Next Generation Biofuels: Market Drivers, Growth Opportunities and Regulatory Change

NEW YORK, Nov. 4, 2010 /PRNewswire/ -- Reportlinker.com announces that a new market research report is available in its catalogue:

Next Generation Biofuels: Market drivers, growth opportunities and regulatory change

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Over 80% of the world's primary energy supply is currently derived from coal, gas and oil (collectively known as 'fossil fuels'), which are used to generate electricity, power, energy and heat for industrial, commercial, domestic and transportation purposes. The world's dependence on crude oil for transportation is particularly marked, with the International Energy Agency (IEA) estimating that fuels from crude oil currently supply about 96% of the worldwide energy demand for transport purposes.

As the world's population grows and developing countries look to expand their economies, this insatiable demand for fossil fuels is unlikely to show any sign of easing, with oil and gas accounting for 60% of the world's increasing energy demand between now and 2030. Furthermore, with most significant reserves of fossil fuels unevenly distributed throughout the world, energy security is set to become an increasingly critical economic and political issue over the coming decades. Real or perceived disruptions to the global supply of fossil fuels – notably crude oil – are likely to grow in frequency and cause wild fluctuations in the price of energy, as they have done so in the past.

However, one of the most pressing reasons for seeking alternative sources of energy and fuel lies in the form of climate change. The combustion of fossil fuels releases carbon dioxide (CO2), a potent 'greenhouse gas' (GHG), which are considered to be responsible for 'global warming'. According to the IEA, if no changes are made to the world's existing energy economy, related emissions of CO2 will grow marginally faster than energy use, meaning that by 2030 global CO2 emissions will be more than 50% higher than today. Over two-thirds of that projected increase in emissions is expected to come from emerging economies, such as India, China – both of which are set to rely heavily on coal-based power stations to drive their rapidly developing economies.

Key features of this report

• Analysis of biofuels by type, resources available, production volumes, production technology capacity installed.

• Market projections to 2020, including an evaluation of energy type and national and international growth potential.

• Overview of trends impacting on and shaping innovation in the energy market.

• New renewable energy technology analysis including innovation, capacity and biofuels investment.

Scope of this report

• Achieve a quick and comprehensive understanding of how global market trends and legislation are influencing the development of the biofuels industry.

• Realize up to date competitive intelligence through a comprehensive review of global markets in the biofuels energy industry between 1990 and 2008.

• Assess the emerging trends in the biofuels industry – Biomethanol, Hydro Thermal Upgrading (HTU) diesel, Fischer-Tropsch (FT) diesel, Lignocellulosic ethanol, Algae fuel, Photo-bioreactors carbon emission absorption.

Key Market Issues

• Environmental regulations: Environmental targets set to control Carbon dioxide emissions globally are creating a path for lower carbon emission fuel technologies.

• Energy security:- Oil pricing structures are volatile and uncontrollable, due to the majority imported from non-domestic countries. This volatility is likely to increase as reserves of the natural resources decline.

• Resource allocation: Some of the currently available biofuels have a number of disadvantages that are related to their feedstock. The current costs of rapeseed biodiesel and ethanol from cereals or beets are much higher than the costs of petrol or diesel, with substantial subsidies required to make them competitive. Second generation biofuels have been developed due to limitations of first generation biofuels, primarily that the resources used threatens food supplies.

Key findings from this report

• Worldwide production of biodiesel reached 11,016m liters per annum, with the EU representing 72% of that global biodiesel production and consumption.

• Germany, France, Italy, the UK and Austria were the largest biofuels consumers in the EU in 2008. The USDA forecasts that biofuels consumption in the EU will continue to grow throughout 2009, despite the economic downturn. The increase is a result of mandates and tax incentives.

• There are currently 192 bioethanol production plants in the US, which together have a production capacity of 36,300m liters per year.

• The US accounted for 24% of the global biodiesel market in 2008 – accounting for 2,650m liters per annum.

• It is also notable that Brazil is by far the world's largest exporter of ethanol at 3.5bn liters (from production of 19bn liters). Production is estimated by the IEA to increase to over 4bn liters in 2009. Most exports go to the US, Europe, Korea and Japan.

Key questions answered

• What are the drivers shaping and influencing development in the biofuel industry?

• How will biofuels production share perform to 2020? What are the opportunities?

• What are the forecast market growth rates 2008-2030? Which markets will see the highest value growth and which the highest volume growth?

• Which regions and countries offer the greatest opportunity for growth?

