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World biofuel demand approaches 100 million tonnes

10th April, 2008

A study has predicted that world demand for biofuels will expand nearly 20% a year to 92 million tonnes in 2011.

Market expansion will come as the world market for bioethanol doubles and biodiesel demand grows, Cleveland-based industry research firm The Freedonia Group finds in a study entitled World Biofuels.

On a regional basis, growth will be driven by a rapid expansion of the biofuel market in the US, particularly for bioethanol. The Asia/Pacific region and western Europe will experience even faster advances.

Increases in the small African and eastern Europe markets will be well above average. Growth in Latin America will be modest, a consequence of Brazil's already sizable market for bioethanol.

The world market for biofuels has expanded rapidly in recent years. A combination of domestic politics, rising oil prices, increasing concerns about global warming, and potential economic opportunity have spurred a broad range of countries to pass laws that support biofuel industries.

World bioethanol demand has benefited from a powerful farm lobby in the US, as well as rising oil prices that have increased bioethanol demand in Brazil. Growing concerns about global warming have helped raise both bioethanol and biodiesel demand in the EU, while several countries in the Asia/Pacific region have instituted biofuel programmes as a means of boosting their local economies.

World biofuel production will track increases in demand as most countries seek to foster domestic biofuel industries, both to reduce reliance upon imported oil and to spur domestic economic development. This will continue to favour the development of cereal-based (maize and wheat) bioethanol capacity in the US and western Europe, as well as sugarcane-based bioethanol production in Latin America.

Biodiesel production will centre on soyabean oil in the Americas, rapeseed oil in Europe, and palm (and increasingly jatropha) oil in the Asia/Pacific region. Next-generation cellulosic bioethanol and algal biodiesel technologies will become commercially significant in the longer term.