Biofuels industry increasingly bullish about 2011; cite "rising demand for alternative fuels" in Business Outlook Survey

March 14, 2011 |

Industry execs predict 44 percent growth in biofuels revenue in 2011, 25 percent jobs increase; more seeking finance.

In Florida, Biofuels Digest reports that 85 percent of bioenergy executives are more optimistic both about their organization’s prospects for growth and industry growth, than 12 months ago, and that confidence about industry growth prospects has jumped 5 percentage points in the past quarter, and 15 percent in the past 6 months.

The findings were among the highlights of the Spring 2011 Bioenergy Business Outlook Survey conducted by the publication and co-sponsored by the Biotechnology Industry Organization (BIO). The quarterly survey drew responses from 746 Digest subscribers.

Respondents said that they expected their companies to increase revenue individually over the next 12 months by an average of 107 percent, down from 233 percent in the Winter 2010 survey, and to increase green jobs at their individual companies by 25 percent over the next 12 months, down from 140 percent in the Winter Survey. This compared to revenue growth expectations of 140 percent and job growth of 68 percent in the Fall survey.

Industry growth and financing

Respondents said that they expected industry revenue to grow by 44 percent in the next 12 months, down from 64 percent compared to the Winter survey, but up from 41 percent in the Fall Survey.

In money matters, 53 percent reported that they had sought additional finance in the past 12 months, up from 38 percent,  and that 40 percent were unsuccessful in the effort, down from a 44 percent rate in the Winter survey and 56 percent “unsuccessful” rate in the Fall Survey. 54 percent said that they would seek additional financing in the next 12 months, up from 50 percent in the Winter survey. 72 percent said that they expected to see more completed IPOs in 2011 than 2010, and 70 percent said they expected more mergers and consolidations in 2011.

Government support and growth drivers

In commenting on support from their respective national governments, 67 percent rated their governments “highly” or “moderately” supportive of bioenergy (up from 78 percent in the Winter Survey).

Among the drivers for potential growth, 48 percent of respondents rated “rising demand for alternative fuels” and “new technology or intellectual property,” as the most important driver of growth for their organizations over the next 12 months. 41 percent cited new partners, 39 percent cited “favorable government mandates, tax credits or tariffs” and 37 percent cited “new finance”.

Other factors cited included grants, subsidies, new partners, new production capacity, more aggressive marketing and other factors.

Among government policies favored by respondents, “Fuel, feedstock or technology neutrality in legislation” was rated as the measure that would create strong opportunities for industry revenue and job growth over the next 12 months, with 43 percent of respondents citing this as the top factor.

“Better loan guarantees”  was cited by 41 percent, while 35 percent cited “increased grants, production subsidies or incentives” and “carbon price legislation.” Other factors cited by respondents included  blender pump mandates, more R&D spending, and increased tariffs. Only 2 percent opted for “Status quo – Everything staying as it is.”

Renewable diesel tops poll as “fastest growing advanced biofuel”; cellulosic ethanol rebounds

Among fuel types, 67 percent predicted that renewable diesel would reach one billion gallons in global capacity by 2020, down from 70 percent in the Winter survey but up from 55 percent in fall. 67 percent cited cellulosic ethanol, up sharply from 53 percent in Winter.  51 percent opted for aviation biofuels and 49 percent for military biofuels.

The Bioenergy Business Outlook Survey is conducted four times a year, and is co-sponsored by Biofuels Digest, and the Biotechnology Industry Organization (BIO).

Complete survey results can be downloaded here. A detailed analysis of results will be available next week for survey respondents.

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