New technologies to drive global biofuels demand to 67 bn gallons in 2022

Advanced biofuels will nearly double in 5 years to 9.6 billion gallons per year, says Lux Research

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Last Updated : Feb 18 2017 | 4:02 PM IST

New biofuel technology is finally starting to push aside traditional biofuels like first-generation biodiesel. New facilities based on non-food feedstocks and producing novel fuels account for over half of new capacity deployment for the first time in the biofuel industry’s history, according to Lux Research. However, overall output will grow at a slower pace to 67 billion gallons a year (BGY) in 2022, from 59 BGY in 2016.

“A new era of technology commercialisation has brought the global biofuels industry to the cusp of a tipping point, as new facilities target low-carbon and high-performance drop-in biofuels. With many of the technologies capable of producing advanced biofuels still at demonstration scale, the next five years will be critical as companies raise capital, establish value chain security and produce commercial volumes as these projects come online,” said Runeel Daliah, Lux Research Associate and lead author of the report titled, ‘Biofuels outlook 2022: The dawn of a new era in global biofuel capacity expansion’.

According to Lux Research analysts, the global biofuels industry will grow at a slower 2.2 percent annual rate to 67 BGY of nameplate capacity by 2022. First-generation biofuels, which hold a 91.5 percent market share, will continue to dominate but will lose nearly 6 percent of market share, as advanced biofuels see rapid growth, nearly doubling capacity to 9.6 BGY.

Second-generation biodiesel makes up 65 percent of the 5 BGY advanced biofuel market today, but is projected to lose 26 percent market share by 2022 due to the rapid growth of low-carbon and high-performance drop-in biofuels such as renewable diesel.

As per the Lux Research report, thermochemical and catalytic processes are ushering in new era. “Emerging thermochemical and catalytic technologies will surpass bioconversion processes to make up over half of the new capacity deployment for the first time in the biofuel industry’s history,” said the research firm.