A new report by Allied Market Research suggests that the global second generation biofuels (Advanced Biofuels) market would reach $23.9 billion by 2020, registering a compound annual growth rate (CAGR) of 49.4% during 2014 – 2020, Energy Daily reported.
Currently, biodiesel garners the largest market share; however, the latest and the most commercially viable cellulosic ethanol would surpass biodiesel and eventually lead the market by 2020. North America generated largest revenue, as it has over 50% of the globally installed capacity base.
Second generation biofuels are developed to overcome the limitations associated with traditional biofuels. Production of traditional biofuels faces barriers such as threat to biodiversity and food versus fuel issues.
On the other hand, second generation biofuels are produced from a range of non-food crops and waste biomass. Also, second generation biofuel production is more energy efficient than the conventional fossil fuels. Such biofuels minimize greenhouse gas (GHG) emissions by over 90%; thus, are more environment-friendly.
Currently, biodiesel is the highest produced second-generation biofuel; however, cellulosic ethanol would surpass it in the next couple of years. Ease of production of Cellulosic ethanol will be a principal driver that would contribute to the economies of scale.
Furthermore, the cellulosic ethanol market is forecast to grow at a CAGR 52.2% during 2014-2020, due to the rapid growth in technologies for mass production. Currently, North America accounts for about 82% of the global market share, as various market players prefer the United States for operating their pilot plants, chiefly due to supportive regulatory environment.
