I previously mentioned the US government’s plan to invest up to $510m within the next three years as well as to partner with the private sector in producing advanced biofuels for use in military and commercial transportation.The Department of Agriculture (USDA), Department of Energy (DOE) and the US Navy will collaborate with private firms to construct or retrofit several drop-in biofuel plants and refineries.
The agencies said the facilities will be located in geographically diverse locations ready for market access. The biofuels should also meet military specifications and that it will not have any significant impact on food-based agricultural commodity supply.
The three agencies are currently seeking input from the private sector towards the creation of a public-private partnership in developing drop-in advanced biofuels.
There had been several economic/market study reports that came out recently on biofuels. One is from the Worldwatch Institute which said that global biofuels production increased 17% last year at an all time-high of 105bn liters (vs 90bn liters in 2009) mostly driven by high oil prices, global economic rebound (this one is a hmmm), and new laws and mandates in Argentina, Brazil, Canada, China and the US.
The US and Brazil remain the two largest ethanol producers with 49bn liters (57% of global output) and 28bn liters (33%), respectively. The European Union is the largest biodiesel producer occupying 53% of total global output in 2010. According to the report, some European countries are switching to ethanol from biodiesel because of a recent study from the European Commission that ethanol crops have higher energy content than biodiesel crops.
In the US, the National Biodiesel Board (NBB) put out its latest production statistics last month and reported that despite the weak economy, the biodiesel industry is on track to produce at least 800m gal/year for 2011, more than double that of the biodiesel production at 315m gallons last year. Of course last year, the biodiesel industry was greatly impacted when a $1/gal tax incentive was not extended when it expired in December 2009.
The tax incentive reinstated in December 2010 is slated to expire this year.
Meanwhile, the United Nation’s Food and Agriculture Organization (UN-FAO) recently published its 2011-2020 Biofuels Outlook and projected that the US will remain the largest ethanol producer and consumer while the European Union is expected to still be the major producer and user of biodiesel.
The share of corn-based ethanol over total ethanol produced in developed countries is expected to decrease from 89% over the 2008-2010 period to 78% in 2020. Cellulosic ethanol production is expected to rise representing about 8% of total ethanol production by 2020.
By 2020, FAO projected global energy share of ethanol in gasoline type fuel use at 8.8% compared to 5.3% average within 2008-2010 period. Volume of ethanol share in gasoline type fuel is expected to rise from 7.7% average in the 2008-2010 time frame to 12.6% by 2020.
Global ethanol production is projected to rise to 155bn liters in 2020 with a rate of 4% growth within the 2011-2020 period. Global biodiesel growth for the same period is projected at 6%. Projected global biodiesel production is 42bn liters by 2020 compared to the average 17.6bn liters within 2008-2010 time frame.
Global share of biodiesel in diesel type fuel will rise to 3.8% in 2020 compared to the average 2% in 2008-2010 estimate. Biodiesel volume share is expected at 5% in 2020 compared to the average 2.5% in 2008-2010.
[Photo from CNAS.org]