In today’s high oil price environment, the biofuels industry is experiencing
both increased visibility and rapid growth. We estimate that producer
value will grow from US$19bn in 2005 to nearly US $40bn by 2010.
Today, biofuels production is highest in the US, Europe, and Brazil,
where substantial state support exists in the form of tax policies
and blending mandates. While high oil prices are making biofuels
more competitive, recent increases in state support
also reflect the influence of agricultural interests and environmental
concerns aimed at improving the raw economics of production.