New global winners emerging in alternative fuels says Lux Research
Gasoline for the 21st century is gaining compettion. The picture of the old-style gasoline pumps from the GM Heritage Center in Sterling Heights, MI merely implies how long gasoline has been with us as a fuel source for autos; and, despite its high energy density, alternative fuels are beginning to grow, not only in America, but globally.
The new report, titled “Nations Race to Build Alternative Fuel Capacity,” is part of the Lux Research Alternative Fuels Intelligence service, with the report’s data driven by Lux’s Alternative Fuels Supply Tracker.
For the record, Lux analysts built a comprehensive database of over 1,200 alternative fuel production facilities throughout the world, and analyzed the dataset by geography, technology, feedstock, and fuel. It also analyzed 20 countries around the world on both eight short-term growth factors and nine long-term growth factors.
According to the latest news release from Lux Research, capacity for alternative fuels such as ethanol, biodiesel, and renewable diesel is at 44.6 billion gallons a year in 2011, but systemic hurdles will constrain their growth to under 5% annually through 2015. But pockets of promising growth still exist as variations in local policy, demand, and feedstock availability mean that new nations will arise as global hotspots in the constrained industry.
Most notable for investors is the release of the names of the nations contributing most to the growth. Lux Research reports that alternative fuels comprise 4.3% of petroleum capacity today, and countries like Thailand, Australia, and Sweden represent the best growth opportunities.
Specifically, ethanol capacity will grow to 35.1 billion gallons a year in 2015, and the best opportunities for ethanol growth are in Brazil, Australia, China, Sweden, and Thailand.
Biodiesel capacity growth follows close behind, reaching 15.8 billion gallons that same year, as France, Canada, Thailand, and Germany emerge as the best nations for biodiesel capacity opportunities.
According to the report titled, “Nations Race to Build Alternative Fuel Capacity,” all other alternative fuels – such as biobutanol, renewable gasoline, bio jet, and bio crude – will reach just 3.2 billion gallons total in 2015.
“However, the market is shifting to second generation fuels like renewable diesel and cellulosic ethanol. These fuels bypass the major logistical hurdles of first-gen alternative fuels, and investors, as well as governments, are realigning investment to grow capacity.”
Among Other Findings
- Focus on wastes. As concerns about food security grow, the alternative fuels industry begins a long march to utilize wastes. For example, the ethanol industry will seek to tap cellulosic feedstocks, especially in countries such as Sweden and Australia with ample agricultural and forestry wastes. The biodiesel industry will eye waste oils such as used cooking oil or brown grease in municipal wastewater.
- Ethanol growth likely to be capped. Beyond 2015, growing populations and food security threats will constrain the growth of ethanol and biodiesel, which today account for 97% of all biofuels. Along with downstream compatibility issues, these factors mean ethanol’s growth will be limited; it will cede ground to drop-in renewable gasoline and renewable diesel.
- Airlines pursue biofuels. Confronted with rising oil prices, the world’s airlines are pushing forward efforts to develop biojet fuel out of sheer self-interest. Earlier this year, United Airlines signed a letter of intent to purchase 20 million gallons of fuel a year from Solazyme, starting as early as 2014.
More About Lux Research
Lux Research provides strategic advice and on-going intelligence for emerging technologies. Leaders in business, finance and government rely on us to help them make informed strategic decisions. Through our unique research approach focused on primary research and our extensive global network, we deliver insight, connections and competitive advantage to our clients. Visit www.luxresearchinc.com for more information.
[Photo Source: Frank Sherosky]
About the Reporter: After 39 years in the auto industry as a design engineer, Frank Sherosky now trades stocks, futures and writes articles, books and ebooks like, "Perfecting Corporate Character," "Awaken Your Speculator Mind", and "Millennial World Order" via authorfrank.com. He may be contacted here by email: [email protected] and followed in Twitter under @Authorfranks
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