Global biofuels capacity will grow to 61 billion gallons per year (BGY) in 2018, up from 55.1 BGY in 2014, according to Lux Research.

Ethanol and biodiesel will continue to dominate with 96% of the capacity in 2018, but novel fuels and novel feedstocks will be major drivers of capacity growth.

Novel fuels and novel feedstocks will grow at a rapid 27% and 16% compound annual growth rate (CAGR), respectively, through 2018.

Ethanol and biodiesel will grow at a slower 2% rate but will reach capacities of 40 BGY and 19 BGY, respectively.

‘While ethanol and biodiesel dominate global biofuel capacity today, limits on their growth mean that novel fuels like renewable diesel, bio jet fuel, and biocrude are crucial to the future of the industry,’ says Victor Oh, Lux Research associate and lead author of the report.

‘Producers also need to tap into novel feedstocks like waste oils, non-edible biomass, and municipal solid waste to push the industry beyond food-vs.-fuels competition,’ he adds.

Lux Research analysts studied growth of biofuels utilizing an alternative fuels database of over 1,800 production facilities globally.

Among their findings: