The recent OECD-FAO Agricultural Outlook 2014 report claims biofuels growth will slow down by the year 2023.
According to the report, it should be expected ethanol and biodiesel output to reach 158 billion litres and 40 billion litres respectively by 2023.
The report starts with a quite broad view on the market: “The year 2013 was marked by several policy decisions that have strongly influenced the market environment for biofuels. The European Union put in place trade measures against imports of biofuels from Argentina, Indonesia and the United States. There were also proposals towards lower first generation biofuels targets for 2020 in the European Renewable Energy Directive (RED). In Brazil, the ethanol blending requirement was raised to 25% for low blends. At the same time, artificially lower domestic petrol prices in Brazil had some impacts on the use of high blends of ethanol. In Argentina and Indonesia, domestic biodiesel mandates were increased – partly in response to European anti-dumping measures. And for the first time, the EPA made proposals to reduce the total,advanced and cellulosic biofuel mandates for 2014.”
Some interesting parts:
“Global ethanol and biodiesel production are both expected to expand to reach, respectively, 158 bln L and 40 bln L by 2023. Ethanol and biodiesel will continue to be mostly produced from feedstocks that can also be used for food. By 2023, 12%, 28% and 14% of world coarse grains, sugar cane, and vegetable oil production, respectively, are expected to be used to produce biofuels.”
Ethanol use in the US
“Ethanol use in the United States will be limited by the ethanol blend wall4 and should only grow marginally in the latter years of the projection period, leaving additional biodiesel use necessary to meet the advanced and total mandates. The policy driven imports of sugarcane based ethanol to fill the advanced gaps are also expected to flatten at the end of the next decade to reach 10 bln L by 2023. It is assumed that by 2023 only 12% of the US cellulosic mandate will be implemented.”
For the European Union, the Outlook assumes that the fulfilment percentage of the RED coming from biofuels should reach 8.5% in 2020.5 Biodiesel use is expected to increase in the first part of the projection period and then to stay at a plateau of 19 bln L from 2020 onwards. The increase in production of second generation biofuel will remain very limited. Imports will be necessary to satisfy the RED target.”
Original article here.