The United States leads the world in creating companies that turn food waste and non-food materials to energy, according to a Navigant Research report released Tuesday morning.
More than two-thirds of all global ventures in advanced biofuels are based in the United States, a testimony to the nation’s entrepreneurial environment and investment funding for new ventures.
Advanced biofuels, made from waste, algae and other non-edible organic substances, are being developed around the world as a possible alternative to fossil fuels.
Gulf Coast: Texas-based biofuels company plans expansion
Navigant analyzed the biofuel markets in six global regions — including 69 countries — based on private investment, government policies, the availability of feedstocks, the demand for liquid fuels and other factors. While high demand for liquid fuels and hefty investments pushed North America to the top of the ranking, Europe scored higher on policy-based market drivers.
“Higher average scores across Western Europe reflect aggressive mandates currently in place among national governments across the region, as well as a strong commitment to sustainability and investment in innovation,” the report stated.
A lack of infrastructure and financial resources put the Middle East/Africa region at the bottom of the ranking.
Navigant forecasts global growth in the biofuel industry will slow through 2015, as government investment and new infrastructure moderates from recent peaks. Still, the research firm expects another round of rapid growth of advanced biorefinery capacity will occur between 2015 and 2018, as existing facilities are expanded and retrofitted.
In the United States, advanced biofuels have struggled to reach economic viability and have fallen short of federally mandated production targets.
Supporters hope that advanced biofuels could reduce the pressure on the world’s food supply from traditional biofuels made from corn, sugar cane or other food crops. Conventional biofuels, produced from corn, sugarcane and other food-based crops, make up about 5 percent of the liquid fuels used for transportation worldwide, according to Navigant.
For now, though, the oil industry is pushing Congress to reduce target amounts of renewables that federal law requires in the fuel supply, saying biofuel makers don’t produce enough to make the mandates realistic.
The U.S. advanced biofuels market has benefited from relatively high investment and good access to needed raw materials such as wood scraps. In Western Europe, investors have been more hesitant and source supplies are scarcer, but there is great market demand for the finished products, driven by an aggressive European Union target of 20 percent renewable energy by 2020, including 10 percent renewable transportation fuel.
But demand for such products as aviation biofuels and biochemicals must increase for the advanced biofuels industry to scale-up operations in the United States, Navigant said.
The Environmental Protection Agency has ordered industry to blend 16.55 billion gallons of biofuels into the nation’s fuel supply this year, including the corn-based ethanol that is the most common biofuel in U.S. gasoline. But it reduced mandates for certain kinds of non-food-based biofuels, acknowledging that production has yet to ramp up to once expected levels.
Also on FuelFix: