating can impact the reliability, performance and lifespan of transformers and thus the use of transformer oil is very necessary for ensuring proper functioning of the transformers.

Transformer oils helps in cooling and insulating components of transformers along with helping in dissipating heat and providing electrical insulation. Thus, for enhancing the performance and efficiency of transformers, the use of transformer oil is increasing substantially. The traditional transformer oils that are obtained from petroleum-based sources poses environmental and safety risks owing to their flammability, toxicity and limited biodegradability, thus the shift towards bio based transform oils that are derived from renewable sources and are an effective alternative to the petroleum-based transform oil is growing rapidly. Moreover, there are several advantages such as low toxicity, high biodegradability and improved fire safety properties offered by bio based transform oils that are supporting its market growth.

RISING NEED FOR GRID MODERNIZATION

Grid modernization refers to the upgradation and enhancement of the electricity transmission and distribution systems for fulfilling the increasing need for power. In this process, advanced technologies are integrated for enhancing the resilience of the infrastructure along with improving grid efficiency and accommodating the integration of renewable energy sources. Factors that are leading to rising need for grid modernization include aging infrastructure, improving energy efficiency and enhancing reliability. Adoption of bio based transformer oil plays a crucial role in grid modernization by enhancing safety, performance and sustainability of the transformer used in the electricity grid. Transformer oil is used for enabling cooling and insulating transformers. Transformer oil derived from mineral oil poses safety and environmental concerns owing to their flammability and toxicity. Bio based transformer oil offers more environmentally friendly solutions as it is obtained from natural feedstocks. Increasing focus on environmental sustainability and renewable energy integration are contributing significantly towards boosting the demand for bio based transformer oil in grid modernization. For reducing greenhouse gas emission and mitigating climate change, there is a growing transition towards cleaner energy solutions such as solar and wind power.

With the increasing focus on using renewable energy sources, the need for transformers for accommodating the growing capacity of renewable energy generation facilities is increasing and thus for ensuring the proper functioning of the transformers, the demand for bio based transformer oil is rising considerably. Transformers are a very crucial component of grid infrastructure and thus their reliable operation is essential. Bio based transformer oil’s superior thermal and oxidative stability helps in improving the performance and longevity of the transformers. Another important factor that is driving the demand for bio based transformer oil is the increasing need for risk mitigation and safety. Safety is a paramount concern in operation of electrical infrastructure, thus the safety advantages offered by bio based transformer oil such as higher flash and fire points which decreases the risk of fire in the event of failure of transformer, is positively influencing its market demand.

Bio Based Transformer Oil Market Insights

Bio Based Transformer Oil Market by Type Insights

The Bio Based Transformer Oil Market segmentation, based on type has been segmented as natural esters and synthetic esters. In 2023, the natural esters segment generated the market revenue share of 35.66% in the Global bio-based transformer oil market and is expected to experience a CAGR of 7.60% in the coming years. Natural esters are bio-based transformer oils derived from vegetable oils such as soybean, rapeseed, or coconut oil through a process called transesterification. These oils are gaining popularity in the industry due to their renewable nature, biodegradability, and excellent insulating properties, making them a sustainable and environmentally friendly choice for transformer applications. One of the key advantages of natural esters is their high biodegradability, which significantly reduces the environmental impact in case of leaks or spills compared to traditional mineral oils. This characteristic aligns with the increasing focus on sustainability and environmental responsibility in the power industry. Natural esters also exhibit excellent dielectric strength, which is crucial for insulating transformers and preventing electrical breakdowns. Their high flash and fire points enhance safety in transformer applications, reducing the risk of fires and explosions. Additionally, natural esters have good thermal conductivity and stability, contributing to the overall efficiency and reliability of transformers. Also\, natural esters are non-toxic and pose minimal health risks to workers handling the transformer oil, further enhancing their appeal in terms of safety and occupational health. Their compatibility with existing transformer materials and seals makes them a convenient choice for retrofitting older transformers with eco-friendly insulating fluids.

