2. Whitepaper on Global Biofuel Market
Global Biofuel
Market Overview
Biofuels are transport fuels produced from
biomass.
This biomass is produced from feedstock
sources including food crops (sugars,
starches and oil crops), fast growing
energy crops (such as jatropha,
miscanthus and algae), crop residues and
waste products (such as used cooking oil
etc).
● Conventional or 'first generation' biofuels
refer to crop based ethanol and biodiesel.
● Second generation biofuels include ethanol
and biodiesel from non-food crops and waste.
● Third generation biofuels includes biofuels
produced from algae.
● Fourth generation biofuels includes those
with identical chemical structures to fossil
fuels and other products.
Advantages Disadvantages
Less Expensive
Wide Range of
Materials
Easily Renewable
Less Carbon
High Initial
Investment
Using Valuable Crop
land
Lower Output
Asia Pacific region
has shown the
fastest growth of
around 17.6% in the
biofuel production in
2012. In the Asia
pacific region, China
was the leader with
the production of
1729 Thousand
Tonnes of biofuel in
2012, followed by
Indonesia with 1212
Thousand Tonnes of
biofuel.
3. Whitepaper on Global Biofuel Market
Region 2011 2012 Growth (%)
Total America 45,718 44,996 (1.5%)
Total Europe & Eurasia 10,143 10,022 (1.1%)
Total Asia Pacific 4,397 5,174 17.60%
Total Africa 23 23 0
Total Middle East 4 4 0
Total World 60,285 60,219 (0.4%)
▪ Despite a recent decline, US still remained the
leader in the global biofuel market with a
production of 27360 Thousand Tonnes in
2012 , corresponding to a share of around
45.4%.
▪ In the Americas, US occupied a share of
around 61% in 2012, followed by Brazil with a
share of around 30%.
Source: F.O. Lichts; US Energy Information Administration
Source: F.O. Lichts; US Energy Information Administration
Figure 1: Share of Major Countries in Biofuel Production in Americas (%), 2012
Figure 2: Share of Major Countries in Biofuel Production in Europe (%), 2012
Source: F.O. Lichts; US Energy Information Administration
In Europe, Germany was the leading biofuel
producer in 2012 with a production of 2894
Thousand Tonnes of biofuel, corresponding to a
share of around 29%. France occupied the
second position with a share of around 18%,
with 1820 Thousand Tonnes of production.
Asia Pacific region has shown
the fastest growth of around
17.6% in the biofuel production
in 2012. In the Asia pacific
region, China was the leader
with the production of 1729
Thousand Tonnes of biofuel in
2012, followed by Indonesia with
1212 Thousand Tonnes of
biofuel.
However, global biofuels
production recorded the first
decline since 2000 (-0.4%), due to
a decline in the production in US
(-4.3%).
Table 1: World Biofuel Production by Region (Thousand Tonnes),
2011-2012
4. Whitepaper on Global Biofuel Market
Ethanol
Ethanol is an alcohol-based fuel made by fermenting and distilling starch crops, such as corn. It can also be made from "cellulosic
biomass" such as trees and grasses. The use of ethanol can reduce dependence upon oil and reduce greenhouse gas emissions.
Ethanol production was the highest in America in 2012. The majority of American consumers are using E10 ethanol blends (10%
ethanol). Moreover, the availability of E15 (15% ethanol) is also rapidly increasing, especially in the Midwest.
Table 2: World Ethanol Production by Region (Million Gallons), 2012
Region 2012
Americas 25,594
Asia Pacific 1,578
Europe 1,139
Rest of the World 42
Total 28,353
Source: RFA, F.O. Lichts
Across the world, ethanol
producers are providing
increasing amounts of livestock
feed products distillers grains,
corn gluten etc while
simultaneously providing
growing volumes of corn
distillers oil and other biobased
chemicals to replace oil.
Further, many countries have
also increased investment in
developing plants to increase
production of ethanol, for a
sustainable environment in the
future.
Biodiesel
Table 3: World Biodiesel Production by Markets (Million Gallons),
2012
Region 2012
Europe 3,191
US 968
Argentina 754
Brazil 736
Indonesia 192
Malaysia 15
Total 5,856
Source: Fapri.iastate.edu
Biodiesel production in Europe
has been driven largely by the
European Union’s (EU’s)
Renewable Energy Directive
(RED), which has set a target
for the EU to reach a 20%
share of energy from renewable
sources by 2020 and to achieve
up to a 10% share for biofuels
in its energy transport use.
According to BP’s Statistical
Review of World Energy 2012,
for every tonne of bioethanol
produced in Europe, three
tonnes of biodiesel were
produced, which illustrates how
important the biodiesel market
is in meeting the EU’s 2020
target.
Biodiesel is a form of diesel fuel manufactured from vegetable oils,
animal fats, or recycled greases. It is safe, biodegradable, and
produces less air pollutants than petroleum-based diesel. Biodiesel
can be used in its pure form (B100) or blended with petroleum
diesel. Common blends include B2 (2% biodiesel), B5, and B20.
Europe has been the leading producer of biodiesel in the world.
The top three biodiesel producing nations in Europe are Germany,
France and Spain. Europe's production of biodiesel was around
3191 Million Gallons in 2012, followed by that of America with
2468 Million Gallons. US was the leading biodiesel producer in
Americas in 2012 with 968 Million Gallons of production.
