Business Week reports that investment in biofuels is up from $110.5 Million in 2005 to $740 Million in 2006, with $261 Million going to biodiesel producers. Biodiesel is particularly attractive over corn-based ethanol fuel as the price of corn is rising, concerns of emissions loom over ethanol use and biodiesel is easier to pipe than ethanol fuel.
However, biodiesel fuel is still more expensive to produce, and the already fuel price-shocked consumer market demand has not caught up with biodiesel’s potential. Add to that the fact that biodiesel producers currently vary in quantity produced and quality of biodiesel. For oil refiners to be motivated to buy-in to biodiesel, the industry is still waiting for increased production volumes and uniformity in quality standards. Perhaps 2007 will be a banner year for that.
