Biofuels market to ‘double’ in a decade

The market for biofuels will increase by more than two fold by the year 2021 with a rise in production and consumption in the transport sector being the biggest drivers, according to a new report.

The cleantech research firm estimates that the global market for biofuels will increase from $82.7 billion (€59.7 billion) in 2011 to $185.3 billion in just ten years.

The report, written by Pike Research, says ‘feedstock versatility, product neutrality, and sustainability underpinned by the emergence of advanced conversion pathways and feedstocks’ will spur on the growth.

Because certain countries, such as emerging markets, will be growing feedstocks at faster rates than others, the report also suggests there will be a rise in global trade in biofuels, with Brazil becoming one of the main suppliers.

‘The widespread scale-up of biofuels could radically alter the industrial and geopolitical landscapes,’ says senior analyst Mackinnon Lawrence, ‘by meeting an expanding portion of consumer demand in ground, aviation, and maritime fuel markets. But with conventional biofuels constrained by social and environmental concerns, and price parity and access to financing a persistent obstacle to advanced biofuels scale-up, a number of difficult challenges must be overcome if the industry is to keep pace with emerging mandates.’

Whilst many consumers currently see biofuels as just an alternative to conventional fuel there is increasing demand for biofuels in ground, aviation and maritime transportation fuel markets which could change consumers attitudes towards viewing renewable fuel as a more long-term solution.

The rise in research into non-food feedstocks for biofuels production would also give production a higher potential.

However, because inexpensive feedstocks are still hard to find and many production companies are struggling to raise financing, technological development could struggle to come into operation. Financing could cause a shakeup in the market as larger corporations, such as oil majors, dominate.

The report says: ‘Although the shift towards high-value, low-volume markets as a source of revenue will help advanced fuel ventures finance scale-up efforts, it is unclear whether this trend will accelerate biofuels production by bringing more capacity online or divert production away from biofuels as companies back into lower value, high-volume fuel markets over the next decade.’