According to a recent report from Pike Research, the widespread commercialization of biofuels will be largely dependent upon whether this marketplace can achieve price parity with petroleum-based fuels during the next decade – and doing so could be challenging.
Long-term, biofuels could meet expanding demand for fuels from ground, aviation, and maritime transportation fuel markets. However, a lack of access to inexpensive feedstocks and various financing hurdles currently present obstacles for biofuels production, Pike Research says.
‘Although many feedstocks, technologies and conversion pathways currently share the same tent, the coming decade promises to be one of shakeouts,’ says senior analyst Mackinnon Lawrence.
‘Early bets on cellulosic pathways have yet to deliver significant volumes, opening up opportunities for a number of advanced pathways,’ Lawrence adds. ‘Meanwhile, it remains unclear whether the shift toward high-value, low-volume bio-chemical and product markets as a source of near-term revenue will accelerate or impede biofuels-production scale-up efforts.’
The company says first-generation biofuels derived from corn starch, sugarcane, rapeseed and soy are projected to underpin growth over the next decade, while the emergence of advanced conversion pathways and non-food feedstocks will unlock considerable production potential throughout the world.
Pike Research's analysis finds that the global market for biofuels will more than double over the coming decade, increasing from $82.7 billion in 2011 to $185.3 billion by 2021. Although growth is expected to climb steadily through 2016, more robust growth is expected between 2017 and 2021, as a combination of higher oil prices, emerging mandate obligations, availability of new feedstocks, and the scaling up of advanced technologies drive increased investment in the industry.
Ethanol production is expected to maintain its dominance, reaching 49.5 billion gallons per year by 2021, as compared to biodiesel's 16.2 billion gallons per year, the firm adds.