Southeastern Asia's biofuel market to hit USD 4.3bn in 2017 - Frost & Sullivan

Sep 19, 2012 - The biofuel market in southeastern Asia is seen to jump to USD 4.3 billion (EUR 3.3bn) in 2017 from USD 1.78 billion in 2011, according to Frost & Sullivan’s report Strategic Analysis of Southeast Asian Automotive Biofuels Market.

Demand for green fuel in the countries from the region is being driven by different blending mandates, aimed at cutting greenhouse gas emissions, bolstering agriculture and protecting against fluctuations in crude oil prices. Frost & Sullivan research analyst Shree Vidhyaa Karunanidhi explained that most governments in southeastern Asia were promoting biofuels as a way to cut their heavy dependence on crude oil imports and use a more sustainable substitute.

Despite the availability of raw materials, biofuel demand in the region is growing slowly as the government continues to subsidise petroleum-based fuels. "The governments can aid the market by enforcing blending legislation, removing subsides for petroleum-based fuels and providing incentives for consumers and tax breaks for biofuel companies," said Karunanidhi.

The biofuel penetration rate in southeastern Asia now is around 1.8% of total automotive liquid fuels consumption. It is seen to reach 3.3% by 2017. Thailand is a relatively mature market, Malaysia’s biofuel industry is suffering from the government's unfavourable pricing mechanisms and rising crude palm oil prices, while consumption of both biodiesel and ethanol in the Philippines is growing. Vietnam is to introduce blending mandates in 2013 and produce biofuels -- mainly biodiesel from catfish oil and ethanol from cassava, and Indonesia intends to improve biodiesel production, even though its ethanol market is still rudimentary.

(USD 1 = EUR 0.767)

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