Bio Based Transformer Oil Market by Packaging Type

Based on application, the Bio Based Transformer Oil Market is segmented as bulk packaging, drums & containers, and cans & bottles. In 2023, the drums & containers segment held the largest market revenue share of 56.98% and is expected to grow at a CAGR of 7.38% in the projected period. Drums and containers, such as 55-gallon drums or smaller containers, provide a more manageable and accessible packaging solution for power utilities, industrial facilities, and even smaller-scale commercial and residential users. These packaging options allow for the easy transportation, storage, and on-site handling of bio-based transformer oils, making them a popular choice for users who do not require the large volumes associated with bulk packaging. The versatility of drums and containers is a key driver in this segment. These packaging solutions can be easily transported, stacked, and stored, providing flexibility in logistics and inventory management. This is particularly important for users who may have limited storage space or need to maintain smaller inventories of transformer oil. Moreover, the increased emphasis on safety and handling in the power industry has contributed to the growth of the drums and containers segment. Smaller packaging options, such as cans or drums, often feature enhanced safety features, such as tamper-evident seals, spill-proof designs, and ergonomic handles, which help to mitigate the risks associated with the transportation and use of transformer oils. These safety considerations are crucial for end-users, particularly in industrial and commercial settings, where the proper handling and storage of hazardous materials are of paramount importance.

Bio Based Transformer Oil Market by Distribution Channel Insights

The Bio Based Transformer Oil Market segmentation, based on distribution channel the market has been segmented as direct sale and indirect sale. In 2023, the indirect sales segment held a market revenue share of 57.34% which is expected to grow at a CAGR of 7.14% in the forecast period 2024-2032. Indirect sales in the global bio-based transformer oil market have also been experiencing notable growth, driven by distinct factors that complement the direct sales channel. Indirect sales involve the use of intermediaries such as distributors, wholesalers, and retailers to reach end-users, offering a different set of advantages and opportunities for manufacturers. One key driver of the growth of indirect sales is the ability to leverage the existing distribution networks and relationships of intermediaries to reach a broader customer base. Distributors and wholesalers often have established networks and market presence, enabling manufacturers to access new markets and customers more efficiently. Furthermore, indirect sales channels provide manufacturers with logistical support, inventory management, and market insights that can enhance their market reach and operational efficiency. By partnering with experienced intermediaries, manufacturers can focus on product development and innovation while relying on the expertise of distributors to handle sales and distribution.

Bio Based Transformer Oil Market by Application Insights

The Bio Based Transformer Oil Market segmentation, based on application the market has been segmented as distribution transformer, power transformers, and instrument transformers. In 2023, the distribution transformers segment held the significant market revenue share of 51.57%, and in the forecast period, it is anticipated to grow by 7.44%. Distribution transformers play a crucial role in power distribution networks, stepping down the voltage from high-transmission levels to the lower voltages used by residential and commercial consumers. These transformers are often located near populated areas, making the selection of the insulating fluid a critical consideration for safety and environmental reasons. Bio-based transformer oils, including both synthetic esters and natural esters, have become increasingly popular choices for distribution transformer applications. Their superior fire safety characteristics, with high flash and fire points, make them well-suited for deployment in urban and suburban areas where the risk of fire hazards is a significant concern. The enhanced thermal stability of these bio-based oils also helps to improve the overall efficiency and reliability of distribution transformers, reducing the likelihood of unexpected failures or outages. Moreover, the biodegradable nature of bio-based transformer oils is a significant advantage in distribution transformer applications. In the event of a spill or leak, these eco-friendly fluids will readily decompose, minimizing the environmental impact and reducing the need for costly and disruptive cleanup efforts. This aligns with the growing emphasis on sustainability and environmental responsibility in the power industry, making bio-based transformer oils an attractive choice for distribution network operators.

