The Biodiesel World News

Demand for biofuels will expand almost 20 percent per year through 2011 to 92 million metric tons, despite recent concerns about the impact of biofuels on the environment and world food supplies. Market expansion will be led by a more than doubling of the global market for bioethanol, with the biodiesel market achieving even more rapid growth. Other biofuels will also achieve double digit gains, though from a much smaller base.

The world market for biofuels has expanded rapidly in recent years as a combination of domestic politics, rising oil prices, increasing concerns about global warming, and potential economic opportunity have spurred a broad range of countries to pass laws that support biofuel industries. World bioethanol demand has benefitted from a powerful farm lobby in the United States that has succeeded in passing a renewable fuel mandate, as well as rising oil prices that have boosted bioethanol demand in Brazil. Growing concerns about global warming have helped stimulate both bioethanol and biodiesel demand in the European Union, while several countries in the Asia/Pacific region have institutedbiofuel programs as a means of boosting their local economies. Though protective sentiments will remain high, global trade in biofuels will continue to develop, as many countries in Western Europe, NorthAmerica and Asia/Pacific find that they cannot fully satisfy demand with domestic production. Despite, or perhaps even because of, the success of biofuels in recent years, questions have begun to arise about the wisdom of using biofuels as an alternative energy source going forward. While the impact of biofuels on world food supplies is expected to be a short term issue, the potential negative impact of biofuels on the environment could have longer term consequences. In spite of these concerns, though, countries’ overarching need for energy security and domestic economic development will continue to drive rapid increases in consumption, most notably in the large North American market.

World biofuel production will track increases in demand as most countries seek to foster domestic biofuel industries, both to reduce reliance upon imported oil, and to foster domestic economic development. This will continue to favor the development of cereal-based (maize and wheat) bioethanol capacity in North America and Western Europe, as well as sugarcane- ased bioethanol production in Latin America. Likewise, biodiesel production will center on soy oil in the Americas, rapeseed oil in Europe, and palm (and increasingly jatropha) in the Asia/Pacific. Next-generation cellulosic bioethanol and algal biodiesel technologies will become commercially signifi- cant in the longer term.