In Finland, Esa Sipilä, Principal at AFRY Management Consulting (ÅF Pöyry AB) recently gave a presentation at the Lignofuels 2020 conference in Helsinki about advanced biofuel markets and key drivers. In his presentation, Sipilä underlined that European regulations have created a very large market for advanced biofuels with significant supply limitations. According to Sipilä, lignocellulosic biofuel technologies are at the early stage of commercialization and still phasing “flagship challenges”.
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In addition, Sipilä stated that the advanced biofuels capacity from cellulosic feedstocks remains marginal while the hydrotreated vegetable oil (HVO) capacity is expected to double by 2025. The HVO industry has grown during the last decade and will continue to increase competition on sustainable lipid feedstocks such as used cooking oil (UCO) and other residual oils, fats and greases (FOG).
Although the market drivers are positive in the long-term, the bankability of advanced biofuels and bioproducts will remain challenging. In advanced ethanol production, only a few flagship projects have been built, facing major challenges in ramp-up, capacity utilization, and production economics. However, the hopes are high for the next wave of projects in the coming 5 years.
Lignocellulosic based biofuel projects are reaching investment decisions and new technologies have been tested in pilot plants. Biofuel policies have created specific demand for cellulosic biofuels, but today, cellulosic ethanol is directly supported in only a few countries. Cellulosic ethanol has separate markets and premium prices compared to conventional ethanol, said Esa Sipilä.
Esa Sipilä concluded that the advanced drop-in biofuels are getting a lot of attention as they lack the drawbacks related to the blend wall, lower energy content, and taxation. As the HVO feedstocks are increasingly limited, more lignocellulosic projects are needed throughout Europe.
Many lignocellulosic based drop-in fuel technologies are still developing, but the first projects are reaching investment decisions and have steel in the ground.
