The biofuels growth engine has stalled

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Current market is in gridlock, with governments flip-flopping on green targets

Investing in a policy-mandated market, you might think, should make for a comfortable ride. When customers are forced to buy one’s product, there should be easy money to be made. Yet, as the ructions in the European biofuels market show, that is not necessarily the case. Just listen to the sound of spluttering corporate engines.

Look at Sweden’s decision last year to row back on its ambitious sustainable fuel mandates in an effort to combat a cost of living crisis. That, thinks Irene Himona at Bernstein, lopped perhaps 1mn tonnes off a European biofuel market of 26mn tonnes — although part of the gap will be made up by demand growth elsewhere. Another concern is that European companies are not the only ones to have spotted an opportunity in biofuels. Chinese companies have jumped on the bandwagon.

Source: News Formal (newsformal.com)

 

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