Converting biomass into fuels, energy, and chemicals has the potential to generate upwards of $230 billion to the global economy by 2020,
The report–produced in collaboration with Royal DSM N.V., Novozymes
(NVZ.L), DuPont (NYSE:DD) and Braskem (BRD.DE), finds that the majority
of that revenue will be in the U.S.
Today, the biorefinery industry is in early development, however, according to the WEF report, governments and businesses across a range of sectors are recognizing the potential economic boom that exists in biorefining. For example, by the year 2020:
- The biofuels market alone is estimated to more than triple by 2020, with combined sales of $95 billion
- The demand for biomass to generate heat and power is expected to more than double
- Bio-based products will accumulate $15 billion in revenues
- Bio-based chemicals are expected to grow significantly and increase its share in overall chemicals production to an estimated nine percent of all chemicals
- Production of biomass within the farm gate is estimated at $90 billion—the largest business potential in the value chain
The report identifies a number of technical, strategic and commercial
challenges that need to be addressed before any large-scale
commercialization of the biorefining industry can succeed. These include
the need for significant advances in the development and deployment of
bio-based technologies, infrastructure development, high capital costs
and the issue of restricted land and biomass availability.
Biorefineries using biomass (plant/vegetable-based material) as
feedstock would create a transition from fossil carbon to more
sustainable bio-based production, says the report. This could
fundamentally reshape the industrial landscape.
According to data provided by the Biotechnology Industry Organization (BIO), today’s developing biorefinery industry accounts for more than 40,000 jobs in the U.S. Commercialization of cellulosic biofuels is expected to create 800,000 new clean energy jobs (190,000 direct new green jobs, and 610,000 indirect new jobs) in the U.S. by 2022 alone. Achieving the biorefining industry’s full potential could create tens of thousands more new jobs within the next five years.
Steen Riisgaard, President and CEO, Novozymes, adds: “Over time, our cars, our trucks, even our airplanes are going to run on low-carbon fuels derived from starch and cellulose. Plastics and chemicals will be made from plants rather than petroleum. Millions of new green tech jobs will be created in rural areas and in biorefineries, producing bioenergy and biomaterials.”
Bernardo Gradin, CEO, Braskem says, “Biorefineries offer a new trail to Advanced Manufacturing–a third industrial revolution with new rural and geographical winners and a move towards a bio-based, lower CO2 emissions society. Braskem will open her first by October of this year.”
The report concludes that the development of the bio-based economy is at an early and high-risk stage and no single industry, or company, is cable of managing this phase of its development independently. Government, therefore, has a key role to play in providing seed support–particularly at the pre-competitive stage–to the emerging bio-based sector and creating the market to ensure that it becomes established and successful as quickly as possible.
Major oil companies have begun placing their bets on advanced biofuel companies in the last couple years. Earlier this month Total (NYSE: TOT; TOTF.PA) purchased a 17% stake in Amyris, following an earlier investment in Coskata.
Royal Dutch Shelll (NYSE: RDSA) has invested in Iogen, Codexis and a Brazilian joint venture with Cosan S.A. (CSAN3.BR). BP (NYSE: BP) has investments in Verenium and Qteros. And ExxonMobil (NYSE: XOM) is looking further down the development path to third-generation synthetic and algae-based fuels by investing $600 million in research led by Synthetic Genomics.
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