The single cell oil market is estimated to be valued at USD 121.1 Bn in 2024 and is expected to reach USD 607.1 Bn by 2031. It is projected to grow at a compound annual growth rate (CAGR) of 25.9% from 2024 to 2031. The single cell oil market is driven by the health benefits of single cell oils which is rich in proteins, vitamins and omega fatty acids. It is widely used in food & beverages and personal care industries due to its neutral taste and odor.

Market Driver - Rising Demand for Biofuels as a Sustainable Energy Source

As climate change concerns are rising globally, the need to switch to more sustainable sources of energy has become imperative. Governments and industries across the world are under increasing pressure to reduce their reliance on fossil fuels and adopt eco-friendly alternatives. Single cell oils hold tremendous potential as sustainable feedstocks for next-generation biofuels. They also improve engine performance due to better lubricity and combustion efficiency.

Many governments have implemented biofuel blending mandates and set ambitious targets to enhance the share of renewable fuels in their transportation fuel mix. For instance, the US and Brazil have been steadily ramping up ethanol blending rates. Meanwhile, the European Commission has laid out a path for reducing greenhouse gas emissions from fuels and energy used in transport by 60% by 2030 and almost 100% by 2050.

Leveraging the natural capability of algal single cell oils to sequester carbon while producing bio-oils provides a low-carbon solution. This is expected to drive significant and sustained demand in the single cell oil market over the coming decade.

Market Driver - Increasing Replacement of Fish Oil due to Environmental Concerns

The rising global demand for fish and fishmeal has put unsustainable pressure on wild marine fisheries. Stocks of several commercially important fish species have already reached maximum sustainable yield levels leading to greater risks of overfishing. Additionally, demand for aquafeed to meet the burgeoning requirement of farmed seafood is hard to fulfil using finite fish oil and fishmeal resources.

Single cell oils are emerging as the ideal eco-friendly and reliable alternative to fish oil in aquafeeds. They offer an attractive proposition to aquaculture farmers and fishmeal producers looking to diversify their portfolio and ensure continuity of supplies. Yeast- and algae-derived single cell oils closely resemble fish oil nutritionally, providing the Omega-3 fatty acids important for farmed fish health and fillet quality.

At the same time, being vegetable-based, they do not compromise the sustainability aspirations of environmentally conscious consumers. Successful pilot trials have demonstrated that partial or complete replacement of fish oil with microbial single cell oils is feasible. This can open new avenues of growth for the single cell oil market.

Market Challenge - Performance Issues like Injector Deposits with Low-quality Biodiesel Blends

One of the key challenges currently faced in the single cell oil market is performance issues that arise when low-quality biodiesel is blended with petroleum diesel. Many countries have mandated biodiesel blending targets to reduce carbon emissions from the transportation sector.

However, low-quality biodiesel made from low-cost feedstocks like waste cooking oil can lead to injector deposits and engine durability problems when directly blended at high percentages like B20 (20% biodiesel, 80% petroleum diesel). The deposits affect fuel injection, and over time can reduce engine performance, increase emissions, and fuel consumption.

Considerable research and investment is still needed to develop feedstock and conversion technologies that can produce single cell oil-based biodiesel meeting the strict quality specifications required for high blend levels. Until that happens, performance issues will remain a challenge restricting the growth of the single cell oil market.

Market Opportunity - Growing Investments in Biotechnology for Pharmaceutical Advancements

The single cell oil market is presented with promising opportunities arising from growing investments in the field of biotechnology and pharmaceutical advancements. Advancements in areas such as synthetic biology and genetic engineering have enabled the precision modification of oleaginous yeast strains to produce tailored lipids and omega fatty acids with desired pharmaceutical properties.

Many drug makers are actively researching the application of these designer lipids and fatty acids in novel drug delivery systems, immunotherapy agents, and nutraceuticals. The production of these molecules relies on fermentation and downstream processing technologies common to the single cell oil market.

Growing research collaborations between the life sciences and single cell oil producers are helping to apply industrial scale production capabilities to these niche therapeutic applications. Increased focus on preventive healthcare and patient-centric treatment is also driving demand. This presents opportunities for single cell oil producers to leverage existing infrastructure and partnerships to play a role in these high-value segments.

Focus on R&D and Product Innovation: Leading players in the single cell oil market such as Unilever, DSM and EFA Inc have heavily invested in R&D to develop innovative single cell oil products. For example, DSM launched a new line of single cell oils in 2020 derived from oleaginous yeast that are rich in omega-3 fatty acids.

Strategic Acquisitions: Players have made strategic acquisitions to expand their product portfolio and production capabilities. For example, in 2018, Cargill acquired Indonesian company Sinergia to strengthen its position in Asia Pacific region.

