Global Biofuels Market, Strong Global Competitors to Emerge by 2012, Accenture Study Finds

HOUSTON, Texas; Sept. 12, 2007 – Despite the uncertainties inherent in a rapidly evolving industry, bioethanol and biodiesel producers with a cost advantage in producing biofuels will become net exporters over the next five years as a global biofuels supply market emerges, according to a new Accenture (NYSE: ACN) study.

The global study, which examines the key factors that will shape the emerging biofuels industry, finds that companies who can navigate the patchwork of local regulation and are flexible enough to deal with a broad range of unknowns – including the emergence of second-generation technologies, the development of the hybrid automobile market, and what key energy consuming nations such as China, India and Japan do – are most likely to succeed in the biofuels industry by 2012.

Conducted by senior executives in Accenture’s Resources operating group, the study identified several key issues determining the future success or failure of companies competing in the biofuels industry, including:

* Companies’ ability to sustainably scale feedstock supply, related storage and transportation concerns, lowering production costs, and increasing feedstock yields per acre;

* Continued pressure from governments, particularly in high-demand countries such as the United States, China, India and the European Union, to achieve energy security through diversification of their energy sources and increasing domestic production;

* Policy considerations favoring support of agriculture in almost all countries; and

* Regulations encouraging biofuel use to reduce CO2 emissions

“We believe that biofuels will experience a cycle similar to that of the Internet during the dot com bubble,” said Melissa Stark, a senior executive in Accenture’s Energy industry group. “Initially there will be a boom followed by a downturn as the realities of practically scaling this market become more apparent. Ultimately, the stable players will emerge after the dust settles.”

The study, which included a comparative analysis of 20 countries, found that incentives will encourage new entrants into the marketplace. The study indicated that different countries are moving at different speeds, taking varying paths toward the creation of a global supply market for biofuels.

The study also looked at the different players in the supply market – farmer-producers, agribusiness (food companies), independent oil companies, national oil companies and the independent (pure-play) biofuel producers, and found that all have different sources of competitive advantage and challenges, as well as marked differences in strategies.

“Our research shows that technology is the biggest uncertainty in the future of the biofuels industry,” said Stark. “Technology will continue to improve the economics of biofuels development, but it is still uncertain which technologies will have the most impact and what the ultimate scale of the industry will be.”

The study also included a comparative analysis of feedstocks. In several interviews with key stakeholders in the biofuels industry, sugar cane topped the list as the feedstock that would have the most market share in the production of bioethanol.

For biodiesel, including soybeans, rapeseed, jatropha, coconut oil, and palm oil, the responses were varied, with no clear consensus as to a dominant future feedstock. Soy-based biodiesel and jatropha are becoming increasingly important as sustainability issues challenge the future of palm oil.


In January 2007 Accenture launched a global study comparing the bioethanol and biodiesel markets of 20 countries (Argentina, Australia, Austria, Brazil, China, France, Germany, India, Italy, Japan, Nigeria, Poland, Slovakia, South Africa, Spain, Sweden, Thailand, the United Kingdom, Ukraine and the United States). Representatives from governments, national oil companies, agribusiness and an academic from one of the United States’ leading renewable research centers were interviewed as part of the study.

About Accenture

Accenture is a global management consulting, technology services and outsourcing company. Committed to delivering innovation, Accenture collaborates with its clients to help them become high-performance businesses and governments. With deep industry and business process expertise, broad global resources and a proven track record, Accenture can mobilize the right people, skills and technologies to help clients improve their performance. With more than 158,000 people in 49 countries, the company generated net revenues of US$16.65 billion for the fiscal year ended Aug. 31, 2006. Its home page is


Russ Keene
For Accenture

Matthew McGuinness
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