Motivated by growing concerns related to energy security, climate change, and economic stagnation, at least 38 national governments throughout the world have enacted blending mandates or targets to accelerate the expansion of biofuels production and consumption in the transportation sector. Long term, the widespread scale-up of biofuels could radically alter the industrial and geopolitical landscapes by meeting an expanding portion of consumer demand in ground, aviation, and maritime fuel markets. But with conventional biofuels constrained by social and environmental concerns, and price parity and access to financing a persistent obstacle to advanced biofuels scale-up, a number of difficult challenges must be overcome if the industry is to keep pace with emerging mandates.

While early success in Brazil, the United States, and the European Union demonstrate the commercial viability of conventional biofuels, the industry is entering a new era of feedstock flexibility, product neutrality, and sustainability underpinned by the emergence of advanced conversion pathways and feedstocks. Most industry players are confident that biofuels production and consumption will expand in developed and developing economies alike over the next decade. However, disproportionate feedstock access and utilization is expected to lead to increased global trade in biofuels, with countries like Brazil emerging as leading suppliers for the world market.

This Pike Research report provides an in-depth analysis of global ethanol and biodiesel opportunities as well as an evaluation of key challenges facing the broader biofuels industry. The study includes a comprehensive examination of market drivers, including policy and regulatory developments, feedstock and production economics, the commercial readiness of various pathways, as well as detailed profiles of key industry players across the entire biofuels value chain. Market forecasts extend through 2021 and include projections for mandated demand, production, feedstock utilization, and market value segmented across geography and fuel.

Key Questions Addressed:

• What are the key drivers shaping the expansion of the biofuels industry over the next decade?
• Where are the greatest feedstock opportunities and how will they impact ethanol and biodiesel production growth?
• Where are the most promising biofuels expansion opportunities?
• What are the key policy and regulatory developments impacting the industry?
• What investment trends and strategic partnerships will drive future growth?
• How will sustainability determine market access?
• What are the key obstacles facing various conversion pathways?
• What end-market obstacles persist and how can they be overcome?
• How will emerging demand from aviation, chemical, and military stakeholders impact the commercialization of advanced biofuels?
• What supply chain challenges must be overcome for biofuels to achieve widespread scale-up?

Who needs this report?

• Investors and financial institutions
• Biofuels technologists and technology providers
• Conventional and advanced biofuels producers
• Aviation fuel buyers and partners
• Advanced chemical producers and stakeholders
• Biotechnology industry stakeholders
• Oil industry stakeholders
• Biomass feedstock growers and suppliers
• Policy and decision makers
• Government agencies
• Industry associations

