Biodiesel Demand To Reach $71 bln, Research Report Says

The biofuel sector,  which has been nursing a hangover after the Wall Street money that had poured into the business evaporated, is now a real buyers market, poised for a come back, says a report , the Boulder, Colo. -based market research firm.

Pike Research predicts that demand for biodiesel alone could peak to $71billion in 2020, from $18.4 billion currently.

Fuelling this growth are the emergence of new feedstocks such as waste grease, algae, and jatropha as well as government mandates requiring refiners to blend biofuels with the regular pools of fuels they produce.

In a prepared statement, Pike Research Managing Director, Clint Wheelock said:

The biofuels market is currently at a point of discontinuity. The ethanol business has suffered a significant blow over the past few years, yet the prospects remain very bright for renewed growth in ethanol as well as next generation biodiesel technologies.

GER has reported on a number of significant investments, by small and big companies, all eager to take advantage of the bargain prices fetched by ethanol assets.

Noteworthy transaction includes Murphy Oil’s acquisition, last fall, of a brand new refinery of corn-based ethanol in North Dakota, formerly owned by bankrupt VeraSun. Also, over the past year, New York-based biofuel investor EcoSystem has raised $89 million to buy distressed U.S., refineries producing corn-based ethanol.

Earlier this month Royal Dutch Schell announced a $12 billion joint venture with Cosan, one of Brazil’s largest producers of sugar-based ethanol. Like Shell, BP, attracted by the sector’s long-term rationale, has also  been redirecting a significant amount of its green capital expenditure to support biofuel projects, at the expense of solar or wind power developments.

Image: Pike Research

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