Bio Based Transformer Oil Market by End-User Insights

The Bio Based Transformer Oil Market segmentation, based on end-user the market has been segmented as utilities, commercial, and industrial. In 2023, the utilities segment held the largest market revenue share of 60.31%, and in the forecast period, it is anticipated to grow by 7.27%. The utilities segment is the largest and most significant end-use sector for bio-based transformer oils. Power utilities, including electricity transmission and distribution companies, are the primary consumers of these eco-friendly oils. Utilities are increasingly adopting bio-based transformer oils due to the growing emphasis on sustainability, environmental regulations, and the need to reduce the carbon footprint of their operations. Bio-based transformer oils offer several advantages to utilities, such as improved biodegradability, lower toxicity, and better thermal and oxidative stability. These properties make them a preferred choice for use in transformers, which are critical components of the power grid infrastructure. As utilities continue to invest in grid modernization and the integration of renewable energy sources, the demand for bio-based transformer oils is expected to rise steadily.

Bio Based Transformer Oil Market by Energy Generation Insights

The Bio Based Transformer Oil Market segmentation, based on energy generation the market has been segmented as conventional energy and non-conventional energy. In 2023, the conventional energy segment held the largest market revenue share of 73.75% and is expected to grow at a CAGR of 7.06% in the projected period. Conventional energy sources have traditionally dominated the global energy landscape, with bio-based transformer oil playing a crucial role in enhancing the efficiency and reliability of transformers within this sector. As the demand for electricity continues to rise, particularly in industrial and residential sectors, the conventional energy segment is expected to witness steady growth. The use of bio-based transformer oil in conventional energy generation facilities, such as coal-fired power plants and natural gas power stations, contributes to improved operational performance and longevity of transformers. With ongoing investments in upgrading aging infrastructure and increasing energy consumption worldwide, the demand for bio-based transformer oil in the conventional energy segment is projected to remain robust.

Bio Based Transformer Oil Market Regional Insights

Based on Region, the Bio Based Transformer Oil Market is segmented into North America, Europe, Asia-Pacific, Middle East & Africa, and Latin America. In 2023, the Asia Pacific region held the largest market revenue share of 51.76%, which is expected to grow at a CAGR of 7.66% in the forecast period 2024-2032. The Asia Pacific region, with its significant electricity production capacity and diverse energy landscape, presents a promising market for bio-based transformer oils. As the region continues to lead in global electricity production, there is a growing demand for sustainable and environmentally friendly solutions in the power sector, including the adoption of bio-based transformer oils. The Asia Pacific region, with its substantial electricity production capacity, is a key player in the global energy landscape. In 2021, the region accounted for a significant portion of the world's electricity production, with a total of 14,030,721 GWh. This dominance is driven by countries like China, India, Japan, and Korea, which are among the top electricity producers in the region.

Bio Based Transformer Oil Market Key Market Players & Competitive Insights

The global bio-based transformer oil market is a consolidated market, with a few key players dominating the market share. These key players have adopted various strategies to maintain their market position and expand their market reach. Leading companies are focusing on developing innovative bio-based transformer oils with enhanced performance characteristics. This includes oils with improved dielectric strength, thermal stability, and environmental sustainability. By introducing advanced products, companies aim to attract a wider customer base and differentiate themselves from competitors. Many players are forming strategic partnerships and collaborations with technology providers, research institutions, and industry stakeholders. These collaborations facilitate knowledge sharing, access to advanced technologies, and joint research efforts to develop cutting-edge solutions. Such partnerships also help in expanding market reach and distribution networks.

