What will happen in the UK biofuel industry in 2023? Let me grab my crystal ball and give you a few well-educated projections. While the market is very dynamic, and you can never predict cataclysmic events (like the Covid-19 pandemic or the war in Ukraine), specific trends are not likely to change globally or in the UK.
We can expect an ever-growing demand for biofuels
A piece of news that went under the radar was the government’s decision to continue its policy of increasing the mandatory percentage of the biofuel component. In 2023, we will see a 1.5% jump in the context of the expected increase of 3.5% overall until 2032. In other words, there will be an increased demand for biofuels backed up by governmental support and protection.
Production will increase, but will it keep pace with demand?
According to most global projections, the production of biofuels is set to double in 2023 alone – a clear sign of the industry’s health. However, we have to take those numbers with a pinch of salt. While a 100% increase sounds awesome in relative terms, the absolute numbers are not that impressive. Furthermore, these are global numbers – the production in the UK is not likely to explode overnight.
Prices will remain high
Even a high-school student with decent knowledge of the laws of economy would tell you that higher demand and insufficient supply can only result in higher prices. I see no reason why biofuel prices should go down in 2023, which can explain why most people will remain lukewarm to them overall.