Global Biofuels Blog

This week we will release our annual supply and demand projections for biofuels globally, our Global Biofuels Outlook study, which we have done as a group for the last four years.  Some of the great surprises for me revealed from our analyses were:

• The growth that we can still expect in the conventional biofuels arena driven primarily by mandates that currently being implemented around the world - demand for biofuels is going to double over the study time period (2009-2015);
• Asia-Pacific ethanol production will grow tremendously in the coming years and could represent as much as 20% of global ethanol production by 2015;
• Of note, if India’s own projections were realized, it could outpace Brazil in ethanol production and exporting by 2015. Nonetheless, despite India’s ethanol production expansion Hart projects that Brazil will remain the leading global biofuels exporter;
• The U.S. will have to rely on increasing volumes of Brazilian ethanol to meet current targets established by the federal RFS2 (advanced biofuels) and California Low Carbon Fuels Standard (LCFS), but could be in a position to export corn-based ethanol by 2015.

For more information about our study, see http://www.globalbiofuelscenter.com/Spotlight.aspx?Id=32.

Late last week, Waste Management announced it was joining Valero in investing in Terrabon, a company commercializing a technology to produce biocrude from waste using its MixAlco^TM technology. MixAlco is an acid fermentation process that converts biomass into organic salts. The resulting non-hazardous organic salts, or bio-crude, would be then shipped by truck, rail or pipeline to a Valero refinery or other centralized processing facility where it would be converted to a high-octane gasoline that can be blended directly into a refiner’s fuel pool and presumably would qualify as an advanced biofuel under the Renewable Fuels Standard (RFS2) program.

Assuming the process is commercially scalable, it could be an interesting win-win-win: Waste Management would probably get carbon credits under a looming cap and trade scheme; Valero gets an advanced biofuel that it can process and blend directly into the gasoline pool, avoiding some of the logistics issues blending ethanol can present, capturing an opportunity to sell valuable advanced biofuel renewable identification numbers (RINs) on the market and allowing it to more easily meet Low Carbon Fuels Standard (LCFS) obligations; Terrabon gets rich.  There would be no food v. fuel issues, sustainability concerns or complicated lifecycle analyses on land use change (LUC) with which to contend.  The very fact that there wouldn’t be LUC issues makes the product especially attractive.  Is waste where it’s at?