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Global growth outlook for biodiesel

10th August January, 2007

The global market for biofuels is presently being driven by a handful of key variables setting the scene for tremendous market growth in biodiesel by the year 2020.

Over the next 15 years, the key drivers of global biofuels demand include escalating demands for transportation fuels, diminishing supplies of affordable petroleum, and increasing concerns for environmental, economic and national security issues. Each of these factors will amplify the growing importance of biofuels in years to come.

By the year 2020, the global population is expected to grow from 6 billion in 2006 to over 8 billion. As this growth occurs, it is clear biofuels will play an increasingly important role in addressing government and market demands for clean, alternative transportation fuels. These emerging market demands and national requirements for alternative fuels are already contributing to a rapidly expanding market for the production, consumption, distribution and import-export of ethanol and biodiesel fuels. From 2007 to 2020 the global energy market is expected to grow, on average, at about 1.5%. The US energy market is expected to grow at 1.7% a year to 2020, Europe at 1.3% a year, China at approximately 4% a year (ranging from estimates of 3.8% to 8% per year to 2020), India at 3% and Brazil at approximately 3% to 4% a year. Biofuels, including ethanol and biodiesel, will help to offset petroleum supply concerns, and an increasing hunger from emerging transportation markets in developed and developing countries.

Presently, Europe is the global leader in the effort to promote biodiesel. The EU represents the biggest biodiesel market in the world, accounting for over 80% of all biodiesel consumed and produced in the world, according to the European Biodiesel Board.

Comparatively, the US biodiesel market is already working hard and fast at changing this number. In 2006, Europe consumed nearly 2 billion gallons of biodiesel. In the same year, the US consumed approximately 250 million gallons of biodiesel. For Europe, 2 billion gallons only represents nearly 2% of all onroad transportation fuels. In the US, 250 million gallons represents less than 1% of all diesel consumed on-road.

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