Shell plc: Shell plc is a British multinational oil and gas company headquartered in London. The company is a public limited company with a primary listing on the London Stock Exchange (LSE) and secondary listings on Euronext Amsterdam and the New York Stock Exchange. Shell is the second largest investor-owned oil and gas company in the world by revenue, and one of the largest companies in the world out of any industry. The company is a core component of Big Oil and has been a leading competitor in the global petroleum industry since its formation in 1907. Shell was formed through the merger of Royal Dutch Petroleum Company of the Netherlands and The "Shell" Transport and Trading Company of the United Kingdom. The company rapidly became the leading competitor of Standard Oil and by 1920, Shell was the largest producer of oil in the world. Shell entered the chemicals industry in 1929 and was one of the "Seven Sisters" which dominated the global petroleum industry from the mid-1940s to the mid-1970s. In 1964, Shell was a partner in the world's first commercial sea transportation of liquefied natural gas (LNG). In 1970, Shell acquired the mining company Billiton, which it subsequently sold in 1994 and now forms part of BHP. In recent decades, gas has become an increasingly important part of Shell's business, and the company acquired BG Group in 2016. Shell is vertically integrated and is active in every area of the oil and gas industry, including exploration, production, refining, transport, distribution and marketing, petrochemicals, power generation, and trading. The company has operations in over 99 countries, produces around 3.7 million barrels of oil equivalent per day, and has around 44,000 service stations worldwide.

Bio Based Transformer Oil Market Industry Developments

October 2023: Shell Lubricants has announced the acquisition of UK-based MIDEL and MIVOLT, two lines of business currently owned by Manchester-based M&I Materials Ltd. This acquisition is expected to strengthen Shell Lubricants' product portfolio for the power and renewables sectors.

February 2023: Cargill has launched FR3r natural ester, a new transformer insulating fluid derived from more than 95% rapeseed oil. This product is designed to meet the needs of utilities, transformer manufacturers, and commercial building owners who are seeking a higher performing, more reliable, and more sustainable insulating fluid than mineral oil. FR3r natural ester is a 100% biodegradable natural ester made from the renewable rapeseed plant.

Key Companies in the Bio Based Transformer Oil Market include.

• Shell


• Cargill, Incorporated


• Nynas AB


• Renewable Lubricants Inc.


• Apar Industries Limited


• S.P. Specialties Public Company Limited


• Gandhar Oil Refinery (India) Limited.


• Savita Oil Technologies Limited


• Ergon, Inc.


• Raj Petro Specialities Pvt. Ltd.

Bio Based Transformer Oil Market Segmentation

Bio Based Transformer Oil Market Type Outlook

• Natural Esters


• Synthetic Esters

Bio Based Transformer Oil Market Packaging Type Outlook

• Bulk Packaging


• Drums and Containers


• Cans and Bottles

Bio Based Transformer Oil Market Distribution Channel Outlook

• Direct Sales


• Indirect Sales

Bio Based Transformer Oil Market Application Outlook

• Distribution Transformers


• Power Transformers


• Instrument Transformers

Bio Based Transformer Oil Market End-User Outlook

• Utilities


• Commercial


• Industrial

Bio Based Transformer Oil Market Energy Generation Outlook

• Conventional Energy


• Non-Conventional (Renewable) Energy
  
  
  
  • Solar Energy
  
  
  • Offshore Wind Energy
  
  
  • Others
  
  
  
  

Bio Based Transformer Oil Market Regional Outlook

• North America
  
  
  
  • US
  
  
  • Canada
  
  
  
  


• Europe
  
  
  
  • Germany
  
  
  • UK
  
  
  • France
  
  
  • Russia
  
  
  • Italy
  
  
  • Spain
  
  
  • Rest of Europe
  
  
  
  


• Asia-Pacific
  
  
  
  • China
  
  
  • India
  
  
  • Japan
  
  
  • South Korea
  
  
  • Rest of Asia-Pacific
  
  
  
  


• South America
  
  
  
  • Brazil
  
  
  • Mexico
  
  
  • Argentina
  
  
  • Rest of Latin America
  
  
  
  


• Middle East & Africa
  
  
  
  • GCC Countries
  
  
  • South Africa
  
  
  • Rest of Middle East & Africa