The promise of biofuels will take longer to
materialise than many expected just a year or so
ago. The excitement provoked, centred mainly
around the promise of energy security and freedom
from imported oil, particularly in the US, has been
tempered by the multitude of challenges that have
arisen, ranging from the food vs fuel debate, the
global economic slump, the lack of cheap feedstock,
the impact of oil price volatility and, finally,
overcapacity. However, despite these problems,
combined bioethanol and biodiesel sales are still
expected to grow from $76bn in 2010 to $247bn
by 2020, reaching $280bn by 2022, according to a
recent study by US consultancy Pike Research.
‘In the near term, the biofuels market looks
like a train wreck,’ says Pike managing director
Clint Wheelock. ‘The economics of bioethanol and
biodiesel are not yet competitive with petro fuels,
and governments have pulled back some of their
support. However, in the 10-15 year timeframe, the
outlook remains very positive… and economies of
scale will dramatically improve the economics of
biofuels vs petroleum.’
Pike is forecasting compound annual growth
rates of 9% and 15% for bioethanol and biodiesel,
respectively, over the period 2009 to 2022, with
bio-jet fuel growing in prominence (see Box).
Biotechnology and genetically modified
organisms are also becoming increasingly important
as a means to reduce feedstock costs. ‘The effect of
microbiological technology advances in a myriad
of feedstock growth and biorefinery processes
cannot be overstated,’ the study states. ‘Yield
growth rates of traditional starch- and grain-based
biofuel feedstocks, combined with reduced fertiliser
requirements, will likely make first-generation
feedstocks more abundant and attractive within
five years, leading to feedstock gluts and lower
prices.’
Second-generation cellulosic and thirdgeneration
bioethanol are forecast to see
commercial-scale demonstrations by 2011 and
2012, respectively, but Pike believes efficiency
improvements will continue well beyond those
dates.
The study suggests there will be three waves of
next generation biodiesel products, beginning with
fuels based on waste greases, which are expected
to come onto the market in 2010. The next wave
will feature fuels based on jatropha oil, which Pike
believes will have a significant impact on the market
in 2014. The final wave will be algal biodiesel,
which is forecast to reach commercial availability in
2012, but will not have a major impact until 2016.
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