WhitePaper on Global Biofuel Market


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WhitePaper on Global Biofuel Market

  1. 1. Whitepaper on Global Biofuel Market Copyright © 2013 RNCOS. All rights reserved. Unless otherwise indicated, all materials on these pages are copyrighted by RNCOS. All rights reserved. No part of these pages, either text or image may be used for any purpose other than personal use. Therefore, reproduction, modification, storage in a retrieval system or retransmission, in any form or by any means, electronic, mechanical or otherwise, for reasons other than personal use, is strictly prohibited without prior written permission.
  2. 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. 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. 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. 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. 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. 7. Whitepaper on Global Biofuel Market GROWTH PARTNER We help you make informed decisions through the practical application of research, hand holding you to your success… RNCOS is a leading business consultancy services company believes that in today's cut-throat environment, companies need to understand their business environment better. Critical questions that businesses need to address: What geographies to target? How to identify & increase the customer base? How to enhance the brand image? How to launch new products and find distributors? What is the current market structure and market size? We understand your immediate needs and your long-term goals and objective and work with you on how to accomplish them. RNCOS blends the best of strategy consulting with the best of market research to provide organizations with accurate, succinct answers to their most important business questions. What is the market size Structure of the market Who are your buyers Buyers’ buying behavior Expectations from the product Similar products in the market Features, attributes & market share of these products Customer preferences Price range of these products Most suitable distributors and channels for your business. Analyzing their strength, credibility, scale of operations. Assisting in distributor selection. Financial & strategic analysis of existing competition Acceptance level among customers Emerging competitors New market entrants
  8. 8. Whitepaper on Global Biofuel Market RNCOS is a business consultancy services firm that provides services to clients across the Globe. With more than a decade of industry experience and expertise, we boast of a distinguished clientele' across multi geographies and industry verticals. Our strength lies in the healthcare sector besides Retail and Information Technology. Be it market testing, product launch, competition assessment, customer satisfaction study, pricing analysis or any other requirement, RNCOS custom research team acts proactively to fit in the best possible solution for our valued clients. We believe in multi-level client interaction and complete transparency from the project commencement till effective implementation, thus ensuring total customer satisfaction at the end. Having served close to 200 renowned as well as start-ups globally, our strength lies in multilingual and multi geography tie-ups with leading market survey partners who assist us in gaining vital primary insight straight from the horse's mouth. Vartika Sehgal Sr. Research Specialist RNCOS B-129, Sector - 6, Noida - 201301 Phone: + 91 (120) 4224700 Fax: +91 (120) 4224707 Email: marketing@rncos.com Website: http://www.rncos.com