3.2 billion gallons of next-gen biofuels by 2015
Lux Research’s new report, “Nations Race to Build Alternative Fuel Capacity,” states that “alternative fuels comprise 4.3 percent of petroleum capacity today, and countries such as Thailand, Australia, and Sweden represent the best growth opportunities.”
Current production capacity for alternative fuels such as ethanol, biodiesel and renewable diesel is at 44.6 billion gallons a year, Lux says, “but systemic hurdles will constrain growth to less than 5 percent annually through 2015.” It notes, however, that “pockets of promising growth still exist as variations in local policy, demand, and feedstock availability mean that new nations will arise as global hotspots in the constrained industry.”
Lux says the best opportunities for ethanol growth are in Brazil, Australia, China, Sweden and Thailand, and ethanol capacity will grow to 35.1 billion gallons a year in 2015. “Biodiesel capacity growth follows close behind, reaching 15.8 billion gallons that same year, as France, Canada, Thailand and Germany emerge as the best nations for biodiesel capacity opportunities.”
All other alternative fuels—the next-generation renewables such as biobutanol, renewable gasoline, biojet and biocrude—will reach just 3.2 billion gallons total in 2015, the report states.
“The market is shifting to second-generation fuels like renewable diesel and cellulosic ethanol,” said Andrew Soare, Lux Research Analyst and lead author of the report. “These fuels bypass the major logistical hurdles of first-gen alternative fuels, and investors, as well as governments, are realigning investment to grow capacity.”
It also states that, “As concerns about food security grow, the alternative fuels industry begins a long march to utilize wastes. For example, the ethanol industry will seek to tap cellulosic feedstocks, especially in countries such as Sweden and Australia with ample agricultural and forestry wastes. The biodiesel industry will eye waste oils such as used cooking oil or brown grease in municipal wastewater.”
The research firm also projects that ethanol growth is likely to be capped. “Beyond 2015, growing populations and food security threats will constrain the growth of ethanol and biodiesel, which today account for 97 percent of all biofuels. Along with downstream compatibility issues, these factors mean ethanol’s growth will be limited; it will cede ground to drop-in renewable gasoline and renewable diesel.”