Frost & Sullivan, a company that offers strategic analysis of the global automotive biofuels market, have determined that backward integration of automotive biofuels is necessary for manufacturers of biofuels.
Due to the increasing number of sales of commercial and passenger vehicles, there is projected to be a major increase in consumption of automotive biofuels. Also contributing to this increase is the enforcement of biofuel percentage blend mandates.
Although the United States remains the primary producer of automotive ethanol, they have not yet been able to reach their potential due to the increasing number of fuel efficient vehicles.
In order for biofuel manufacturers to maintain profits, they will need to need to gain access to competitively-priced feedstock. Likewise, producers of biodiesel are forced to look for lower-cost alternatives to fight increasing production costs.
There are a couple of other challenges that vendors face. Many consumer believe biofuels may cause damage to their vehicles. Along with that, there seems to be no financial incentive for buyer to use biofuels due to the price reduction of fossil fuels.
Frost & Sullivan continue to analyze data regarding automotive biofuels.