Table of Contents

1.     Executive Summary

1.1   Market Overview

1.2   About this Report

1.3   State of the Industry

1.4   Main Findings

1.5   Key Trends

1.6   Strategic Recommendations

2.     Market Issues

2.1   What Are Biofuels?

2.1.1     Brief History of Biofuels

2.1.2     Why Biofuels?

2.1.3     The Evolution of Biofuels

2.1.3.1     Classification of Biofuels by Generation

2.1.3.2     Classification of Biofuels by Technology

2.1.4     Differentiating Among Biofuels

2.2   The Role of Biofuels in Energy Markets

2.2.1     Biofuels Market Overview

2.2.1.1     Existing Production

2.2.1.2     Biofuels Market Growth

2.2.1.2.1.    Snapshot of the Global Ethanol Market

2.2.1.2.2.    Snapshot of the Global Biodiesel Market

2.2.2     Replacing the Whole Barrel

2.3   Market Drivers

2.3.1     Energy Security

2.3.1.1     Rising Petroleum Demand Worldwide

2.3.1.1.1.    Price of Oil

2.3.1.1.2.    Oil Price Volatility

2.3.1.2     Dependence on Oil Imports

2.3.2     Environmental Security

2.3.2.1     Biofuels and GHG Emissions Reductions

2.3.2.1.1.    The Feedstock Matters

2.3.2.2     Biofuels and Emerging Carbon Regimes

2.3.3     Economic Development

2.3.3.1     Rural Development

2.3.3.2     Cheap Energy

2.4   Growth Barriers

2.4.1     Price Parity

2.4.2     Access to Financing

2.4.3     Access to Low-Cost and Concentrated Feedstock Sources

2.4.3.1     Fermenters Chasing Cheap Sugars

2.4.3.1.1.    Conventional Biofuels

2.4.3.1.2.    Advanced Biofuels

2.4.3.2     Thermochems Knock on Woody Biomass

2.4.3.3     Taking out the MSW and other Wastes

2.4.3.4     Dedicated Energy Crops

2.4.3.5     The (Final?) Feedstock Frontier

2.5   Supply Chain Issues

2.5.1     Building the Supply Chain

2.5.1.1     Growers/Landowners

2.5.1.2     Seed Companies

2.5.1.3     Processors and Producers

2.5.1.4     Distributors

2.5.2     Regionality: All Biomass Is Local

2.5.2.1     Balancing Biomass Diversity and Capital Efficiency

2.5.2.2     The Rise of Feedstock Hubs

2.5.2.2.1.    National Feedstock Hubs

2.5.2.2.2.    International Biomass Hubs

2.5.2.3     Limits of Local Biomass

2.5.3     End-Market Access

2.5.3.1     Ethanol Markets

2.5.3.1.1.    E10 and E15

2.5.3.1.2.    E85

2.5.3.2     Biodiesel Markets

2.5.3.3     Aviation Biofuels

2.5.3.3.1.    Commercial Aviation

2.5.3.3.2.    Growing Aviation Demand in Asia Pacific

2.5.3.4     Military Demand

2.5.3.5     Optimum Fuel versus Drop-in Compatibility

2.6   Industry Threats

2.6.1     Environmental and Social Issues

2.6.1.1     Food versus Fuel

2.6.1.2     Land Use Change

2.6.1.3     Biofuels-Water Nexus

2.6.2     Managing Public Scrutiny

2.6.2.1     Not All Biofuels Are Created Equal

2.6.2.2     Ethical Implications of Biofuels

2.6.3     Technology Threats

2.6.3.1     Biofuels versus Electrification of Transportation

2.6.3.1.1.    Biofuels Benefit from Near-term Market Availability

2.6.3.1.2.    Liquid Fuels as Viable Near-term Solution

2.6.3.2     Alternative Fossil Fuels

2.7   Policy and Regulatory Issues

2.7.1     Current Policy Landscape

2.7.2     Mandates

2.7.2.1     United States’ Renewable Fuel Standard

2.7.2.1.1.    RFS2

2.7.2.1.2.    RFS2 Mechanics

2.7.2.1.3.    Assessing RFS2’s Impact

2.7.2.2     Brazil’s ProAlcool Policy

2.7.2.3     The EU’s Renewable Energy Directive

2.7.2.4     China’s 12th Five-Year Plan

2.7.3     Subsidies and Tax Credits

2.7.3.1     United States

2.7.3.2     EU-27

2.7.3.3     Brazil

2.7.4     Sustainability

2.7.4.1     Sustainability Certification Schemes

2.7.4.2     Sustainability Compliance

2.7.4.2.1.    EU: Renewable Energy Directive and Fuel Quality Directive

2.7.4.2.2.    California’s Low Carbon Fuel Standard

2.7.4.3     Sustainability and Commercialization

2.8   Biofuels Investment Climate

2.8.1     Public Investment Climate

2.8.1.1     United States

2.8.1.1.1.    United States Consolidates Investments

2.8.1.1.2.    Loan Guarantees and Grants

