The Digest’s 10 Top Advanced Bioeconomy Markets & Predictions for 2020

January 02, 2020

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by Jim Lane (Biofuels Digest) A mere “The Year in Rewind” as we sail into 2020? Not the good ship Digest! Instead, we dust off our crystal ball and offer our predictions for the year ahead. As the sunset of 2019 gives way to the dawn of 2020, once again roll the dice as we list the Digest’s 10 Top Advanced Bioeconomy Markets and Predictions for 2020. READ MORE

10. Low Carbon Fuel Standard expansion

After a couple of years of the COB (Califonia, Oregon, British Columbia) marker for low-carbon fuels, you’re going to hear about expanding the LCFS approach. Think Washington state, the Puget Sound, New York state, Canada-wide, a collective of states in the US Northeast, and even some new discussions across the US Midwest heartland. Discussions may not yet push a standard across the finish line, excepting Puget Sound which will likely adopt a standard and then get sued out of its mind by fossil fuel companies and the henchmen. The others we may well see advancing towards a finish line in 2021, with Canada in the first position there.

9. EU goes Advanced

First-gen has ruled in the EU for a long time in terms of fuels at deployment scale — but all that amazing EU technology, some impressive EU-based investment, and a new RED II that gives a big bonus for deploying advanced fuels will finally take advanced from avant-garde to everyday in the EU.

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8. CO2 Removal industry

We’ve been thinking about Carbon Capture and Sequestration , and Carbon Capture and Use — usually, making sure that we get a hold of new emissions from fossil fuels before they hit the atmosphere and cause big problems,. But what about all the existing Sky Carbon? That’s where Carbon Removal comes in, and it’s going to be important and big, because we are far past the point where all we have to do is amend our wicked wicked present and prevent a wicked wicked future.

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7. Plastics, baby

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6. Differentiated Protein — not just a plant burger, but a better burger

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Too many plant burgers have same-as, me-too formulations, and we suspect that the Impossible Burger 2.0 is having success because there’s more salt in the product, and possibly more sugar. We’ve been told that by people who know. Meanwhile, companies like Green Plains and Novozymes think there’s a great business opportunity in differentiated, advanced proteins — new, better ways to make proteins that are better for us.

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5. Tools for biological engineers

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4. Power-to-X

Power to X, that’s something most people haven’t yet heard of — it refers to the use of surplus power (think, extra solar or wind power) that we put to new purposes to store that energy rather than just stuffing it into a battery or using power to lift water to store the kinetic energy that will be released when the water tumbles over turbines at its original elevation. Instead, think using excess energy to split water, and store energy in hydrogen, for three vital and ready markets.

As Siemens puts it, Power-to-X describes methods for converting electrical energy into liquid or gaseous chemical energy sources through electrolysis and further synthesis processes. Using electrical current, water is split into oxygen and hydrogen – a 100% CO₂ emission-free process. Being a key technology for the energy transition, Hydrogen can be easily stored and further used or processed in many ways.

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3. Crop Tech breakthrough

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2. The Oil and Fuels Price Disconnect

We think that you’re going to see something interesting that we haven’t seen before. Generally, we’ve seen liquid fuel prices relating back entirely to petroleum prices and prosperity. When oil prices rose, fuel prices generally followed, and the only other significant lever was overall prosperity which could stimulate demand, strain refinery capacity especially in some niche markets, and there were instances of runaway prices from time to time in the past even when crude oil wasn’t going crazy.

That connection is starting to come under some pressure that may have reached a tipping point. For some time, renewables have been cutting into fossil fuel demand owing to policy support, but another policy support comes into play this year, relating more to low sulfur than low carbon.

Beginning this week, the International Maritime Organization (IMO) is set to enact Annex VI of the International Convention for the Prevention of Pollution from Ships (MARPOL Convention), which lowers the maximum sulfur content of marine fuel oil used in ocean-going vessels from 3.5% of weight to 0.5%.

Why important? The US Energy Information Administration projects that this regulation will encourage global refiners to increase refinery runs and maximize upgrading of high-sulfur heavy fuel oil into low-sulfur distillate fuel to create compliant bunker fuels. EIA forecasts that U.S. refinery runs will rise by 3% from 2019 to a record level of 17.5 million b/d in 2020, resulting in refinery utilization rates that average 93% in 2020. EIA expects one of the most significant effects of the regulation to be on diesel wholesale margins, which rise from an average of 45 cents per gallon in 2019 to a forecasted peak of 61 cents/gal in the first quarter of 2020 and an average of 57 cents/gal in 2020.

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That’s significant because we have an instance where the leading experts are predicting lower crude oil prices and no real positive change in global prosperity that might otherwise boost fuel prices, yet fuel prices are expected to rise.

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It might help forestall a traditional fossil energy playbook to a drive towards renewables, which is, a) announce some long-term projects in renewables that suggest oilcos are taking action and b) reducing fossil fuel prices and pain at the pump until no one cares about making a market for renewable alternatives.

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1. The Big Heavy (heavy transport)— Jet, heavy truck, marine, Part II

It was our #1 Prediction in 2019, the shift in focus to The Big Heavy – Jet, heavy truck, marine. And results in 2019 justified our faith, as projects sprang up all over, and new business models emerged in jet.

The Big Heavy is back because 2019 was just a curtain raiser.

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Last Years Predictions

From last year’s predictions, we scored a pretty respectable 8.5 out of 10.

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We only got a half point for three predictions — yes, India surged, and way more than China, but less than we had hoped. The Biomass Board’s Technical Advisory Committee named 2019 The Year of the Tree, so we got a half-point for pointing out that the wood basket would be hot in 2019, but we still see the pulp & paper giants finding all the usual reasons to avoid engagement until they run into too much financial ruin to play on the main stage. And we docked ourselves a half-point for tipping big progress on high-octane engines – yes, amazing work came out from the Co-Optima project but we haven’t seen as much interest in E25 and E30 as we expected. READ MORE

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Tags

Aviation Fuel/Sustainable Aviation Fuel (SAF) Investing environmental policy Transportation Fuels Policy LCFS (Low Carbon Fuel Standard) California Washington Oregon British Columbia BioChemicals/Renewable Chemicals bioeconomy bioproducts International Maritime Organization (IMO) Marine/Maritime Bio and Renewable/Sustainable Fuel (SMF) New York Canada European Union (EU) Renewable Energy Directive (RED/RED II/RED III) carbon capture and storage (CCS) carbon capture and utilization (CCU) bioplastics plastic carbon recycling recycled plastics protein synthetic biology Digital Biology microbiology energy storage Hydrogen/Renewable Hydrogen climate smart/conservation agriculture Agriculture fuel prices oil prices low sulfur marine fuel Jetfuel (Sustainable Aviation Fuel (SAF)) trucks India China trees High Octane Vehicles (HOV) High Octane Fuel (HOF) Engine/Fuel Co-optimization Department of Energy (DOE) E25 E30 E30 optimized BioRefineries/Renewable Fuel Production algae markets/sales market forces Sustainability

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