Producers and analysts see the US biodiesel industry going through a wave of consolidation by 2010, according to ICIS News Service.
Although there will be a regional role for small and mid-sized commercial plants producing under 35 million gallons a year, larger operations near major ports will come to dominate.
Industry analyst Will Thurmond expects the largest first generation plants to survive – those that can adapt to changes in feedstocks, government policies and technology.
The imminent second generation of plants, he says, will be up to a hundred times larger than some current refineries. Examples include the 175 million gallon per year Tyson-Conoco diesel plant in Texas and the 250 million gallon a year Neste Oil biodiesel plant in Singapore.
The next generation of plants will be able to run on a variety of feedstocks, have vertically integrated processing units and will be much closer to deep sea ports.
"They can produce in large volumes and take advantage of import/export, so they’re not vulnerable to soybean prices in the US," he said.
Although many regional refineries won’t survive, those that can use cheap animal fat feedstock or can wait for for inexpensive feedstocks like jatropha, could survive.
Smaller players in the midwest are already dropping out – the victim of spiking soybean oil prices, which have jumped 86% since last year.
A small number of companies like GreenHunter Energy are building new, large-scale production plants near ports or merging to form bigger entities.
Read the ICIS article:
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