One comment late in the day got me thinking yesterday. A delegate said that at the moment ‘the profit is with the crushers’ this made me realise that there is not much integration in biofuels from the soil to the wheel. And in other industries I’ve written about if integrated players go to the wall, it is not usually because they have charged themselves too much for thief feedstock.
But I have seen plenty of smaller non-integrated players either get bigger and integrated, or get out of markets. Integration can have advantages, the main one being that you can take your profit anywhere along the chain.
So who’s going to be the owners in five years. If I’m still around then, please throw this back in my face, but my guess today is big firms energy firms, possibly a couple of commodity players, ADM, Cargill, Abengoa, and possibly a couple of technology firms or their spin-offs, if they can stretch their business models enough.
The 2006 European Biofuels Forum is being held in Warsaw, Poland from 20-21 November and is organised by the World Refining Association.
Comments (2)
With the ethanol kick so big, Cargill with its control of the food supply should also be in control of our energy also. Scary!!
They are now swapping medical care for crops. They are paying politicians for their votes on important bills and appropriations.
Americans don't really understand how much control they really have.
Add to the fact that they don't really care about hiring illegal aliens which are cheaper and less likly to cause a stir.
Be afraid, be very afraid.
Posted by Robin Schmieder | November 22, 2006 5:27 PM
Posted on November 22, 2006 17:27
Hi Robin,
I can see why under your terms the idea of integration looks scary. But what it really points up is the need to develop biofuels from non-food sources.
Does it matter that the companies which eventually run the biofuels business are priveatly held or public? As long as they do not dominate the markets in which they operate and try to set prices it shouldn't make much difference.
Do you have any hard evidence of bribery and employing illegals, if you do, have you taken it to your local police force?
Posted by Simon Robinson | November 23, 2006 10:24 AM
Posted on November 23, 2006 10:24