World demand for biofuels will expand at a nearly 20 percent annual pace to 92 million metric tons in 2011, 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. Other biofuels will also experience strong growth, though much slower than either biodiesel or bioethanol. On a regional basis, growth will be driven by a rapid expansion of the biofuel market in North America, particularly for bioethanol. The Asia/Pacific region and Western Europe will experience even faster advances, although absolute gains will trail the larger North American market. Similarly, increases in the small Africa/Mideast and Eastern Europe markets will be well above average. Growth in Latin America will be modest, a consequence of Brazil's already sizable market for bioethanol. These and other trends are presented in World Biofuels, a new study from The Freedonia Group, Inc., a Cleveland-based industry research firm.

The world market for biofuels has expanded rapidly in recent years as a 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 bioethanol demand has benefited from a powerful farm lobby in the United States, as well as rising oil prices that have increased bioethanol demand in Brazil. Growing concerns about global warming have helped raise both bioethanol and biodiesel demand in the European Union, while several countries in the Asia/Pacific region have instituted biofuel programs as a means of boosting their local economies.

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 commercially significant in the longer term.