The second generation biofuels market will reach $23.9 billion by 2020, growing at a CAGR of 49.4 percent during 2014 – 2020, according to a new report by Allied Market Research.
Currently, Biodiesel owns the largest market share, but by 2020 the recently developed Cellulosic ethanol is expected to surpass Biodiesel by leading the market.
Furthermore, the cellulosic ethanol market will grow at a CAGR 52.2 percent during 2014-2020, due to the rapid growth in technologies for mass production.
The key driving factor contributing to the growth of cellulosic ethanol is its easy production method.
North America, with 50 percent of the global installed capacity generated largest revenue for the forecasted period.
Moreover, North America accounts for about 82 percent of the global market share, as various market players prefer operating their pilot plants in US due to supportive regulatory environment.
The financial incentives and supportive regulations announced in U.S. and Europe are key factors in enhancing the commercial production and adoption of advanced biofuels.
Renewable Fuel Standards (RFS) launched in U.S is one such initiative.
Recently, Procter & Gamble announced a collaboration with DuPont to use cellulosic ethanol, replacing corn based ethanol in its Tide detergent in North America.
However, complexities associated with the production process, high initial capital investment and availability of land in the vicinity of the source of feedstock are the factors hindering the growth of the market.
Second generation biofuels have been supposed to exceed the quality limitations associated with regular biofuels like threat to biodiversity and food versus fuel issues.
On the other hand, second generation biofuels are produced from a range of non-food crops and waste biomass.
In addition, second generation biofuel production is more energy efficient, minimizing the greenhouse gas (GHG) emissions by over 90 percent.
Major players who recently started the production of cellulosic ethanol in North America are INEOS New Planet BioEnergy, Poet-DSM Advanced Biofuels LLC, Canergy LLC, Abengoa bioenergy, Amyris and Enerkem among few.
Sabeena Wahid
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