Biofuels executives increasingly bullish for industry growth in 2011; loan guarantees, renewable diesel gain popularity in Business Outlook survey

December 24, 2010 |

In Florida, Biofuels Digest reports that 80 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 11 percentage points in the past quarter.

The findings were among the highlights of the Winter 2010 Bioenergy Business Outlook Survey conducted by the publication in December, which drew response from companies representing an estimated 4,200 green jobs and more than $3 billion in annual sales.

Respondents said that they expected their companies to increase revenue individually over the next 12 months by an average of 233 percent, and to increase green jobs at their individual companies by 140 percent over the next 12 months. 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 64 percent over the next 12 months, up from 41 percent in the Fall Survey.

In finance, 38 percent reported that they had sought additional financing in the past 12 months and that 44 percent were unsuccessful in the effort, down from a 56 percent “unsuccessful” rate in the Fall Survey. 50 percent said that they would seek additional financing in the next 12 months, down from 70 percent in the Fall Survey. 71 percent said that they expected to see more completed IPOs in 2011 than 2010, and 76 percent said they expected more mergers and consolidations in 2011.

Government support and growth drivers

In commenting on support from their respective national governments, 78 percent rated their governments “highly” or “moderately” supportive of bioenergy (up from 60 percent in the Fall Survey), while 14 percent rated their governments “moderately” or “highly” unsupportive, with 10 percent opting for “neutral”.

Among the drivers for potential growth, respondents rated “rising demand for alternative fuels” as the most important driver of growth for their organizations over the next 12 months, with 51 percent identifying this as an important factor. 44 percent cited “new technology or intellectual property,” 44 percent cited “favorable government mandates, tax credits or tariffs” and 29 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, “Better loan guarantees” was rated as the measure that would create strong opportunities for industry revenue and job growth over the next 12 months, with 51 percent of respondents citing this as the top factor.

“New or extended production or investment tax credits” was cited by 49 percent, and increased grants, production subsidies or incentives” was named by 41 percent. Other factors cited by respondents included  carbon price legislation, blender pump mandates, more R&D spending, and increased tariffs. Only 7 percent opted for “Status quo – Everything staying as it is.” Interest in a carbon price fell from 40 percent in the Fall Survey.

Renewable diesel gains believers; cellulosic ethanol drops

Among fuel types, 70 percent predicted that renewable diesel would reach one billion gallons in global capacity by 2020, up from 55 percent in fall. 53 percent of respondents indicated that they expected Cellulosic ethanol to reach 1 billion gallons or more (3.8 billion liters or more) in global production volume by 2020, down from 66 percent.  40 percent opted for “military biofuels” hitting the billion gallon mark. 50 percent projected that 1 billion gallons of aviation biofuel would be produced in 2020, up from 37 percent in the Fall report, with 35 percent opting for algal biofuels, 20 percent for biobutanol, and 25 percent for renewable gasoline.

Summary details from the survey are available to Digest newsletter subscribers by clicking on the link in their newsletters, or by signing up for a free Digest subscription here. A detailed analysis of results, including breakdowns by region, company size, job title and industry sector, will be provided free to survey respondents.

The Digest’s Bioenergy Business Outlook survey is conducted four times per year.

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