2.8.1.2     Rest of World

2.8.2     Private Investment Climate

2.8.2.1     Venture Capital

2.8.2.2     Public Equity/Capital Markets

2.8.2.3     IPO Market

2.8.2.4     Corporate Investors

2.8.2.4.1.    Big Oil

2.8.2.4.2.    Chemical and Agribusiness Investors

2.8.2.4.3.    Airlines

3.     Biofuels Economics

3.1   Overview of Biofuels Production Costs

3.1.1     Cost Structure of Biofuels

3.1.2     Co-Products as Cost or Profit Centers

3.1.2.1     Ethanol Co-Products

3.1.2.2     Biodiesel Co-Products

3.2   Price Parity with Petroleum Fuels

3.2.1     Historical Retail Prices of Biofuels

3.2.2     Cost Comparison of Biofuels and Petroleum Fuels on BTU Basis

3.2.3     Economics of Conventional Biofuels

3.2.3.1     Feedstock Costs

3.2.3.1.1.    First Generation Ethanol

3.2.3.1.2.    First Generation Biodiesel

3.2.3.2     Other Costs

3.2.4     Economics of Advanced Biofuels

3.2.4.1     Estimating Advanced Biofuels Price Parity

3.2.4.2     Seeking Revenue in Low-Volume, High-Value Markets

3.2.4.3     Opportunity Costs of Biomass-to-Biofuels

3.3   Sizing up the Investment Challenge

3.3.1     Cost of Biorefinery Scale-up

3.3.2     Infrastructure Investment

3.3.2.1     Transporting Ethanol

3.3.2.2     Transporting Biodiesel

3.3.3     Biofuels Cost Projections

4.     Technology Issues

4.1   Technology Outlook

4.1.1     Overview of Biofuel Conversion Pathways

4.1.2     Commercialization Status of Conversion Technologies

4.2   Conversion Technologies – Conventional Biofuels

4.2.1     Conventional Ethanol

4.2.1.1     Dry Milling

4.2.1.2     Wet Milling

4.2.2     Conventional Biodiesel

4.2.2.1     Processing Improvements

4.2.3     Biogas

4.3   Advanced Biofuels

4.3.1     R&D

4.3.2     Cellulosic Ethanol

4.3.2.1     Hydrolysis Advances

4.3.2.1.1.    Acid Hydrolysis

4.3.2.1.2.    Enzymatic Hydrolysis

4.3.2.1.3.    Fermentation Advances

4.3.2.2     Gasification & Synthesis

4.3.2.2.1.    Plasma Gasification (Gas Plasma Arc)

4.3.2.2.2.    Catalytic Hydrothermal Gasification of Wet Biomass Feedstocks

4.3.3     Advanced Biodiesel

4.3.3.1     Hydrotreated Vegetable Oil

4.3.3.2     Biomass-to-Liquids

4.3.4     Other Advanced Biomass-Based Fuels

4.3.4.1     Algae-Based Biofuels

4.3.4.1.1.    Algae Technology Overview

4.3.4.1.2.    Algae R&D Challenges

4.3.4.1.3.    Algae Outlook

4.3.4.2     Bio-Synthetic Gas

4.3.4.3     Pyrolysis Oil

4.3.4.3.1.    Flash & Catalytic Pyrolysis

4.3.4.3.2.    Thermal Depolymerization

4.4   Improving Feedstock Performance

4.4.1     Feedstock Optimization

4.4.2     Ethanol Missing Link

4.5   Advanced Biorefineries

5.     Key Industry Players

5.1   Competitive Landscape

5.2   Agribusiness

5.2.1     Archer Daniels Midland Company

5.2.2     Bunge Limited

5.2.3     Ceres Inc.

5.2.4     Monsanto Company

5.2.5     SG Biofuels Inc.

5.2.6     Sustainable Oils

5.2.7     Syngenta AG

5.3   Producers

5.3.1     Abengoa Bioenergía, S.A.

5.3.2     Amyris

5.3.3     Australian Renewable Fuels Limited

5.3.4     Cosan

5.3.5     Coskata, Inc.

5.3.6     Enerkem

5.3.7     Fulcrum BioEnergy

5.3.8     Gevo

5.3.9     Imperium Renewables, Inc.

5.3.10   INEOS Bio

5.3.11   Joule Unlimited

5.3.12   KiOR

5.3.13   LanzaTech NZ Ltd.

5.3.14   LS9, Inc.

5.3.15   POET, LLC

5.3.16   Qteros

5.3.17   Renewable Energy Group, Inc.

5.3.18   Solazyme, Inc.

5.3.19   Solena Group

5.3.20   Terrabon, Inc.

5.3.21   ZeaChem Inc.

5.4   Integrated Energy Companies and Independent Oil Refiners

5.4.1     BP p.l.c.

5.4.2     Chevron Corporation

5.4.3     CNPC

5.4.4     ConocoPhillips

5.4.5     ENI

5.4.6     ExxonMobil Corporation

5.4.7     Honeywell UOP

5.4.8     Neste Oil Corporation

5.4.9     Petrobras

5.4.10   Royal Dutch Shell

5.4.11   Total

5.4.12   Valero

6.     Market Forecasts

6.1   Key Assumptions

6.1.1     World Petroleum Demand

6.1.2     World Transportation Fuel Demand

6.1.3     Price of Oil

6.1.4     Biofuels at Crossroads

