 U.S. Biobased Products Market Potential and Projections Through 2025Office of Energy Policy and New Uses, Office of the Chief Economist No 329778, USDA Miscellaneous from United States Department of Agriculture Abstract: This study is based upon data and assumptions as of 2006 which are not reflective of recent market developments. These assumptions were used to identify the market potential for biobased products - their production volumes and applications - through the year 2025. Market penetration was assessed based on information available through April 2006 and benchmark assumptions with respect to factors such as policy, biobased feedstock prices, and energy prices. Recent results of the benchmark assumptions have not materialized; corn prices have increased, the market prices for biofuels are lower, and the infrastructure costs continue to increase. If such trends that lead to low profit margins continue there will be a slowing effect on the biofuels industry. With the dynamic nature of the biobased industry affecting short term developments, the long term trends toward 2025 could vary widely based upon future policy, research, and market developments. Development of the biobased products industry can be expected to spur increased investment in processing and manufacturing facilities in rural America. This investment will both expand employment opportunities for rural residents and spur demand for farm products. Substantial growth is to be expected, especially in a high-priced oil and natural gas environment. For example, the global chemical industry is projected to grow 3 - 6 percent per year through 2025, with biobased chemicals’ share of that market rising from 2 percent currently to 22 percent or more by 2025. The science and technology for producing biobased products have advanced to the point that a wide array of products such as fuels, chemicals, and materials currently produced from petroleum feedstocks can now be produced from biobased feedstocks. Moreover, these products can compete on a performance basis with products made from petrochemical feedstocks. The shift toward greater use of biobased products will be linked to the development of biorefineries capable of producing both liquid fuels and streams of feedstocks for a wide range of biobased products. But to achieve the forecast growth, a number of scientific and processing impediments must be cleared including the development of improved fermentation processes, improved biocatalysts and integration of biomass conversion into large-scale biorefineries. Currently and for the next 10 years, grains will be one of the primary feedstocks for biobased product production, corn being the primary feedstock and oilseed crops playing a growing role. However for biobased products and biofuels to achieve expected targets, it will be necessary to develop processes for utilizing a broad range of plant and animal material and animal waste. Economically viable cellulosic conversion of plant material will be critical. Public sector investments in research and product development have played and will continue to play an important role in developing and deploying biobased products. Keywords: Agricultural and Food Policy; Crop Production/Industries; International Relations/Trade; Productivity Analysis; Research and Development/Tech Change/Emerging Technologies; Resource/Energy Economics and Policy (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:ags:usdami:329778 Access Statistics for this paper More papers in USDA Miscellaneous from United States Department of Agriculture |
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