First Research US Industry Profile

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Biofuel Manufacturing
SIC Codes: 2869
NAICS Codes: 325193
Last Quarterly Update: 5/2/2022
Companies in this industry produce ethyl alcohol, known as ethanol, and biodiesel fuel. Major biofuel manufacturers include Green Plains, Poet, and Renewable Energy Group (all based in the US), along with Abengoa (Spain), Cosan (Brazil), and Novozymes (Denmark); as well as units of oil and gas producers such as Chevron and Valero, and crop processors such as Archer Daniels Midland and Bunge.
The global sales of biofuels are about $140 billion and are expected to grow to about $155 billion by 2024, according to Statista. The US was ranked as the largest biofuel producing company in 2018, followed by Brazil and Indonesia. 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 200 establishments (single-location companies and units of multi-location companies) with combined annual revenue of about $30 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 highly concentrated: the 50 largest companies generate more than 85% 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 decreased 2% from March to May, 2020 compared with 2019 due to COVID-19 pandemic. 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
Fuel ethanol and other biodiesel fuels account for over 70% of the US industry revenue; other products include distillers' dried grains and dried solubles ... plus:
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Finance & Regulation
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Regional & International Issues
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