6.2   Biofuels Growth Projections

6.2.1     Biofuels Demand Projections

6.2.2     Biofuels Production Projections

6.2.2.1     Global Ethanol Growth Projections

6.2.2.2     Global Biodiesel Growth Projections

6.2.2.3     Advanced Biofuels Growth Projections

6.2.3     Feedstock Growth Projections

6.2.3.1     Ethanol Feedstocks

6.2.3.2     Biodiesel Feedstocks

6.2.3.3     Second, Third, and Fourth Generation Feedstocks

6.2.4     Global Trade in Biofuels Expected to Increase

6.3   Regional Biofuels Projections

6.3.1     North America

6.3.1.1     United States

6.3.1.2     Canada

6.3.2     Latin America

6.3.2.1     Brazil

6.3.2.2     Argentina

6.3.2.3     Rest of Latin America

6.3.3     Europe

6.3.3.1     EU-27

6.3.3.2     Rest of Europe

6.3.4     Asia Pacific

6.3.4.1     China

6.3.5     Middle East/Africa

7.     Company Directory
8.     Acronym and Abbreviation List
9.     Table of Contents
10.   Table of Charts and Figures
11.   Scope of Study, Sources and Methodology, Notes

List of Charts and Figures

• Biofuels Production by Region, World Markets: 2011-2021
• Biofuels Demand by Region, World Markets: 2011-2021
• Biofuels Growth by Fuel and Region, World Markets: 2011-2021
• Biofuels Production by Fuel, World Markets: 2000-2010
• Biofuels Market Share by Region, World Markets: 2010
• Top 10 Biofuels Producers by Country, World Markets: 2010
• Ethanol Production by Region, World Markets: 2000-2010
• Biodiesel Production by Region, World Markets: 2000-2010
• Snapshot of Fuel Cost Comparisons by Markets, World Markets: 2010
• Global Biofuels Market Share by Feedstock, World Markets: 2010
• Aviation Biofuels Demand by Region, World Markets: 2011-2021
• RFS2 Mandate, United States: 2009-2022
• Historic Retail Prices of Fuel by Blend, United States: 2000-2010
• Overall Average Fuel Prices on Energy-Equivalent Basis, United States: April 2011
• Historic Prices of Ethanol Feedstocks, World Markets: 2000-2010
• Historic Prices of Biodiesel Feedstocks, United States: 2000-2010
• Petroleum Demand by Region, World Markets: 2011-2021
• Transportation Fuel Demand by Region, World Markets: 2011-2021
• World Oil Prices (WTI): 1985-2030
• Biofuels Demand by Region, World Markets: 2011-2021
• Biofuels Production by Region, World Markets: 2011-2021
• Biofuels Production Growth by Region, World Markets: 2011-2021
• Ethanol Production by Region, World Markets: 2011-2021
• Biodiesel Production by Region, World Markets: 2011-2021
• Ethanol Production by Feedstock, World Markets: 2011-2021
• Biodiesel Production by Feedstock, World Markets: 2011-2021
• Biofuels Production by Country, North America: 2011-2021
• Biofuels Supply and Demand, United States: 2011-2021
• Biofuels Production by Country, Latin America: 2011-2021
• Biofuels Production by Fuel, Brazil: 2011-2021
• Biofuels Production, Europe: 2011-2021
• Biofuels Production by Country, EU-27: 2011-2021
• Ethanol Production by Country, Asia Pacific: 2011-2021
• Biodiesel Production by Country, Asia Pacific: 2011-2021
• Biofuels Production by Fuel, China: 2011-2021
• Biofuels Production by Fuel, Middle East/Africa: 2011-2021
• Incremental Oil Demand by Sector, World Markets: 2010-2030
• Price Volatility: 1983-2009
• GHG Emissions Profiles of Different Biofuel Pathways
• Snapshot of Biofuels Supply Chain
• United States Corn-to-Ethanol Complex: 2009
• Brazil Sugar-to-Ethanol Complex: 2009
• International Biofuels Trade Flows, World Markets: 2009
• E10 Market Penetration, United States: 2010
• E85 Vehicles in Operation, United States: 2009
• Snapshot Comparing Characteristics of Most Common Feedstocks
• Sales of Unconventional Light-Duty Vehicles by Fuel Type
• Cost of Different Biofuels Compared to Gasoline, Low-Cost Scenario
• Cost of Different Biofuels Compared to Gasoline, High-Cost Scenario
• Current and Emerging Biofuel Pathways
• Commercialization Status of Biofuel Technologies
• Key R&D Issues for Advanced Biofuels
• Illustration of Biorefinery Concept