Companies mentioned

Table of Contents

Next Generation Biofuels

Executive summary 14

What are biofuels? 14

Next generation biofuels 15

Industry forecasts for biofuels 16

Biofuels drivers and inhibitors 17

The biofuels economy 18

Biofuels market size and forecasts 19

Biofuels policies and regulations 20

Chapter 1 Introduction 22

Audience 22

How to read this report 22

Chapter 2 What are biofuels? 26

Summary 26

World energy demand 27

Climate change 27

Renewable energy 28

Biomass 30

What is biomass? 30

Population, energy consumption and biomass 31

Regional resources 32

What are biofuels? 39

Solid biofuels 40

Liquid biofuels 40

Gas biofuels 41

Biofuels in current use 41

Ethanol 41

Distribution, storage and blending 42

End-use 42

Biodiesel 42

Distribution, storage, blending 43

End-use 43

Chapter 3 Next generation – advanced biofuels 46

Summary 46

Introduction 47

Second generation biofuels 49

Second generation biofuels under development 51

Biohydrogen 51

BioDME 51

Biomethanol 51

Butonal and Isobutanol 52

Dimethylfuran (DMF) 52

Hydro Thermal Upgrading (HTU) diesel 52

Fischer-Tropsch fuels 52

Bioconversion of biomass to mixed alcohol fuels 53

Wood diesel 53

Key players in second generation biofuels 53

Market possibilities for second generation biofuels 54

Third generation biofuel 55

Algae fuel 55

Background 55

Limitations of previous biofuels 56

Algae types 56

Algae cultivation 57

Photo-bioreactors 57

Closed loop systems 57

Open pond systems 58

Algae fuel potential 58

Development timeline 60

Aircraft biofuels testing 61

Key players for third generation biofuel 64

Market possibilities for algae biofuel 65

Chapter 4 Forecasts for biofuels 68

Summary 68

Introduction 69

Economic competitiveness of biofuels and biomass 69

Biofuels technology development 72

Biofuels drivers and inhibitors 73

Chapter conclusion 76

Chapter 5 Biofuels drivers and inhibitors 80

Summary 80

Market background 81

Drivers of the biofuels market 85

Greenhouse gases and environmental concerns 85

Regulatory incentives/pressure 86

Concern about energy security 88

Rising cost of existing fuel supplies 88

Consumer pressure 90

Inhibitors of the biofuels market 91

The biofuels economy 92

Sustainability concerns and the rising price of food crops 92

Limited biofuels infrastructure 93

Biomass and land availability 94

Chapter 6 The biofuels economy 98

Summary 98

Introduction 99

American market 99

American Recovery and Reinvestment Act of 2009 100

Biofuels new direction away from corn-based ethanol 101

The biofuels economy 102

Production costs 102

Cost of distribution 103

Cost at filling station 105

Third generation algae fuel costs 108

Algae fuel leading players costs comparison 110

Transport fuel blends 113

Car costs and fuel efficiency 114

Chapter conclusion 116

Chapter 7 Biofuels market size and forecasts 120

Summary 120

Worldwide energy demand 121

Biofuels market sizing 124

Worldwide 124

Ethanol 124

Biodiesel 127

Europe 130

Ethanol 130

Biodiesel 134

US 141

Ethanol 141

Biodiesel 145

Brazil 147

Ethanol 147

Biodiesel 150

India 153

India's fuel economy 153

Ethanol 153

Biodiesel 155

China 157

China's fuel economy 157

Ethanol 157

Biodiesel 158

China working with the US for biofuels development 159

Chapter 8 Biofuels policies and regulations 162

Summary 162

Introduction 164

Policy frameworks 165

Renewable energy targets 166

Kyoto Protocol 166

European Union 166

US 169

Renewable Fuel Standard (RFS) 169

Renewable Portfolio Standards (RPS) 170

Developing nations 171

Biofuels targets 172

Biofuels policy overview by region 173

The European Union 173

Biofuels Directive 173

Directive 2003/96/EC 174

Incentives for biofuels 174

Tax incentives 175

The United States 177

US Energy Policy Act 2005 177

Brazil 178

Proalcool Program 178

India 179

Biodiesel policy 179

Bioethanol policy 180

China 181

National Biomass Ethanol Gasoline Project 181

The Renewable Energy Law of the People's Republic of China 181

Chapter conclusion 182

Report conclusion 183

Abbreviations 186

Energy content and conversion rates 187

Index 189

List of Figures

Figure 2.1: World renewable energy, 2008 30

Figure 2.2: Current and predicted EU biomass resources (Mtoe/y) 33

Figure 2.3: Current and potential US biomass resources (Million dry tonnes/y), 2005 34

