World Biofuel Demand to Reach 121 Million Metric Tons in 2014

Growth in world biofuel demand will continue to expand at a rapid double-digit annual pace, reaching 121 million metric tons in 2014.  Bioethanol will experience the greatest gains, as continued steady growth in the large North American market will be accompanied by more rapid advances in the Asia/Pacific region and Europe.  Much faster growth will occur in the smaller biodiesel market as the maturation of biodiesel in Western Europe is offset by robust gains in all other regions.  Additionally, demand for other biofuels such as biobutanol and renewable diesel will begin to reach commercially significant volumes.  While historically not a factor, global trade in biofuels will rise rapidly going forward as large biofuel consuming countries are forced to seek additional supply, and a number of smaller developing countries seek to exploit biofuel exports. These and other trends, including market share and product segmentation, are presented in World Biofuels, a new study from The Freedonia Group, Inc., a Cleveland-based industry market research firm.

The global bioethanol industry will continue to be dominated by the United States and Brazil, the world’s two largest consumers and producers of bioethanol.  Delays in the emergence of second generation cellulosic ethanol as a viable alternative to grain-derived bioethanol will create demand for bioethanol derived from sugar cane (made mostly in Brazil) in the United States and Europe.  However, over the longer term this imbalance in demand and production will decline as cellulosic ethanol capacity is brought online and other biofuels begin to compete with bioethanol in the marketplace.  Other crops such as cassava and sweet sorghum will increasingly be used as bioethanol feedstocks in Africa and Asia, reflecting concerns about the potential use of food crops for biofuels and the general lack of access to technology, infrastructure and funding to pursue more advanced alternatives.

Western Europe has emerged as the dominant consumer of biodiesel due to the regionwide focus on diesel as a more energy efficient transport fuel and the need by member nations to comply with the European Union biofuel directive.  An increasing EU biofuel obligation will continue to drive biodiesel demand growth in the region, as well as in Eastern Europe, going forward.  However, supply constraints will force European consumers to turn to exporters in South America and Asia to satisfy demand.  Additionally, rising biodiesel standards in countries outside of Europe will lead to even faster demand growth among all other regions.

The Freedonia Group is a leading international business research company, founded in 1985, that publishes more than 100 industry research studies annually. This industry analysis provides an unbiased outlook and a reliable assessment of an industry and includes product segmentation and demand forecasts, industry trends, demand history, threats and opportunities, competitive strategies, market share determinations and company profiles.