Focus on Emerging Markets: Players are focusing on high growth emerging markets like Asia Pacific and Latin America to drive future sales. For instance, Unilever in 2019 set up a new production facility in Indonesia, one of the top palm oil producers globally.

Partnerships and Collaborations: Companies partner with other industries, universities and start-ups to co-develop innovative products as well as applications for single cell oils.

Insights, By Type: Algal Biofuels Leading the Green Revolution

In terms of type, algae-based oils contributes 40.5% share of the single cell oil market owning to its numerous advantages over other conventional fuels and feedstock. Algae is highly sustainable and renewable in nature, and can grow rapidly without disrupting food security or requiring vast acres of arable land. It can be cultivated using non-potable water sources such as seawater or wastewater, thus avoiding the ‘food vs fuel’ debate.

Additionally, algae production yields are substantially higher than traditional crops, with some studies finding a real yields upwards of 100 times greater than the best producing terrestrial oil crops. From a feedstock perspective, algae are extremely versatile and can be engineered to adapt to various environments and produce tailored oils.

The flexibility of algae has also attracted interest from multiple end-use applications beyond fuels. Overall, algae’s sustainability credentials and agricultural advantages make it an attractive green alternative compared to land-intensive crops, contributing to its paramount share of the single cell oil market.

Insights, By Application: Biofuels Dominate on Sustainability Preference

In terms of application, bio-fuel feedstock contributes 35.7% share of the single cell oil market owning to the growing global emphasis on renewable and carbon-neutral fuels. Transportation emissions continue to rise with daily dependence on fossil fuels. Biofuels provide a low-carbon substitute and are therefore highly conducive to nations' climate commitments under the Paris Agreement.

Furthermore, single cell oils employed as biofuel feedstock demonstrate far greater sustainability credentials than traditional oilseed crops. As established earlier, algal biofuels can be produced with negligible impacts on food security, water resources or biodiversity. This elevated sustainability performance has amplified preference for bio-based fuels, maintaining biofuel's supremacy as the dominant application segment.

Insights, By End-use Industry: Food Sector Leads Nutritional Revolution

In terms of end-use industry, food & beverages contributes the highest share of the single cell oil market owning to elevating global nutrition consciousness. Consumption patterns are pivoting towards natural, plant-based sources of omega-3 fatty acids and proteins. Single cell oils especially algal and fungal oils provide powerful solutions as they can be rich vegetarian sources of DHA, EPA, and other micro-nutrients.

Simultaneously, the expanding populace and rising incomes in developing regions have heightened worldwide food demand. Sustainable, land-efficient means of food production such as single cell agriculture are subsequently becoming essential. Their assimilation into regular diets can help bridge nutritional divides.

Overall, the progressive uptrend of preventive healthcare and global nutrition security makes food and beverages the pivotal industry leveraging single cell technologies for superior wellness outcomes. This drives its paramount market share over other end-use domains.

• The aquaculture industry is increasingly adopting single-cell oils as a sustainable feed ingredient, reducing dependence on traditional fish oils and contributing to environmental conservation.
• Biotechnology firms are collaborating to enhance fermentation technologies for more efficient single-cell oil production, aiming to lower costs and increase scalability.
• The Asia-Pacific region is anticipated to experience significant growth in the single cell oil market due to a large population base and rising health awareness.
• Biofuels derived from single cell oils are gaining traction as renewable energy sources, aligning with global efforts to reduce carbon emissions.

The major players operating in the single cell oil market include DSM Nutritional Products, BASF SE, Lonza Group, Corbion NV, Cellana Inc., Royal DSM NV, Cargill Incorporated, Alltech Biotechnology Pvt. LTD, Goerlich Pharma GmbH, Xiamen Huison Biotech Co. Ltd., and DIC Corporation.

• In June 2021, Corbion NV expanded its production capacity for microalgae-based oils to meet the growing demand in the food and beverage sector. This strategic move aimed to strengthen the company's market position and accelerate growth in the sector.
• In January 2021, DSM Nutritional Products introduced a new algae-based omega-3 oil, providing a sustainable alternative to traditional fish oil. This innovation addresses the increasing consumer demand for plant-based nutritional supplements and aims to lessen dependence on marine resources.

• By Type
  • Algae-Based Oils
  • Fungal-Based Oils
  • Bacterial-Based Oils
  • Yeast-Based Oils
• By Application
  • Bio-Fuel Feedstock
  • Fish Oil Substitute
  • Functional Oils
  • Other Applications
• By End-use Industry
  • Food & Beverages
    • Dietary Supplements
    • Cooking Oils
  • Animal Feed
    • Aquaculture Feed
    • Livestock Feed
  • Pharmaceuticals
  • Biofuels
  • Cosmetics