Loading up: an analyst sees major energy players eventually dominating the emerging biofuels sector
Big oil ‘set to swallow biofuels’
Major energy companies will eventually swallow up the biofuels sector and will be most interested in large assets, Tim Peara, managing director of Alternative Energy Finance, said today.
"Who is the logical person to own the biogasoline business in future? I think it is big oil. They could buy this industry with two or three days of profits," he said at a conference in London organised by EastEuro Link.
"If it is not big oil it is going to be big power."
Biofuels are currently made mainly from grains and vegetable oil crops. Supporters argue they reduce emissions of the greenhouse gases which contribute to global warming and also offer energy security at a time when oil supplies may have already peaked.
Peara said oil companies would pay more for large assets, Reuters reported. "They want to buy scale," he said.
Biofuels plants are currently owned by a wide range of companies including small startups, major grain firms like Cargill and farmer co-operatives.
Major oil companies have largely remained on the sidelines.