USA Biofuels Industry is Booming
04.02.2024 By Tank Terminals - NEWS

April 02, 2024 [Rigzone]- The biofuels industry in the U.S. is booming.


That’s what Rystad Energy stated in a release sent to Rigzone recently, adding that a “fresh surge in production is just around the corner thanks to increased demand for renewable diesel and sustainable aviation fuels (SAFs) in the coming years”.

Rystad noted in the release that its research predicts biofuel production in the U.S. will increase by about 53 percent by the middle of next decade, “jumping from 850,000 barrels of oil equivalent per day (boepd) in 2023 to about 1.3 million boepd in 2035”.

“Domestic output is expected to surpass one million boepd as early as 2026,” the company added.

As governments and industry strive to decarbonize the transportation sector, the role of biofuels will continue to expand, Rystad noted in the release.

“Widely considered a core component of the energy transition, these plant-based alternatives to traditional fuels like gasoline and diesel could play a fundamental role in limiting emissions from road vehicles, shipping, and aviation,” the company said in the release.

“For instance, SAFs are almost identical to conventional jet fuel but produced using plant-based feedstocks like fats, oils, and agricultural and municipal waste,” it added.

“As their usage requires minimal aircraft and logistical modifications, SAFs could significantly reduce the aviation industry’s emissions impact,” it continued.

Focusing on 2035, Rystad said in the release that the U.S. is expected to dominate production of both ethanol and diesel, as well as advanced biofuels.

“The U.S. will produce about 1.3 million boepd of biofuels in 2035, 40 percent of the total global output,” it noted.

“Of that 1.3 million boepd, advanced fuels will account for about 50 percent of domestic production,” it continued.

Europe and Brazil will be the next biggest producers, but “significantly behind the U.S.”, according to Rystad. Europe is expected to produce about 580,000 boepd in 2035 and Brazil is expected to produce 510,000 boepd, Rystad outlined in the release.

“Biofuels look likely to play a crucial role in the future low-carbon energy world, and the U.S. is uniquely positioned to capitalize,” Artem Abramov, the head of clean tech research at Rystad Energy, said in the release.

“The market’s momentum has gathered in recent years, and its growth is assured through the end of this decade, but some uncertainty remains into the 2030s,” Abramov added.

Rystad highlighted in the release that its output forecast uses the company’s base case expectations for technology advancements, electric vehicle (EV) adoption, and the availability of biofuel feedstock, and said it assumes existing policy support remains in place.

The company pointed out that it has also mapped out two other scenarios – a high case and a low case. The high case assumes rapid technological advances, slower EV adoption, favorable biofuels policy, and ample feedstock availability, while the low case assumes slower technological development, faster EV adoption, reversed biofuel policy support, and feedstock supply challenges, the release outlined.

According to a chart included in the release, Rystad’s high case sees biofuel production above 1.6 million boepd in 2035 and its low case sees this output at around one million boepd in 2035. The chart showed that U.S. biofuel production was at around 600,000 boepd back in 2012. Rystad’s U.S. biofuel forecasts include ethanol, biodiesel, renewable diesel, and SAF, the chart revealed.

The Energy Institute’s (EI) latest statistical review of world energy, which was released last year, shows that the U.S. was the largest producer of biofuels in 2022, with 728,000 boepd. That figure represented a 6.3 percent year on year rise and 38.1 percent of total biofuel production in 2022, the review highlighted.

From 2012 to 2022, U.S. biofuel production has grown by an annual average of 3.2 percent, according to the review.

Brazil ranked second in terms of biofuel production in 2022, with 409,000 boepd, and Indonesia ranked third, with 174,000 boepd, the review showed. Brazil’s output represented 21.4 percent of total biofuel production in 2022, while Indonesia’s represented 9.1 percent, the review pointed out.

The EI’s biofuel production figures include biogasoline, such as ethanol, and biodiesel.


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