Accenture on Biofuels: "It Ain't Easy"

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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