Figure 2.4: Potential power generation from biomass among ASEAN countries (MW) 36

Figure 2.5: Breakdown of currently available biomass in China by type 37

Figure 2.6: Maximum regional bioenergy production potential, 2050 38

Figure 2.7: Typical oil extraction from 100kg of oil seeds (kg) 44

Figure 3.8: Global biosphere, 1998 60

Figure 3.9: Biofuels time period to availability (years), 2009 61

Figure 3.10: Cushing, OK WTI Oil Spot Price FOB prices (Dollars per Barrel), 1986-2009 66

Figure 4.11: Relative competitiveness of alternative energies in five years, 2009 69

Figure 4.12: Relative economic competitiveness of biofuels now and in the next five years, 2009 70

Figure 4.13: What proportion of global fuel production will biofuels account for by 2020? 71

Figure 4.14: Within how long will biofuels account for the primary source of global fuel production? 72

Figure 4.15: Which regions will lead the development of biofuels over the next five years? 73

Figure 4.16: How important will the following factors be in driving the biofuels market over the next five years? 74

Figure 4.17: How important will the following factors be in inhibiting the biofuels market over the next five years? 75

Figure 4.18: Biofuels impact on global food crop prices, 2009 76

Figure 5.19: Projected world energy demand to 2030 (Mtoe) 82

Figure 5.20: Growth in energy demand by region (2000-2030) 83

Figure 5.21: Projected worldwide oil consumption (million barrels per day), 2005-2025 84

Figure 5.22: Average annual oil price (US$ per barrel), 2008 89

Figure 5.23: Opting for green energy is one behavioural aspect of rising environmental attitudes 90

Figure 5.24: The potential biomass availability of EU15, AC10 and/or Europe according to five studies (left part of the figure) 94

Figure 6.25: Cost of distribution and dispensation of various fuels from a central production facility to a filling station (Euro/GJ) 105

Figure 6.26: Costs of various biofuels at the filling station using existing technology (2004) 106

Figure 6.27: An algae production process, 2009 109

Figure 6.28: Algal fuel capacity projections 2009-2014, 2009 112

Figure 6.29: Gasoline ethanol (kpa/%v/v), 2008 114

Figure 6.30: Car costs (Euro) and fuel efficiencies (km/GJ of fuel) of passenger cars by fuel and engine system 115

Figure 7.31: Worldwide biofuels fuel production volume (billion liters), 2008 123

Figure 7.32: Global bioethanol production growth (thousand tons of oil equivalent), 1998-2008 126

Figure 7.33: Top bioethanol producing countries (thousand tons of oil equivalent), 2008 127

Figure 7.34: Biodiesel (million L/a), 2009 129

Figure 7.35: Bioethanol in Europe (million L/a), 2008 131

Figure 7.36: Biodiesel production in Europe (million liters/annum), 2009 136

Figure 7.37: EU market share of biodiesel production in 2008 (%), 2009 138

Figure 7.38: Projected US ethanol production (billions of gallons), 2006-2012 142

Figure 7.39: US ethanol market revenue forecast ($bn), 2006-2012 143

Figure 7.40: US bioethanol development (million L/a), 2009 144

Figure 7.41: US biodiesel (million L/a), 2009 147

Figure 7.42: Brazil biofuels development (million L/a), 2009 150

Figure 8.43: Renewable fuels targets in the US (billions of gallons per year), 2006-2012 170

Figure 8.44: EU biofuels targets, 2008 174

List of Tables

Table 2.1: World renewable energy, 2008 29

Table 2.2: Population, energy consumption and biomass contribution in selected regions, 2005 31

Table 2.3: Current and predicted EU biomass resources (Mtoe/y) 32

Table 2.4: Current and potential US biomass resources (Million dry tons/y), 2005 34

Table 2.5: Potential power generation from biomass among ASEAN countries (MW) 35

Table 2.6: Breakdown of currently available biomass in China by type 37

Table 2.7: Maximum regional bioenergy production potential, 2050 38

Table 2.8: Typical oil extraction from 100kg of oil seeds (kg) 44

Table 3.9: Comparison of first and second generation biofuels 48

Table 3.10: Biofuels comparison (Liters of oil yields (hectares/year)), to 2009 59

