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Summary:

The biofuels industry, once the poster child of the new energy economy and purported savior of the internal combustion engine, is again discovering that the road to global primacy is rougher than expected. According to a report released by Accenture entitled “Biofuels’ Time of Transition: Achieving […]

The biofuels industry, once the poster child of the new energy economy and purported savior of the internal combustion engine, is again discovering that the road to global primacy is rougher than expected. According to a report released by Accenture entitled “Biofuels’ Time of Transition: Achieving high performance in a world of increasing fuel diversity,” three main obstacles will hinder the sector’s growth: environmental issues, distribution and infrastructure shortcomings. These pesky inconveniences aside, Accenture estimates biofuels could make up 10-15 percent of the future fuels mix in the next 10-20 years.

However, that window of opportunity is quickly closing as competing technologies gain ground. The report says that existing biofuels will have to become as global and efficient as possible in the next decade lest algae and biotech-based fuels and electric vehicles supplant them. Despite all this, Accenture is certain that biofuels “will be here for the foreseeable future.”

This study is decidedly less optimistic than a similar report on the global biofuels market Accenture issued a year ago. At the time, the food-vs.-fuel debate was a murmur and the biggest barriers identified were scalability of feedstocks and the impact energy giants like China, India and Japan might have should they wade into the biofuel brouhaha. But a prescient senior executive in Accenture’s Energy industry group said then: “We believe that biofuels will experience a cycle similar to that of the Internet during the dot-com bubble.” Pop!

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  1. Environmental Capital – WSJ.com : Green Ink: Here Comes the Energy Plan Wednesday, September 10, 2008

    [...] Guardian. But biofuels aren’t going to be easy, according to a new report by Accenture, at Earth2Tech: Environmental worries and infrastructure woes especially will limit the sector’s growth. And [...]

  2. southstep’s me2DAY Wednesday, September 10, 2008

    southstep의 생각…

    Accenture on Biofuels: “It Ain’t Easy” « Earth2Tech…

  3. David E. Bruderly Wednesday, September 10, 2008

    Compressed natural gas is not only “easy, but less expensive if you have a pipeline nearby. And if you want to go cleaner than an NGV just add a little renewable hydrogen to the mix. Natural gas and hydrogen are proven off-the-shelf near-term solutions, no technology breakthroughs needed, only people willing to save money and reduce emissions.

  4. It’s important to recall that the dot-com bubble was predicated on a false assumption on customer acquisition costs in many business models. In the case of biofuels, by contrast, there is an assured customer, but it’s not clear that the technology is proven. Companies that succeed will grow; the rest will die. That’s not a dot-com style tragedy, that’s just how the system should work. That’s not worth any concern or heartache.

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