Could Second-Generation Biofuels Really Expedite Energy Sufficiency Ambitions?

According to a study by Transparency Market Research, by 2019, the global biofuels market is poised to be worth $15.90 billion with 50,921.4 million gallons of biofuel projected to be produced annually.

As oil prices tumble, it is time to ponder over whether the world is finally moving into a ‘post-oil’ phase of existence. It might be way too early to write off crude oil from our growth story, but there’s no denying the fact that other fuel sources are starting to gain a foothold in the energy system.

The biofuels segment, for one, is pulsing with possibilities. About 1% of the energy used globally can now be traced back to a biofuel source. It’s a small start, but by no means insignificant. With the past decade being marked by government incentives promoting biofuels, volatile oil prices, green venture investments, and emerging technologies, a firm foundation for the growth of the biofuels industry has already been laid.

These factors have been further accentuated by exciting R&D initiatives and millions of investment dollars in projects that promise to provide biofuel breakthroughs. Needless to say, the mounting pressure against the use of non-renewable sources of energy bodes well for the overall biofuels industry.

According to a study by Transparency Market Research, by 2019, the global biofuels market is poised to be worth $15.90 billion with 50,921.4 million gallons of biofuel projected to be produced annually. And, as the core biofuels market grows, it has spurred growth in the base market – the biomass industry – as well.

Second generation biofuels hold lucrative potential

The emergence of a rewarding market for biodiesel and bio-ethanol has become clear. But the growth story in this industry will likely reach the next level with the development of second-generation biofuels derived from recycling cooking oil, from agricultural waste/residues and even directly from woody crops. That’s because first generation biofuels are extracted from vegetable oil or sugars contained in arable crops. Their source of origin has placed first generation biofuels in the middle of a raging (and many will argue, legitimate) ‘fuel versus food’ competition, causing food prices to escalate.

Besides, where first generation biofuels were land-intensive, the second generation calls for the deployment of more capital and technology. For instance, second generation biofuels can be derived from feedstock as varied as algae to forestry or agricultural waste to grasses to energy crops. Many of these crops can be cultivated not on existing agriculture land, but on marginal terrain, thus effectively putting an end to the ‘food versus fuel’ debate.

‘Fuel versus Food’ Makes Way for ‘Price versus Value’ Debate

According to the October 2014 issue of the US Department of Energy’s Clean Cities Alternative Fuel Price Report, in the U.S., a gallon of gasoline was priced at US$3.34 in October, whereas Biodiesel (B99-B100) cost US$4.24 in the same month. While there is little doubt that replacing fossil fuels with second generation biofuels could mitigate the undesirable effects resulting from the production and use of the former, the question remains: Are biodiesels worth their cost yet? Before this question can elicit a confident “yes” as an answer, a number of pain points such as distribution, development and retailing networks need to be addressed.

More importantly, the freefalling oil prices pose a direct threat to biofuels, possibly even weakening the resolve of federal agencies to promote the latter at the policy level.

The Flipside of the Growth Story and How to Address it

The biofuels industry could—on the flipside—potentially lead to a technology gap between developed and developing countries in the biofuel arena. According to a report titled ‘State of the Global Biofuels Market’ recently tabled by the United Nations Conference on Trade and Development (UNCTAD), this concern can be alleviated to some extent by distributing sustainability certification costs evenly through the supply chain, so that the weakest link—the small farmer—is shielded against the burdensome cost. This, the report states, will also prevent investments from stagnating.

Nevertheless, as the demand and consumption of energy continue their upward spiral and non-renewable power infrastructure becomes increasingly difficult to set-up and sustain, biofuels are well on their way to heralding a new chapter in energy-sufficiency.

Source :

Author: Anuradha Wadhwani

Contact Details

Company Name: Transparency Market Research
Issued By: Anuradha Wadhwani
Phone: 15186181030
Address: State Tower, 90 State Street,
City: Albany
State: New york
Zip: 12207
Country: United States
Website: Visit the website

Keywords : Energy, Biofuels,

by Anuradha Wadhwani (few years ago!)

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