First Research US Industry Profile

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Biofuel Manufacturing
SIC Codes: 2869
NAICS Codes: 325193
Last Quarterly Update: 5/27/2019
Companies in this industry produce ethyl alcohol, known as ethanol, and biodiesel fuel. Major biofuel manufacturers include Abengoa (Spain), Cosan (Brazil), Green Plains (US), Novozymes (Denmark), Poet (US), and Renewable Energy Group (US), as well as units of oil and gas producers such as Chevron and Valero and crop processors such as Archer Daniels Midland and Bunge (all based in the US).
Global sales of biofuels are about $170 billion and are expected to grow to about $250 billion by 2024, according to Transparency Market Research. The US, Brazil, Germany, Argentina, and China are the largest biofuel manufacturers. Factors influencing growth in the industry include government mandates and incentives, which in turn are driven largely by concerns about the environment, fossil fuel dependence, and waste management.
The US biofuel manufacturing industry includes about 220 establishments (single-location companies and units of multi-location companies) with combined annual revenue of about $31 billion.
Competitive Landscape
Demand is driven by motor vehicle use and government requirements that ethanol be blended into gasoline. The profitability of biofuel production facilities depends on prices of gasoline and diesel, which fluctuate based on world petroleum demand and domestic refinery use. Economies of scale in ethanol production are limited due to the transportation costs associated with gathering feedstocks (corn and other biomasses) and transporting the ethanol to blending sites. Small companies can compete effectively by developing business relations with distributors and by delivering consistently. The US industry is concentrated: the 50 largest companies generate more than 75% of revenue.
Ethanol imports account for about 2% of the US market and come mainly from Brazil, the second-largest producer of ethanol after the US. Ethanol exports, mainly to Brazil, Canada, and India, account for about 8% of US production.
New entrants join the biofuel manufacturing field regularly, and new technology breakthroughs are frequent. Federal and state government incentives keep barriers to entry relatively low. US biofuel production increased 5% between 2016 and 2017. The industry is composed of mainly of small producers that operate a single facility. Top producers may have a dozen or more production facilities.
Products, Operations & Technology
Ethanol makes up more than 90% of US biofuels production; biodiesel accounts for the remainder. ... plus:
Sales & Marketing
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Finance & Regulation
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Regional & International Issues
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Human Resources
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Historical Profiles (PDF format)

02/25/2019
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