Cambridge, MA, USA — The biofuels market has struggled to get off the ground for a number of years with many startups languishing in the “Valley of Death.” But a study published by consulting firm Lux Research this week shows that all is not lost for the industry.
Lux says that globally, the biofuels industry is on track to grow 7.8% annually to reach a capacity of 53 billion gallons in 2015 and four forces will dominate the growth of the market.
The four forces that will drive the growth are government regulation, start-ups with technological innovation, large corporations and oil prices. According to Lux, it’s innovation, not mandates, that will be the main driver for biofuels going forward. Because ethanol, the dominant biofuel technology on the market today, is approaching its blend limit, Lux says that new technologies must come into play in order for the industry to grow.
Additionally, Lux believes that drop-in fuels will grow in popularity due to the fact that they can be easily integrated into existing infrastructure.