Although biofuels could meet a significant portion of consumer, aviation, and maritime transportation fuels, and many governments have mandates to increase their percentage of the fuel mix, the market is being held back from expensive feedstock and financing hurdles, says Pike Research.
Biofuels will only become widespread if they reach price parity with petroleum-based fuels over the next decade, they say.
"Although many feedstocks, technologies, and conversion pathways currently share the same tent, the coming decade promises to be one of shakeouts," says senior analyst Mackinnon Lawrence. "Early bets on cellulosic pathways have yet to deliver significant volumes, opening up opportunities for a number of advanced pathways. Meanwhile, it remains unclear whether the shift toward high-value, low-volume bio-chemical and product markets as a source of near-term revenue will accelerate or impede biofuels production scale-up efforts."
Still, Pike forecasts the global biofuels market will more than double over the coming decade, from $82.7 billion in 2011 to $185.3 billion by 2021.
The market will grow steadily through 2016, but the biggest growth will occur between 2017-2021, when a combination of higher oil prices, emerging mandate obligations, availability of new feedstocks, and the scaling up of advanced technologies drive increased investment in the industry.
In the short run, ethanol will continue to dominate, reaching 49.5 billion gallons per year by 2021, as compared to biodiesel's 16.2 BGPY.
The report, "Biofuels Markets and Technologies," is here: