Global Biofuel Market - Aug'13

Whitepaper on Global Biofuel Market

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Global BiofuelMarket OverviewBiofuels 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 ofMaterials

Easily Renewable

Less Carbon

High InitialInvestment

Using Valuable Cropland

Lower Output

Asia Pacific regionhas shown the

fastest growth ofaround 17.6% in thebiofuel production in

2012. In the Asiapacific region, Chinawas the leader withthe production of1729 Thousand

Tonnes of biofuel in2012, followed by

Indonesia with 1212Thousand Tonnes of

biofuel.


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


Figure 1: Share of Major Countries in Biofuel Production in Americas (%), 2012

Figure 2: Share of Major Countries in Biofuel Production in Europe (%), 2012


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


EthanolEthanol 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.


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.


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.


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Global Biofuel Market - Aug'13

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