The biofuel industry has experienced remarkable growth over the last decade. Global production has tripled from about 18 billion litres in 2000 to about 60 billion litres in 2008 and has continued to grow after a slight pause in 2007-2008 (Kristoufek et al. 2012; Mandil and Shihab-Eldin 2010). However, production and consump­tion of biofuels worldwide returned to growth in 2010. According to US Energy Information Agency (EIA) data, total world biofuel production increased nearly six­fold over the 2000-2010 period, that is, from about 18 billion litres to about 104 billion litres. Supply is currently dominated by bioethanol, which accounted for approximately 75 % of total biofuel production in 2010 (Mandil and Shihab-Eldin 2010; Moschini et al. 2012). Similar figures are also reported for biofuel demand. Despite the growth in the biofuel industry, global consumption of biofuels in 2012 represented 3 % of total fuel consumption (IFPEN 2012), i. e. 55 million tons oil equivalent, of which 73 % is bioethanol consumption. Global production and con­sumption of biofuels, over the 2000-2011 period, are presented in Fig. 1.

At present, biofuel production and consumption are concentrated in a small number of countries or regions, with the United States, Brazil and the EU being particularly salient. Bioethanol has been the leading biofuel in the United States (from corn) and in Brazil (from sugarcane), whereas biodiesel is the preferred biofuel in Europe (from [1]

bioethanol production (thousand barrels per day) bioethanol consumption (thousand barrels per day) biodiesel production (thousand barrels per day) biodiesel consumption (thousand barrels per day)

Fig. 1 Global biofuels production and consumption (2000-2011) (US EIA 2013)

rapeseed oil) (Moschini et al. 2012). In 2006, the United States surpassed Brazil as the world’s largest bioethanol producer and consumer and, by 2010, was producing 57 % of the world’s bioethanol output. The EU follows as the third major producer (Mandil and Shihab-Eldin 2010; Moschini et al. 2012). By way of contrast, the EU is the largest producer and consumer of biodiesel. Over the period of 2009-2011, the EU accounted for about 60 % of global biodiesel production and about 70 % of global biodiesel consumption. The production and consumption levels in these three regions over the 2009-2011 period are summarized in Tables 1 and 2.

Of particular importance is that the industry is very much reliant on first — generation fuels (explained in Sect. 2 in chapter “Environmental Issues in the Liquid Biofuels Industry”). While these are generally produced from food crops (such as sugar cane, sugar beet or corn in the case of bioethanol, and vegetable oil derived from oleaginous crops in the case of biodiesel), they also have a variety of other commercial applications (such as stock feed in the case of corn, or use in industrial products such as cosmetics and engine lubricants, in the case of vegeta­ble oils). The cost-effectiveness of first-generation fuels is therefore closely tied to the global price of the feedstock used—a price set not only by demand for these feedstocks for energy, but also for other purposes.