According to a new report published by Pike Research, major oil companies such as Shell and BP are likely to emerge as important players in the global biofuels market, where more than 31 countries have long-term biofuel mandates.
‘While Pike Research does not perceive any of the oil majors to be outright industry leaders at this stage, several companies have demonstrated a solid foundation for growth and long-term success,’ says Mackinnon Lawrence, a senior analyst at Pike Research. ‘Shell and BP both have advantageous near-term positions for ethanol production from sugarcane and strong commitments to commercializing advanced biofuel pathways.’
Both Shell and BP are pursuing strategies based on rapid scale-up in Brazil, whose efficient sugarcane market represents one of the most attractive biofuels markets over the next decade, with potential to supply sugar for advanced conversion technologies producing ‘drop-in’ fuels as well.Â
For instance, Shell is a participant in a $12 billion venture with Cosan, one of the world's leading producers of ethanol from sugarcane. BP has made multiple investments across a number of potentially breakthrough feedstocks, participates actively in R&D efforts and has built a strong portfolio of early-stage investments.
Third-ranked Total has charted out a similar strategy to Shell and BP, but its commitment to building out a delivery supply chain for biofuels, especially in Brazil, has been more conservative to date.