How the Biofuels Industry Can Go from Underdog to Golden Child--When the Innovators Stop Innovating: A Resolution for 2020

by Alison Matthews (Renewable Industries Canada/AOM Consulting/Biofuels Digest) ... A decade ago, ...Ethanol facilities were not even running at maximum capacity and governments were already doubling down on their success by creating funds to support “next generation” ethanol production.

And why not. For facilities facing the end of incentives and understanding the margins for ethanol are fickle, diversifying and collaborating was a natural next step to ensure long-term stability.

First, the conversation shifted. Biofuels evolved from being understood as primarily an agricultural and energy security issue to being considered an environmental issue first. As the public shifted their attention to climate change, so did government. Meaning that while biofuel producers continued to strive for more, faster, cheaper, cleaner, the public appetite – for better or worse – only cared about the cleaner.

Second, the competition got stiff. At the beginning of the decade, biofuels were the only market ready GHG reducing alternative to gasoline, pushing refiners for market share. While this is still true, the desire for more low-carbon transportation alternatives brought hydrogen, natural gas, and electric vehicles into the mainstream. This diversification brought with it more competition for government dollars and private investment.

Third, lightning didn’t strike twice. These great funds established to support the build out of next generation biofuels were met with disappointing results. In a classic case of putting the cart before the horse, technologies were not far enough along at the time to warrant the investment and the cost was far higher than anticipated. Government felt burned.

All these issues have combined to turn the biofuels industry from being the golden child to underdog, in under a decade.

After all, this is how the industry started – passionate, scrappy entrepreneurs with big ideas and the drive to make it happen. However, that motivation and energy seem to have gone dormant and replaced with a defensiveness that’s a product of an industry that’s been made to justify their place at every turn.

As a result, approaching many biofuel producers today with a new idea are no longer met with same enthusiasm of the 2010s, but with a closed door. Despite fantastic new innovations being declared every day, they always seem to be adjacent to the biofuels industry, not part of it. It is becoming clear that this isn’t just a margins issue, but a cultural one.

Government has become seemingly jaded in their appetite for the new. By edict or design they are unable to ‘pick winners’ and therefore limit their interest to data points – dismissing any project, no matter how innovative, if it doesn’t check their particular boxes.

In 2020, dedicate time to think big and innovate. Only an entrepreneur’s mindset can dedicate time to imagine the next evolution. Greet opportunities with enthusiasm instead of skepticism. Open up again to the risk and reward of challenging the status quo. READ MORE