The excitement surrounding the biofuels market opportunity has been tempered somewhat by its many challenges, which include ethical questions of food versus fuel, limited availability of inexpensive feedstocks, petroleum price volatility, overcapacity of production and the global recession. However, a two recent reports from both Pike Research and Bio Economic Research Associates forecast that, despite these significant challenges, the combined biodiesel and ethanol markets will reach $247 billion in sales by 2020, up from just $76 billion in 2010. Total job creation, accounting for economic multiplier effects, could reach 123,000 in 2012, 383,000 in 2016, and 807,000 by 2022.
“In the near term, the biofuels market looks like a train wreck,” says managing director Clint Wheelock. “The economics of ethanol and biodiesel are not yet competitive with petro fuels, and governments have pulled back some of their support. However, in the 10 to 15 year timeframe, the outlook remains very positive. The long-term commitment of national governments to foster robust biofuels markets remains solid, and technological advances and economies of scale will dramatically improve the economics of biofuels versus petroleum.”
Pike Research’s report, “Biofuels Markets and Technologies”, anticipates three key waves of next generation biodiesel over the next several years. Fuels based on waste greases will hit the market first in 2010. Jatropha-based fuels will begin having a significant impact on the market in 2014. The third big wave will be algae-based biodiesel, which will achieve commercial availability in 2012 and will have a deeper effect on the market beginning in 2016.
A push for building advanced production of biofuels has the potential to create thousands of jobs, stimulate the stumbling economy and move the nation towards a more independent and secure energy future. A report released by Bio Economic Research Associates, titled U.S. Economic Impact of Advanced Biofuels Production: Perspectives to 2030, analyzed how growth of an advanced biofuels industry will impact four areas critical to U.S. economic recovery, including job creation, economic output, energy security and investment opportunity.
The report cited study results which showed that direct job creation from advanced biofuels production could reach 29,000 by 2012, rising to 94,000 by 2016 and 190,000 by 2022. Total job creation, accounting for economic multiplier effects, could reach 123,000 in 2012, 383,000 in 2016, and 807,000 by 2022. Investments in advanced biofuels processing plants alone would reach $3.2 billion in 2012, rising to $8.5 billion in 2016, and $12.2 billion by 2022. Cumulative investment in new processing facilities between 2009 and 2022 would total more than $95 billion. Direct economic output from the advanced biofuels industry, including capital investment, research and development, technology royalties, processing operations, feedstock production and biofuels distribution, is estimated to rise to $5.5 billion in 2012, reaching $17.4 billion in 2016, and $37 billion by 2022.
“The advanced biofuels industry could create 29,000 new jobs and create $5.5 billion in economic growth over the next three years, as companies continue to deploy the technology,” said Brent Erickson, executive vice president of the Biotechnology Industry Organization. “As the advanced biofuels industry grows to the levels established in the Renewable Fuel Standard, it will create more than 800,000 new jobs throughout the economy. These new jobs will be in sectors of the economy that have experienced the highest rates of job losses over the past year, including agriculture and construction.”