Table 3.11: Viable Bio-SPK feedstock alternatives, 2009 61

Table 3.12: Fuel property comparisons: Neat, 2009 63

Table 3.13: Fuel property comparisons: Blends, 2009 64

Table 5.14: Projected world energy demand to 2030 81

Table 5.15: Growth in energy demand by region (2000-2030) 82

Table 5.16: Projected worldwide oil consumption (million barrels per day), 2005-2025 84

Table 5.17: CO2 equivalent emissions savings from biofuels (g/km), 2006 85

Table 5.18: Average annual oil price (US$ per barrel), 2008 88

Table 5.19: Key barriers for biofuels 91

Table 6.20: Production costs of biofuels from various crops 103

Table 6.21: Cost of distribution and dispensation of various fuels from a central production facility to a filling station (Euro/GJ) 104

Table 6.22: Costs of various biofuels at the filling station using existing technology (2004) 106

Table 6.23: Cost comparison of biofuels with gasoline fossil fuels 107

Table 6.24: Cost estimates of various biofuels at the filling station using future technology, post- 2010 108

Table 6.25: Cost of harvesting, dewatering and drying algae, 2009 110

Table 6.26: Top biofuels companies, 2009 111

Table 6.27: Algal fuel capacity projections 2009-2014, 2009 112

Table 7.28: Comparison of worldwide fuel production from hydrocarbon sources versus biomass sources, 2005 122

Table 7.29: Worldwide biofuels fuel production volume (bn liters), 2008 122

Table 7.30: Amounts of raw materials to meet worldwide fuel demand, 2005 123

Table 7.31: Global bioethanol production (thousand tons of oil equivalent), 2008 125

Table 7.32: Biodiesel (million L/a), 2008 128

Table 7.33: Bioethanol in Europe (million L/a), 2008 130

Table 7.34: EU bioethanol production, supply and demand (1,000MT) 132

Table 7.35: EU bioethanol production - number of plants and capacity (1,000 MT) 132

Table 7.36: Feedstock use for bioethanol production (1,000MT) 133

Table 7.37: EU bioethanol consumption – main consumers (1,000 MT) 134

Table 7.38: EU bioethanol and gasoline consumption (Ktoe) 134

Table 7.39: Biodiesel production in Europe (millions liters/annum), 2009 135

Table 7.40: EU Biodiesel production – number of plants and capacity (1,000 MT) 137

Table 7.41: EU market share of biodiesel production in 2008 (%), 2009 138

Table 7.42: Feedstock use for biodiesel production (1,000MT), 2009 139

Table 7.43: EU biodiesel consumption (1,000MT), 2009 140

Table 7.44: EU biodiesel and diesel consumption (Ktoe), 2009 140

Table 7.45: Projected US ethanol production (billions of gallons), 2006-2012 141

Table 7.46: US ethanol market revenue forecast (US$bn), 2006-2012 142

Table 7.47: US bioethanol development (million L/a), 2009 143

Table 7.48: Existing and future ethanol capacity in the US, 2009 145

Table 7.49: US biodiesel (million L/a), 2009 146

Table 7.50: Ethanol profile comparison of the US and Brazil (2006) 148

Table 7.51: Brazil biofuels development (million L/a), 2009 149

Table 7.52: Brazilian biodiesel production, supply and demand (January-December, 000 Liters), 2009 151

Table 7.53: Brazilian fuel consumption matrix (000 m3) 151

Table 7.54: Brazilian soybeans and products production (000 hectares, 000 metric tons) 152

Table 7.55: Brazilian cotton and products production (000 hectares, 000 metric tons) 152

Table 7.56: Projected demand and supply of ethanol in India for 5% blend with gasoline 153

Table 7.57: India's ethanol requirement for 5% blending with gasoline sugar 154

Table 7.58: India's production & distribution of molasses and alcohol/ethanol in sugar (million Tons/ million Liters), 2008 155

Table 7.59: Projected demand for gasoline and diesel in India to 2012 (MT) 156

Table 7.60: Diesel and biodiesel demand in India using Jatropha (MT) 157

Table 7.61: China's major biodiesel plants production capacity (MT), 2008 159

Table 8.62: Biofuels infrastructure profiles, Q209 165

Table 8.63: Mechanisms to incentivize renewable energy generation 166

Table 8.64: EU renewable energy targets for 2020 (%) 168

Table 8.65: Renewable fuels targets in the US (billions of gallons per year), 2006-2012 169

Table 8.66: Biofuels energy targets 172

Table 8.67: Biofuels policy overview of selected countries 182

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