The International Energy Agency Monday forecast global biofuel output will double from 2006 levels to 1.75 million barrels a day in 2012. In its medium-term oil market report through to 2012, the agency, the energy security watchdog for the Organization for Economic Cooperation and Development, included its second annual report on biofuels.
IEA also raised its 2006 biofuel supply baseline by 79,000 barrels a day to 863,000 barrels a day due to stronger-than-expected growth and more detailed capture of projects. Still the agency warned while the forecasts showed a "considerable rate of growth" for global biofuel production they were significantly below capacity planned for 2012. IEA says it maintained a cautious biofuels stance because high feedstock prices raised doubts over economic viability.
"Many projects...will not see the light of day," says IEA, adding current economics mostly favors use of feedstocks such as corn, sugar, soybeans, wheat and palm oil for food over fuel. Technology for significant production of biofuels from other feedstocks isn't expected by the IEA to come into play by end of the 2012 outlook period.
Thus the agency looks for actual 2012 output of 1.75 million barrels a day to fall short of potential capacity of 2.92 million barrels a day. IEA forecasts 50% global biofuel supply growth between 2007 and 2009, mostly in the U.S. IEA projects daily U.S. biofuel production to grow from 330,000 barrels in 2006 to 533,000 barrels in 2009, but to then remain steady to 2012.
The agency says
However due to
The agency expects
IEA projects only a third of 2012 proposed daily output capacity of 604,000 barrels will be produced. And about a third of this unrealized production will be in
IEA says while biofuels will still only account for 2% of global oil supplies by 2012, they will account for 13% of volume growth in gasoline and gasoil/diesel demand near-term. "This is causing investors to reevaluate the need for incremental refinery capacity," says IEA.
Source: Dow Jones newswires