Advanced biofuels and renewable fuels will take the lead over traditional biofuels in the next few years, according to a new study.
A new Lux Research study sees first- and second-generation biofuels like ethanol and traditional biodiesel bowing out to newer low-carbon fuels, which will present more clean fuel options for transportation. The study predicts advanced biofuels will nearly double in five years to 9.6 billion gallons per year.
Biodiesel is projected in the study to lose 26 percent market share by 2022 due to the rapid growth of low-carbon and high-performance drop-in biofuels such as renewable diesel.
Traditional biofuels will see reduced production as facilities scale up to commercial-grade using non-food feedstocks and producing novel fuels. The new plants will account for over half of new capacity deployment for the first time in the biofuel industry’s history, according to Lux Research.
New technologies are making it all possible. Lux reports that emerging thermochemical and catalytic technologies will win out over traditional bioconversion processes. Thermochemical and catalytic technologies will make up over half of the new capacity deployment for the first time in the biofuel industry’s history, the study predicts.
The production process will slow down, though. The study forecasts that overall output will grow at a slower pace to 67 billion gallons a year (BGY) in 2022, from 59 BGY in 2016.
Advanced Biofuels Association and other industry groups will likely be thrilled to see the study’s findings. ABA advocates for these types of fuels coming from renewable sources like plants, algae, cellulosic ethanol, waste, animal fats, and other forms of biomass – not petroleum or fossil fuels. The association lists several clean vehicle fuels produced by member companies including biodiesel from renewable feedstocks, biogas, butanol, methanol and isobutulene blends, and renewable jet fuels.
These advanced biofuels appear to be on the path to commercial production-scale viability, as opposed to previous versions stalling out in test labs and losing funding support.
“A new era of technology commercialization has brought the global biofuels industry to the cusp of a tipping point, as new facilities target low-carbon and high-performance drop-in biofuels,” said Runeel Daliah, Lux Research associate and lead author of the report.
“With many of the technologies capable of producing advanced biofuels still at demonstration scale, the next five years will be critical as companies raise capital, establish value chain security and produce commercial volumes as these projects come online,” he said.
Lux Research analysts conducted the study by tapping into information on commercial deployment of new technologies in the global biofuels industry using a database of nearly 2,000 facilities from 1,461 companies in 90 countries.
Lux Research sees low carbon fuel standards taking the lead over federal biofuel blend standards such as E10 ethanol gasoline and B20 biofuel diesel. Advanced biofuels and renewable fuels like renewable diesel and renewable natural gas can tap into incentives California, Oregon, and more recently, Canada, are offering through low carbon fuel standards. These governments aren’t that concerned with where the fuel comes from as long as it uses a fuel’s carbon intensity as the benchmark.
A Lux study published in December calls it “technology-agnostic carbon intensity metrics.”
Renewable diesel and conventional electricity will be the near-term winners in low-carbon transportation fuels according to the December report, followed by renewable electricity in a close third.
Environmental groups and university research centers tend to encourage consumers to make sure that their electric vehicles are powered by renewable energy, such as wind and solar, over conventional electricity powered by coal, natural gas, nuclear, and petroleum.