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Different forces carry different impacts but innovation is key for growth in biofuels through 2015, according to the research firm.
Cambridge, MA, USA — The biofuels market has struggled to get off the ground for a number of years with many startups languishing in the valley of death if not succumbing to it completely. But a study published by consulting firm Lux Research this week shows that despite the fact that biofuel capacity represents only 3% of the petroleum fuels it seeks to replace, all is not lost for the industry.
Lux says that globally, the biofuels industry is on track to grow 7.8% annually to reach a capacity of 53 billion gallons in 2015 and four forces will dominate the growth of the market.
The four forces that will drive the growth are government regulation, start-ups with technological innovation, large corporations and oil prices. According to Lux, it’s innovation, not mandates, that will be the main driver for biofuels going forward. Because ethanol, the dominant biofuel technology on the market today, is approaching its blend limit, Lux says that new technologies must come into play in order for the industry to grow. “Such innovations will lead to cost parity with petroleum and feedstock flexibility, two essentials for biofuels to surpass the 8% growth it experiences today,’ said the firm.
Additionally, Lux believes that drop-in fuels will grow in popularity due to the fact that they can be easily integrated into existing infrastructure.
Sceptre Group Limited is a specialist investment firm focused in low carbon financial investments such as sustainable biofuel plantations, agricultural farmland and green technologies. For more information on Biofuel Investments, please visit Sceptre Group’s website at www.sceptreinternational.com.