HomeIndustry SectorsEnergy EfficiencyGovernment incentives boosting biofuels

Government incentives boosting biofuels

24 April 2012 – Government incentives and fuel demand are to boost bioethanol and biodiesel markets, according to a report by energy intelligence company GlobalData. This report finds that countries in Europe, Asia and North America show heavy involvement in biofuel production, displaying a global interest in the industry.

Bioethanol is produced from agricultural feedstock, and in 2011, coarse grains represented the most common raw material for bioethanol production, accounting for over a 50% share. Sugarcane, wheat, molasses, and sugar beet are also used. Global bioethanol production started in 2003, and grew at a significant rate up until the present, primarily due to government support in the form of subsidies.

Growth in the global bioethanol market has been driven in Canada by national targets, and in China by blending targets, highlighting the importance of government and environmental policy within the future biofuels market.

Global production of biodiesel began in 2005, and also grew at a very impressive speed, thanks to environmental concerns and rising energy security issues. Government subsidies will support future growth of the biodiesel market. The key global biodiesel exporters in 2010 were Germany, China, the Netherlands, Argentina, Belgium and the US. These countries boast considerable biodiesel production capacities, which they use to export biodiesel to other regions, displaying global demand for biofuels.

Global bioethanol production started in 2003 with 33,514 million litres, growing to 105,608 million litres by 2011 and is forecast to grow at a Compound Annual Growth Rate (CAGR) of 4.4% during 2011 to 2020 to reach 154,962 million litres in 2020. The global bioethanol trade increased from 1,257 million litres in 2006 to 1,754 million litres by 2010.

Global production of biodiesel started in 2005 with 4,854 million litres, growing to 23,579 million litres by 2011 at a CAGR of 30.1%.  Production is forecast to grow at a CAGR of 3.5% during 2011 to 2020, reaching 4,205 million litres in 2020. In 2010, the global biodiesel trade increased to 17,950 million litres from 14,927 million litres in 2009.