Demand for Biofuels in Transportation to Increase 60 Percent in Eight Years

According to a new report from Navigant Research, global demand for biofuels for over-the-road transportation will grow from 32.4 billion gallons in 2013 to 51.1 billion gallons by 2022.

In the last 10 years, an increase in ethanol production capacity in the U.S. and Brazil, and biodiesel in Europe, has resulted in biofuels gaining a foothold in the global market for liquid fuels, the company says. The global biofuels industry will soon enter a new phase of development focused on advanced and drop-in biofuels, driven by the aviation industry and the U.S. Department of Defense. Growth in the use and production of biofuels for these end users are driving down costs, which will enable commercial-scale drop-in biofuels production and a greater uptake of biofuels in other sectors, such as OTR transportation.

Petroleum consumption by the OTR transportation sector in the U.S. is expected to peak in 2016, according to the report, as biofuels – including ethanol, biodiesel and drop-in biofuel alternatives to diesel and gasoline – grows to account for 8.7% of demand.

‘Developed nations in Europe and North America are beginning to see declines in liquid fuels consumption from the road transportation sector, due to increased vehicle fuel efficiency and growing interest in alternative fuel vehicles,’ says Scott Shepard, research analyst with Navigant Research.

‘The continued growth of conventional biofuels relies either on policies increasing biofuel blend requirements, or on growing vehicle markets in the Asia Pacific region,’ he adds. ‘Meanwhile, advances in biofuels derived from non-food feedstocks, and biofuels that require no changes to infrastructure or vehicles, promise to significantly alter the petroleum industry landscape.’

Overall, the potential markets for biofuels are huge, with Navigant Research estimating that global retail sales of liquid fuels for the OTR transportation sector will grow from more than $2.6 trillion in 2013 to more than $4.5 trillion in 2022.

More information about the report, ‘Biofuels for Transportation Markets,’ can be found here.

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