The 53.2 billion gallon a year (BGY) biofuel industry is poised for a sharp slowdown in capacity growth, to a 3.2% annual rate from 2013 to 2017—60.4 billion gallons—off from 19.6% annually from 2005 to 2013, according to a new report from Lux Research.
The sharp decline will be due to a significant industry transition to novel fuels and feedstocks, to enable long-term growth in the face of impediments such as the food vs. fuel debate and the imminent blend limits for biodiesel and ethanol. Next-generation biofuel—such as renewable diesel and butanol—that can offer higher blends, in contrast, are not quite mature.
To quantify global capacity expansion of biofuels, Lux Research analysts built a database of more than 1,700 biofuel production facilities in 82 countries with capacity data through 2017, besides evaluating leading technology providers.
Among their findings:
Ethanol’s dominance will continue. Ethanol, which accounted for 65.9% of global biofuel capacity in 2013, will slightly increase its share to 66% in 2017. Other fuels, such as renewable diesel, butanol, biojet and biocrude, will grow at a significantly higher 18.7% annual rate, but remain just 3.3% of all biofuels.
Renewable diesel leads next-generation biofuels. Driven by technology, renewable diesel will emerge as the leading next-generation fuel, attaining a capacity of 1.1 BGY in 2017. Renewable diesel from waste will emerge as a key biofuel process.
Growth of cellulosic ethanol will be slower. Companies led by Beta Renewables, POET-DSM and Abengoa have announced 782 MGY of cellulosic ethanol capacity but only 384 MGY will come to fruition.
The report, titled “Emerging Feedstocks and Fuels Spark Biofuel Capacity Expansion through 2017,” is part of the Lux Research Alternative Fuels Intelligence service.