5. Whitepaper on Global Biofuel Market
The decline in global biofuel production in
2012 has been attributed the decline of
biofuel production in the US. The reasons
for decline in production in US are:
The drought in the Midwest is causing the
American biofuels industry to face decline
in production. Midwest corn yields have
driven the price so high that ethanol
plants are being forced to shut down.
Nearly 10% of the nation's ethanol plants
stopped production over the past year, as
the drought that pushed crop prices so
high that ethanol has become too
expensive to produce.
There has been falling demand for
gasoline as a result of both the recession,
and a renewed policy push for electric and
hybrid vehicles and tougher fuel economy
standards. Thousands of barrels of
ethanol is lying idle in storage because
there is not enough gasoline in the
market to blend it with and blends calling
for a higher percentage of ethanol have
yet not been developed in the market.
There has been an increasing focus on
other alternatives like hybrids and
electric vehicles by many countries.
Moreover, countries like US recorded the
world's highest growth in production of
both oil and natural gas in 2012, on the
back of increasing production of
unconventional hydrocarbons such as
tight oil. The rising natural gas output
has reduced the prices of natural gas in
the US, making it a feasible alternative.
Producing biofuels on a large scale
require huge tracts of land. Many
countries cannot afford to divert land
away from food production. Biomass
production for biofuels could displace
existing products from land currently
used for food, forage and fiber, which
could increase the price of these goods in
global markets. It could also induce
deforestation that would lead to global
climate change, due to which countries
are mitigating the production.
Few countries have comprehensive biofuel
policies, and where present, they are often
driven largely by agricultural
considerations and fail to address the
economic, social and environmental
implications of widespread production,
use and trade in biofuels. Climate-wise,
some of the biofuels [receiving EU
subsidies] are as bad as, or even worse
than the fossil fuels that they replace.
Thus, policies which were initially formed
to promote biofuels are now being
modified. Measures are now being
considered that would prevent EU and
countries like US from providing
incentives for the continued displacement
of food crops for fuel.
For biofuels production and development,
relevant information from the
transportation, forestry, energy,
agriculture, and environment sectors is
required. Most countries fail to develop
accurate ways to estimate and projected
biofuel demand in domestic and global
markets due to inefficiency in building a
resource database and developing the
capacity to manage such a database.
Many countries are facing financial
crunches in maintaining the production of
biofuels. For biofuels, technology
advancement and scale-up of biore?neries
are the most important factors in
reaching competitive costs. The cost of
biore?neries is the largest single cost in
the supply chain, along with the added
fuel delivery costs, which poses an
impairment for its growth in production.
6. Whitepaper on Global Biofuel Market
Novozymes, the Denmark-based company, launched
new enzymes that boost ethanol and oil production from corn
while saving biofuel plants energy and money. Novozymes' new
industrial enzymes boost the rate of starch into sugar
conversion. The company's new Avantec and Spirizyme products
transform roughly 5% more of the starch trapped in kernels into
sugar than traditional processes. Moreover, another enzyme,
Olexa, extracts up to 13% more oil out of the corn germ.
Algae.Tec has signed a deal with Australia's largest
power company to site an algae carbon capture and biofuels
production facility beside a big coal-fired power station near
Sydney. This deal is an innovative means of capturing and
reusing carbon emissions and providing the region with a locally
produced green fuel source.
The world's first commercial volume of cellulosic
diesel fuel has been developed in US. Known as "Drop-In
Biofuels" these fuels are similar to their petroleum-based
counterparts and can be pumped through the same pipelines
and be used to power the engines of cars and trucks without any
modifications. Drop-in biofuels could also free modern
civilization from its dependence upon petroleum, without
requiring extensive rebuilding of the fuel-supplying
infrastructure or the junking of vast numbers of existing
vehicles.
IndianOil has successfully developed and
commercialised a technology to co-process non-edible vegetable
oil in the existing Diesel Hydrotreating (DHDT) units of a
petroleum Refinery to make biodiesel. This is first time in India
and possibly the first in the world when Jatropha oil has been
used for co-processing in a petroleum refinery.
In Japan, a project has started at a sewage treatment
facility to extract a biofuel ingredient from wastewater using
algae. This first of its kind project in Japan is part of
reconstruction efforts jointly promoted by Tohoku University,
the University of Tsukuba, and the municipal government of
Sendai. The algae conducive to producing a biofuel component
being used in the trials to produce the hydrocarbon is
Aurantiochytrium.
▪ Ceramatec will utilize an
efficient electrochemical deoxygenation process to develop cost-
effective technology to separate oxygen from bio-oil. This project
will help produce hydrocarbon products suitable for further
processing in conventional petroleum refineries.
▪ Oak
Ridge National Laboratory will use a microbial electrolysis
process to efficiently remove the hydrogen from the water found
in bio-oil. This technology will help reduce the corrosivity of
bio-oil and improve the efficiency of converting hydrogen and
biomass to biofuels.
▪ The University
of Oklahoma will investigate two methods- thermal
fractionation and supercritical solvent extraction to maximize
the amount of renewable carbon and hydrogen that can be
extracted from biomass and converted to a refinery-compatible
intermediate and suitable for final upgrading to a transportation
fuel.
▪ Virent will develop an
innovative separation process which uses its BioForming
technology to efficiently convert carbon from lignocellulosic
biomass into hydrocarbon fuels. Virent will work to improve the
overall carbon conversion efficiency of biomass, helping to
reduce the cost of producing hydrocarbon biofuels that work
with the existing transportation fuel infrastructure and are
capable of meeting the Renewable Fuel Standard.
7. Whitepaper on Global Biofuel Market
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8. Whitepaper on Global Biofuel Market
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