Estimation of the Biofuels Industry Market Size 2020-2030

Biofuels no longer play a secondary role in the energy system.

Recent technological developments brought them to the forefront of the energy industry.

In about 10 to 15 years, they will complement fossil fuels in industrialized and emerging markets. 


In this post I would like to address the overall market potential of biofuels in the years to come. I will focus on the next 10 years, as I believe that it is harder to predict the market for just one year, and it is just as hard to predict where the market will be 10 – 20 years from now. We all make assumptions on what is now, and what is far in the future. This clouds our judgement on some occasions. But for a mid-range time period, we can make more accurate predictions where things are heading.

To illustrate, let us focus on each country, each major player in the biofuels sector. Different countries show different potentials for the development of their own biofuels sector. Overall, biofuels potential to world energy consumption cannot be overexaggerated. 


Biofuels can be generated from a wide variety of commodities. Each fuel has its own distinct advantages and disadvantages. But the most important aspect to consider is the exact location where biofuels are to be used, as well as latitude and water availability of the surrounding area. In Brazil – and – to a certain extend the United States biofuels can be generated from sugarcane. I have written an article on Brazil’s biofuels potential as a hotspot of sugarcane biofuels production and investment. In Brazil, sugarcane already covers a large swathes of land and it contributes significantly to overall transport fuel consumption.

Sugarcane is cut down and is transported by trucks to distillation facilities where the material is broken down biochemically and we are left with starch and the wooden shafts. This sugary liquid gives us ethanol. If you are exposed to the fermentation, you may get a bit tipsy standing next to the tanks. From time to time, workers will have to clean the tanks and you will have other tanks that you can use. Sugarcane consumes a lot of nutrients in its growth period. On the other hand, sugarcane is able to convert the sun’s energy into sugar. When it comes to converting the sun’s energy into sugar, sugarcane clearly tops the list of agricultural commodities.

Brazil’s main advantage is its location close to the equator as well as the amount of water that plants can be fed. Sugarcane can even be grown in the southern part of Brazil, which is a major plus because the majority of the population lives in the southern cone.

But transport is the big issue in Brazil: It costs a lot of money to transport sugarcane to the distillation plant which is often at a considerable distance. In terms of EROI (energy return-on-energy-invested) Brazilian sugarcane is not that high. Transport reduces the energy potential of sugarcane. Another problem is the road network in Brazil. The small roads snail along the hilly mountain ranges in the southeastern part of the country. That makes it more difficult to transport sugarcane. So Brazil’s infrastructure plays a role in all of this. If you want to learn more about Brazil’s energy policy in general, I have written an article on this.

Brazil’s overall land area is considerable. Although it must be said that the rainforest has been decimated by wildfires in the Amazon. A lot of the fires have happened along the southern edges of the Amazon rainforest, which is the area where land has been cleared for farming. The dryness is an issue, and 2,000 mm of water to mature fully, it leaves some doubt how sensible it would be to expand Brazil’s sugarcane industry.


In the last years, the United States has focused primarily on biofuels production from sugarcane. Some of the U.S.’s states have been pushing for more sugarcane, as sugarcane promises some lucrative business opportunities for farmers. The United States has great potential for biofuels made from sugarcane. But that potential mainly exists in the southern U.S. The further you go up, the harder it gets to grow sugarcane while still making a decent profit.

Various studies have been done on this subject matter and they came to the conclusion that in the United States, sugarcane competes with other agricultural crops such as wheat and corn that are used for human and animal consumption. So there are competing needs. With the continued growth of the shale oil and shale gas industry, there is less of a need now to switch to sugarcane production and biofuels. Assuming that the shale oil and shale gas industry will decline in the coming years, there will likely be a resurgence of interest in biofuels more generally and algae and sugarcane production more specifically.

The U.S. is also a leader in developing second generation biofuels. Algae fuel (biodiesel) is a promising new area that has opened up and I have written an article on this subject matter. Second generation biofuels are one of the most interesting areas of research and they bridge the gap between genetic engineering and the energy industry. The problem has always been how to make algae grow faster, multiply more often and fatten up quicker. The last bit is important. Only fattening does ensure that enough energy has been stored up by algae.

Let us now take a look at the overall potential of biofuels in the European Union. In the EU we are seeing some important changes to this sector.


Due to its northern latitude and harsh climate Europe cannot fall back on sugarcane as a crop to generate biofuels from. But there is continued interest in biofuels and that interest is coming from industry and the general population.

We have to keep in mind that biofuels are competing with conventional diesel and electric vehicles in the transport market. This is important because electric vehicles are heavily subsidized by states in the EU. I have previously written on this subject matter in an article on the development of East Germany’s automobile industry.

In the European Union and UK biofuels can be generated from three main sources, generally-speaking:

Rapeseed and sunflowers: Rapeseed has been a success story in Germany and for a long time has benefited from generous state subsidies. But this is no longer the case and production has been curtailed. Part of the reason is the belief that rapeseed destroys indigenous species of insects and flowers. Bees will target rapeseed flowers before they go hunting for something else, which means they will not go hunting for wild flowers in the forest. These flowers don’t get pollinated. Birds feed on insects, but when the rapeseed flowers disappear, the insects will have nothing to feed on and will have to find wild flowers (that have not been pollinated). So bees die off and birds starve. The same could be said of sunflowers. Sunflowers consume a lot of nutrients as well, which impoverishes the soil.

Wheat is not an ideal source of biofuels. It competes with human and animal consumption more generally.

Corn is not an ideal source either because it depletes the soil and leads to chemical imbalances. The land requires a lot of mineral fertilizers. You also have to rotate crops to avoid monocrops.


India’s untapped biomass potential: Enormous – to say the least. India, for the most part, is still an agrarian country, which means the biofuels industry has a lot of room to expand. In India, the biofuels industry is mostly oriented towards jatropha seeds to produce jatropha oil from, which is biodiesel. Due to size of India’s agricultural sector and the amount of people employed in it, the Indian government has decided to support the production of jatropha biodiesel.

India’s overall energy objective is to reduce its dependence on fuel imports, which is a sensible objective given its limited oil and natural gas reserves. I have written an article on India’s energy policy in South Asia and the Indian Ocean.


Russia is one of only a handful of nations worldwide whose energy policy does not rely on importing nations, which means Russia is self-sufficient in energy terms and completely energy-independent. That also means Russia does not need to rely on biomass as fuel. Commodity suppliers from Russia produce wood pellets to heat homes. That solution makes a lot of sense in decentralized locations of the country, but it also makes a lot of sense in places where cities are not sufficiently connected to the energy infrastructure. The heating network is not as widespread as would be needed to cover every locality.

Biomass provides an additional means to ensure energy delivery and safety. Wood pellets are also used in CHP plants to produce electricity and heat. Heat offtake is an important part of Russia’s energy infrastructure due to Russia’s northern latitude. I have also written multiple articles on Russian energy policy.

Many thanks for the shared interest in the energy world!

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