Uncertainty grips biofuel market: expert

Updated: 2011-09-27 17:06


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WEST LAFAYETTE, the United States - The American biofuel and clean energy industries are facing increasing uncertainties in the face of the current global financial crisis, says Wallace E. Tyner, professor of agricultural economics at Purdue University.

Despite recent scientific advancements and enthusiasm for the production of biofuels like ethanol, an unpredictable world market makes the future of the industry an uncertain one, according to Tyner.

"Biofuels are in a very, very uncertain environment and there are 5 major sources of uncertainty: future oil prices, feed stock costs, conversion costs, environmental impacts for second generation biofuels, and last government policy," Tyner said in a keynote address at Purdue University's China-US 2011 Joint Symposium on Global Sustainability Issues: Energy, Climate, Water and Environment.

These risks and high costs facing the industry make it difficult to attract the private sector investment. Facing issues from federal budget cuts to farmers' reluctance to trade in annual food crops for a committed 10-year energy crop, the biofuel industry needs to evaluate how to share risks if it is to succeed in the US market economy, Tyner said.

At the symposium, prominent academics proposed a rethinking of methods and greater cooperation between the two countries, as both face high carbon emissions and other environmental issues. Nearly 100 delegates from China and the United States are attending this year's symposium on September 25-28.