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Commodity Online

CLEVELAND: World demand for biofuels will expand at a nearly 20 percent annual pace to 92million metric tons in 2011, according to a study by Cleveland based industry research firm Freedonia Group Inc.

The study by Freedonia suggests that the demand will increase despite recent concerns about the impact of biofuels on the environment and world food supplies.

Market expansion will come from a more than doubling of the world market for bioethanol, and even faster increases in global biodiesel demand, the study said.

Other biofuels will also experience strong growth, though much slower than either biodiesel or bioethanol.

The world market for biofuels has expanded rapidly in recent years as combination of domestic politics, rising oil prices, increasing concerns about global warming, and potential economic opportunity have spurred a broad range of countries to pass laws that support biofuel industries.

World biofuel production will track increases in demand as most countries seek to foster domestic biofuel industries, both to reduce reliance upon imported oil and to spur domestic economic development.

This will continue to favor the development of cereal based (maize and wheat) bioethanol capacity in North America and Western Europe, as well as sugarcane based bioethanol production in Latin America.

Likewise, biodiesel production will center on soybean oil in the Americas, rapeseed oil in Europe, and palm (and increasingly jatropha) oil in the Asia/Pacific region. Next generation cellulosic bioethanol and algal biodiesel technologies will become commercial significant in the longer term.

WORLD BIOFUEL DEMAND

(Million metric tons)

% Annual Growth

Item 2001 2006 2011 2001 2006 2006 2011

Biofuel Demand 15.20 37.70 92.00 19.9 19.5

North America 5.56 17.74 45.00 26.1 20.5

Western Europe 1.23 6.51 7.70 39.6 22.1

Asia/Pacific 0.01 1.95 8.85 187.1 35.3

Other Regions 8.40 11.50 0.45 6.5 2.2