World Biofuels Markets: 2008 gloom starts to lift

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Delegates, speakers and exhibitors at the World Biofuels Markets conference in Brussels in February 2009 were putting on a brave face about their prospects for the future, following a year in which the falling price of oil, European concerns over sustainability of biodiesel and bioethanol, and the credit crunch had knocked the industry’s confidence – there had even been fears the industry would be killed off completely.

While keynote speaker Lord John Browne (former CEO of BP and now MD or private equity firm Riverstone Holdings) spoke of 2008 as a “perfect storm”, he pointed to the Obama regime’s commitment to green technologies, and the industry’s rapid pace of innovation as reasons to be cheerful.

Biofuel industry factionalism?

Browne warned of the need for effective communications of the industry’s role, and the dangers of factionalism within the biofuels industry, for instance between competing fuel feedstock lobbies, or conversion technologies (such as thermochemical and biochemical).

Yet these stresses are symptoms of a maturing market in which commercial forces shape the direction of development: the industry must find the most efficient and appropriate feedstocks, conversion technologies and fuels – and proponents must use the mechanisms of intervention to help them develop, if the biofuels industry is ultimately to make a significant contribution to the world’s energy requirements. Progress tends to happen fastest in a competitive environment.

Browne and the whole biofuels industry know that biofuels form only a part of the transport energy mix, and more importantly, perhaps, only a part of the renewable energy industry mix. But their production has an impact way beyond its pure energy significance, because of the powerful link with the agriculture sector and land use generally. Another keynote speaker at the conference, Sir Bob Geldof the political activist, made these points forcefully in his address. Geldof said he feared the slippage of biofuels down the political agenda, and governments’ “inordinate faith” in second-generation lignocellulosic biofuel research and development, before reminding delegates of the potential for biofuels from raising of agricultural productivity in Africa and elsewhere.

On the exhibition floor, and in the conference sessions, there was a fascinating mix of battle-scarred biodiesel and bioethanol industry players – a well-developed ecosystem – and those focused on lignocellulosic and algal biofuel companies, generally more optimistic, and keen to describe the advantages and potential of their technologies.

Overall, World Biofuels Markets 2009 showed an industry recovering some confidence but still concerned for its future: those with the confidence to adapt to political, market and technological change still have much to look forward to.