Biodiesel Information

Biodiesel Emerges as a Global Industry

The global markets for biodiesel are entering a period of rapid, transitional growth, creating both uncertainty and opportunity. The first generation biodiesel markets in Europe and the US have reached impressive biodiesel production capacity levels, but remain constrained by feedstock availability. In the BRIC nations of Brazil, India and China, key government initiatives are spawning hundreds of new opportunities for feedstock development, biodiesel production, and export

A fundamental transition in global fuel production is now happening. In the year 2007, there were only 20 oil producing nations supplying the needs of over 200 nations. By the year 2010, more than 200 nations will become biodiesel producing nations and suppliers. The world is entering a new era of participation by emerging market nations in global green energy production for transport fuels.

Growth in Non-Food Feedstocks

Biodiesel feedstock markets world-wide are in transition from increasingly expensive first generation feedstocks soy, rapeseed and palm oil to alternative, lower cost, non-food feedstocks. As a result, a surge in demand for alternative feedstocks is driving new growth opportunities in the sector.

Biodiesel growth from non-food feedstocks is gaining traction around the world.

For example, China recently set aside an area the size of England to produce jatropha and other non-food plants for biodiesel. India has up to 60 million hectares of non-arable land available to produce jatropha, and intends to replace 20% of diesel fuels with jatropha-based biodiesel. In Brazil and Africa, there are significant programs underway dedicated to producing non-food crops jatropha and castor for biodiesel.

Sustainability Concerns Drive Industry Growth

An increasing number of second generation biodiesel projects are now emerging in anticipation of growing sustainability concerns by governments, and in response to market demands for improved process efficiencies and greater feedstock production yields.

Biodiesel Emerges as a Global Industry. The global markets for biodiesel are entering a period of rapid, transitional growth, creating both uncertainty and opportunity. The first generation biodiesel markets in Europe and the US have reached impressive biodiesel production capacity levels, but remain constrained by feedstock availability. In the BRIC nations of Brazil, India and China, key government initiatives are spawning hundreds of new opportunities for feedstock development, biodiesel production, and export.

A fundamental transition in global fuel production is now happening. In the year 2007, there were only 20 oil producing nations supplying the needs of over 200 nations. By the year 2010, more than 200 nations will become biodiesel producing nations and suppliers. The world is entering a new era of participation by emerging market nations in global green energy production for transport fuels.

Growth in Non-Food Feedstocks

Biodiesel feedstock markets world-wide are in transition from increasingly expensive first generation feedstocks soy, rapeseed and palm oil to alternative, lower cost, non-food feedstocks. As a result, a surge in demand for alternative feedstocks is driving new growth opportunities in the sector.

Biodiesel growth from non-food feedstocks is gaining traction around the world. For example, China recently set aside an area the size of England to produce jatropha and other non-food plants for biodiesel. India has up to 60 million hectares of non-arable land available to produce jatropha, and intends to replace 20% of diesel fuels with jatropha-based biodiesel. In Brazil and Africa, there are significant programs underway dedicated to producing non-food crops jatropha and castor for biodiesel.

Sustainability Concerns Drive Industry Growth

An increasing number of second generation biodiesel projects are now emerging in anticipation of growing sustainability concerns by governments, and in response to market demands for improved process efficiencies and greater feedstock production yields

Many governments are now revising their biofuels policies in a reactive or a proactive manner. If governments continue to pro-actively support and promote research & development in second generation technologies including renewable diesel, BTL biomass to liquids projects, algae, and cellulosic diesel; and if governments continue to actively support the development of sustainable, alternative, lower-cost feedstocks such as algae, jatropha, castor, used vegetable oil, tallow, and other sustainable feedstocks, the prospects for achieving biodiesel targets may be realized faster than anticipated. The Biodiesel 2020 study finds that each of these variables will be essential to achieving biofuels for transport targets.

Second Generation Opportunities

As the Europe and US markets transition to larger plants, alternative feedstocks and 2nd generation technologies, the Biodiesel 2020 study predicts a consolidation among smaller, first generation producers from 2008-2010, accompanied by a series of mergers and acquisitions in the field.

From 2008 through 2020, a series of transitions in the biodiesel industry will create winners and losers. Biodiesel producers that are best able to evolve and adapt to transitions in technology, markets, feedstocks and government policies are most likely to succeed over the long term.

Biodiesel 2020: A Global Market Survey, 2nd Edition

Biodiesel 2020 author Will Thurmond