North American Outlook on Biofuels Challenges and Opportunities
Agriculture/Food Processing Residues nonfield crop, Aviation Fuel (Sustainable Aviation Fuel (SAF)), BioRefineries/Renewable Fuel Production, Business News/Analysis, California, Federal Regulation, Feedstocks, Field/Orchard/Plantation Crops/Residues, Forestry/Wood/Residues/Waste, Funding/Financing/Investing, Marketing/Market Forces and Sales, Methane/Biogas, Not Agriculture, Opinions, Policy, Sustainability
November 6, 2019
by Steve Hartig (Biofuels Digest) The North American biofuels market can be split into three main segments all of which have major dynamics. What I would like to do is give a high-level overview of what I see as some of both the challenges and opportunities across these.
- Ethanol which is a produced from corn and sorghum in about 200 plants mainly across the Midwest and blended at about 10% with gas. Majors such as POET, Green Plains, Flint Hills, Valero, ADM and Cargill do a bit more than half of the 16 billion gallons production with the rest done mainly by farmer co-op plants. An average plant size is about 80 mln gpy. About 10% of gasoline is ethanol. Cellulosic ethanol is the newer area which has had many challenges but companies such as POET DSM are producing some volumes from crop residues and LanzE15atech from gas streams.
- Biomass based diesel produced mainly from vegetable oils and waste fat in a large number of plants, typically rather small, across the US with the market leader being REG. Total volume sold in the US, per the EPA was 2.3 bin gallons, in 2018 or about 4-5% of the total diesel supply. Actual capacity is much larger at 4.1 bln gallons.
- Bio jet fuel which is still embryonic but an interesting are with about 25 bln gallons of potential. What is exciting is that this area is likely to grow in volume over time and alternative approaches such as electrification are difficult for aircraft given the weight of batteries so this is a long term and growing market for biofuels
Challenges for the corn ethanol and biodiesel producers are very much around profitability and the regulatory environment while the embryonic cellulosic and jet fuel areas still has many technical challenges to prove viability. READ MORE
