Advanced biofuels in US, Canada to surge to 1.6-2.6 billion gallons by 2015 amidst domestic manufacturing comeback

September 13, 2012 |

New downloadable reports from Environmental Entrepreneurs and PriceWaterhouseCoopers detail strong advances in advanced biofuels, chemicals, wood, plastic and rubber sectors.

In California, Environmental Entrepreneurs has just released its annual survey of advanced biofuels, the Advanced Biofuels Market Report for 2012, and is projecting that, for the US and Canada, advanced biofuels production (qualifying for RFS2 consideration) will increase to at least 1.6 billion gallons by 2015 and on the high end, this number could reach 2.6 billion gallons.

The group noted that “Requirements such as the RFS2 and LCFS, in concert with financial support from federal agencies like DOE and USDA are resulting in the construction or retrofit of 27 biorefineries by 2015. Fuel standards can be met by the capacity of these & existing facilities, but continued support of these government programs is crucial.”

At the same time, the report noted a challenging year for biofuels companies, but found that that 1,518 permanent, 6,965 construction and 9,924 indirect jobs could be created by 2015, and added that ” This number only scratches the surface, as it does not fully account for other jobs created within the biofuel value chain or corporate/R&D jobs.”

PwC points to “sustained manufacturing renaissance in the U.S.”

The report comes as PwC published a new report predicting a “sustained manufacturing renaissance in the U.S. beyond any cyclical recovery, potentially improving investment, employment, production output and research & development (R&D).”

While the PwC report nods to a consensus view that rising labor costs in China will drive manufacturing jobs to the US, PwC identified seven factors—transportation and energy costs; currency fluctuations; U.S. market demand; labor costs; U.S. talent; availability of capital; and the tax and regulatory climate—as the primary catalysts influencing manufacturers’ decisions to establish production facilities domestically and produce products closer to their major customer bases.”

“The reviving industrial manufacturing sector is instrumental to U.S. economic recovery,” said Bob McCutcheon, PwC’s U.S. Industrial Products leader.  “Beyond the cyclical rebound, however, a host of structural changes is emerging that may lead to the U.S. becoming an important location for basing production and R&D facilities for several industries.  In addition to trends in labor costs, other factors include the need to reduce transportation and energy costs; the emergence of the U.S. as a more attractive exporter and the relative attractiveness of the U.S. markets.”

US agriculture machinery, chemicals, wood, plastics and rubber production expected to surge

PwC pointed to agriculture machinery, chemicals, wood, plastics and rubber production among the primary expected beneficiaries of the resurgence, and tipped that “Industrial manufacturers may increasingly rethink their U.S. strategies, including the merits of continuing to separate production and R&D and producing abroad and importing back to U.S. buyers.  Depending on the industry, there may be considerable benefits to establishing regionalized supply chains and R&D facilities in the U.S., such as reducing costs, shortening lead times, protecting intellectual property and mitigating many of the risk factors inherent in developing markets.”

The Environmental Entrepreneurs report — authored by Mary Solecki and Bob Epstein of E2 and Anisa Dougherty at the Goldman School of Public Policy at the University of California, Berkeley — includes a generous data dump in its appendices, including federal and public funding for advanced biofuel projects, advanced biofuel facilities coming online in the United States and Canada before 2015, feedstock supplies for advanced biofuel production, enzyme and chemical supplies for advanced biofuel production, job data 2012-15, and advanced biodiesel facilities registered with RFS2. The report can be downloaded here.

The PwC report is authored by US industrial products leader Bob McCutcheon, and is available for download here.

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