Biofuel Industry ESG Thematic Report, 2023

Environmental, Social, and Governance (ESG) in the Biofuel Industry

The concept of environmental, social, and governance (ESG) is not without risks. There are risks associated with climate change and negative impacts from practices adopted by industries or sectors around the world. To minimize this risk, organizations, industries, or sectors are establishing sustainable targets and sustainable practices that allow them to positively impact global climate change.

Biofuel is a substance obtained from biomass, plants, and animal waste. It has a significant environmental impact which reduces the number of emissions released into the environment. Biofuels can be derived from many different sources, including plants, plants, and animal waste. It is used in transportation, home heating, and power generation from stationary engines. Biofuel has a significant impact on the planet in terms of the environment and considering social parameters within ESG. For example, biofuels are derived from plant materials and are expected to help reduce CO₂ emissions by 80% compared with fossil fuels. In addition, sustainable biofuels can reduce the need for traditional fuels, like fossil fuels, and are not location dependent. This is since biofuel is a renewable source of energy that won't deplete as fossil fuels.

In addition, there is a great deal of positive impact on society where it assists the community by producing biomass feedstocks and converting them into heat and power, transportation fuels, bioproducts, and creating new opportunities for farmers and foresters to diversify into energy crop production. Furthermore, biomass, bioenergy, and biofuels production benefit thousands of people in rural communities, including engineers, construction workers, and people in support industries.

Trends and Innovation in biofuel Industry

The primary reason for the transition toward biofuel is as it assists in combating climate change. The high dependency on fossil fuels lessens when opting for biofuels as these fuels are energy efficient, economically viable, sustainable, and so on. Furthermore, technology-wise there have been few innovations and advanced equipment that has helped the industry to an extent. To name a few, fiber reactor technology helps in reducing free fatty acids from 15% to less than 0.5%. The Fiber Reactor technology reduces the FFA content of distillers' corn oil from 15 to less than 0.5 percent. There are also antioxidant stabilizers for biodiesels, which disrupt the catalysis of fuel and improve fuel stability, and multi-feedstock technology, which uses waste oils and fats to make biodiesel while using 100% of them.

ESG Challenges

Biofuels are beneficial for the environment, but they come with challenges as well. To name a few, biofuel feedstock includes crops that are otherwise used directly or indirectly for human consumption. Diversion of these crops to biofuels may lead to more land being devoted to agriculture, as well as an increase in food prices. When the farmer produces the same crop all year round, it is known as monoculture farming. The farmer may gain economic advantages from this method, but the soil may lose nutrients that would ordinarily be replenished by crop rotation leading to degradation of land. 

In addition to negatively impacting the environment and contributing to water pollution, the use of fertilizers also has a downside. This is where it negatively impacts the environment and may cause water pollution. A large-scale industry for producing biofuel can emit a high level of emissions and cause small-scale water pollution, and if not managed appropriately, large quantities of water are required for irrigating biofuel crops that could put a strain on local and regional water resources.

Growth of The Biofuel Market

In 2019, the global biofuels market was valued at USD 135.7 billion and is projected to grow at a compound annual growth rate (CAGR) of 6.9% from 2019 to 2024. Depending on the source, biofuels can be produced from plants, animal waste, or algae. Biofuels are regarded as renewable because the feedstock material used can be replenished at a faster rate compared with conventional fossil fuels. Furthermore, the research also highlights critical factors of the industry.

Key Companies in this theme

    • Bunge Limited

    • Archer Daniels Midland Company

    • Valero Energy

    • Petrobras

Scope of the Biofuel Industry ESG Thematic Report: 

    • Macro-economic and ESG-variable analysis of the industry, including regulatory, policy, and innovation landscape

    • Key insights on infrastructure developments and ESG issues affecting the theme

    • Identify key initiatives and challenges within the industry

    • Identify ESG leaders within the industry

    • Understand key initiatives and the impact of companies within the sector to fuel an informed decision-making process

    • Analysis of industry activities based on multi-media sources, including significant controversies and market sentiment

Key Benefits of the Biofuel Industry ESG Thematic Report:

    • Developing a comprehensive understanding of macro-economic, Policies & Regulations and innovations affecting the market, globally

    • Key insights into Infrastructure developments and ESG issues affecting the theme

    • Identifying ESG risks and opportunities to business among leading players in the biofuels industry

    • Obtaining a clear and relevant understanding of company actions, progress, and impact and find opportunities for investment