After healthy growth over the past decade, the global biofuels industry is entering a new era marked by feedstock flexibility, product neutrality, and sustainability. As a near-term solution, biofuels are a proven alternative to petroleum-based fuels. Long term, biofuels could radically alter the fuel market’s geopolitical landscape by meeting an expanding portion of consumer demand in ground, aviation, and maritime transportation fuel markets.

While first generation biofuels derived from corn starch, sugarcane, rapeseed, and soy are projected to underpin growth over the next decade, the emergence of advanced conversion pathways and non-food feedstocks will unlock considerable production potential throughout the world. Despite huge demand for biofuels from transportation end-markets, however, access to inexpensive feedstocks and financing hurdles remain challenging obstacles for biofuels production trying to keep pace with emerging mandates. According to a recent report from Pike Research, widespread commercialization will ultimately depend on whether current trends lead to price parity with petroleum-based fuels over the next decade.

“Early bets on cellulosic pathways have yet to deliver significant volumes, opening up opportunities for a number of advanced pathways. Meanwhile, it remains unclear whether the shift toward high-value, low-volume bio-chemical and product markets as a source of near-term revenue will accelerate or impede biofuels production scale-up efforts.”

“Although many feedstocks, technologies, and conversion pathways currently share the same tent, the coming decade promises to be one of shakeouts,” says senior analyst Mackinnon Lawrence. “Early bets on cellulosic pathways have yet to deliver significant volumes, opening up opportunities for a number of advanced pathways. Meanwhile, it remains unclear whether the shift toward high-value, low-volume bio-chemical and product markets as a source of near-term revenue will accelerate or impede biofuels production scale-up efforts.”

Nevertheless, Pike Research’s analysis finds that the global market for biofuels will more than double over the coming decade, increasing from $82.7 billion in 2011 to $185.3 billion by 2021. Although growth is expected to climb steadily through 2016, more robust growth is expected between 2017 and 2021, as a combination of higher oil prices, emerging mandate obligations, availability of new feedstocks, and the scaling up of advanced technologies drive increased investment in the industry. Ethanol production is expected to maintain its dominance, reaching 49.5 billion gallons per year (BGPY) by 2021, as compared to biodiesel’s 16.2 BGPY.

Pike Research’s report, “Biofuels Markets and Technologies”, provides an in-depth analysis of global ethanol and biodiesel opportunities as well as an evaluation of key challenges facing the broader biofuels industry. The study includes a comprehensive examination of market drivers, including policy and regulatory developments as well as emerging mandates, feedstock and production economics, expanding demand in aviation and chemical markets, the commercial readiness of various pathways, and detailed profiles of key industry players across the entire biofuels value chain. Market forecasts extend through 2021 and include projections for mandated demand, production, feedstock utilization, and market value segmented across geography and fuel. An Executive Summary of the report is available for free download on the firm’s website.