List of Tables

• Pros and Cons of Biofuels
• Types of Biofuels
• Top Net Importers of Oil, World Markets: 2009
• Select Biofuel Blending Mandates and Targets by Country
• Biofuels Incentives, Subsidies, and Tariffs through the IRS, United States: 2011
• Biofuels Incentives, Subsidies, and Tariffs, EU-27: 2011
• Select Biofuels Incentives, Subsidies, and Tariffs, Brazil: 2011
• California LCFS Program Assessment of GHG Emissions from Light-Duty Vehicles
• California LCFS Program Assessment of GHG Emissions from Heavy-Duty Vehicles
• IPOs in the Biofuels Industry, United States: 2009-2011
• Integrated Biorefineries Receiving DOE Funds: November 2010
• BP’s Key Biofuels Investments
• Chevron’s Key Biofuels Investments
• CNPC’s Key Biofuels Investments
• ConocoPhillips’ Key Biofuels Investments
• ENI’s Key Biofuels Investments
• ExxonMobil’s Key Biofuels Investments
• Petrobras’ Key Biofuels Investments
• Shell’s Key Biofuels Investments
• Total’s Key Biofuels Investments
• Valero’s Key Biofuels Investments
• Aviation Biofuels Demand by Region, World Markets: 2011-2021
• Ethanol Production by Country, World Markets: 2000-2010
• Biodiesel Production by Country, World Markets: 2000-2010
• Biofuels Production Market Share by Region, World Markets: 2010
• Predominant Biofuel Feedstocks Utilized by Top 5 Producers, World Markets: 2010
• Top 10 Biofuels Producers by Country, World Markets: 2010
• World Oil Prices (WTI): 1985-2030
• Average Retail Price of Fuel by Region, World Markets: 2008
• Renewable Fuel Standard, United States: 2009-2022
• Historic Retail Prices for Fuels, United States: 2000-2010
• Snapshot Comparison of Price per Gallon: April 2011
• Overall Average Fuel Prices on Energy-Equivalent Basis: April 2011
• Historic Retail Prices for Fuels, United States: 2000-2010
• Historic Retail Prices for Biofuel Feedstocks: 2000-2010
• Transportation Fuel Demand by Region, World Markets: 2010-2021
• Motor Gasoline Demand by Region, World Markets: 2010-2021
• Diesel Fuel Demand by Region, World Markets: 2010-2021
• Mandated Biofuels Demand by Region, World Markets: 2010-2022
• Mandated Ethanol Demand by Region, World Markets: 2010-2021
• Mandated Biodiesel Demand by Region, World Markets: 2010-2021
• Biofuels Production by Region, World Markets: 2010-2022
• Ethanol Production by Region, World Markets: 2010-2021
• Biodiesel Production by Region, World Markets: 2010-2021
• Feedstock Market Share for Ethanol Production, World Markets: 2011-2021
• Feedstock Market Share for Biodiesel Production, World Markets: 2011-2021
• Biofuels Market Value by Region, World Markets: 2010-2021
• Biofuels Market Value by Fuel, World Markets: 2010-2021