Biofuels market regains momentum

The biofuels market, which has been deeply affected both by the global economic downturn, and high prices of feedstocks used to produce biofuels, is showing a return to stability. Recent joint ventures, such as Royal Dutch Shell PLC’s agreement with Cosan, the Brazilian ethanol producer, indicate new interest in the field of biofuels. An international concern about greenhouse gas emissions, rising fuel costs and the unrest in the Middle East make an investment in biofuels viable. The biofuels industry received more than US$650 million in venture capital in 2010. Shell stated that biofuels could be 20% of the transportation fuel market by 2040. However, most energy companies remain cautious about the future growth of the importance of biofuels and in particular, innovative fuel programs, such as producing diesel fuel from algae. Mark Williams, Shell’s director of downstream products, said that there is the “difficulty of taking these advanced biofuels to anything of scale.” (April 8, 2011)