Analyst Discusses European Interest In Green Fuels

Ram Ravi, a research analyst with the Frost and Sullivan European Industrial Process Control and Automation practice, looks at why a growing interest in green fuels is creating a buzz in Europe. The reason for this buzz lies in a number of certain key factors, including a rising demand for energy, soaring energy prices, volatility in oil prices and concerns over the environment. Europe's energy dependency, coupled with a lack of political stability in importing nations, has resulted in an increased focus on biofuels.

With pumps being an integral part of green fuel production involved in handling fluids such as acids, slurries and other corrosive substances, this trend is expected to positively affect the growth of the pumps market. Accounting for approximately one per cent of worldwide oil reserves, Europe depends largely on its neighbours for its energy needs. This, coupled with legal incentives, has resulted in increased European interest in alternative fuels. Pump applications for biofuel production involve the handling of corrosive and abrasive substances, including lime slurry, acids and waste slurries.

With carbon emission reduction target levels set for 2020, investments in this segment are expected to drive new equipment business. These performance-critical applications use both centrifugal and positive-displacement pump types. Pump types such as peristaltic pumps and reciprocating pumps are used predominantly in these processes. Peristaltic and diaphragm pumps are primarily used in applications involving the injection of enzymes or chemicals. Non-leakage characteristics, less noise and a minimum number of external parts have been essential in the demand for these pump types.

Diaphragm pumps are expected to replace piston/plunger pumps that are prone to leakage and noise generation. Although trends indicate that agro-based fuels offered immediate solutions to counter the fuel threat, investment levels have dropped considerably owing to factors such as competition to food production and the fact that the monetary demands of biofuel plants are greater. These factors have resulted in a greater focus on products that offer better energy saving and lifecycle costs. A low lifecycle cost, a feature of peristaltic pumps, has resulted in its increased adoption among different end users.

In addition, a low initial cost, no external parts and reduced maintenance have resulted in peristaltic pumps cannibalising into the markets of other positive-displacement pump types. Centrifugal pumps are also used in low-viscosity applications employed predominantly for fluid transfer. These pump types are used mainly to conserve energy in these applications. The transferred media contribute to pump breakdown in these process-critical pump applications, thereby offering extensive opportunities in the aftermarket business. The majority of the Eastern European nations, reportedly on the higher side of carbon emissions, will likely drive interests in biofuel investments.

Also, the extensive availability of arable land in Eastern Europe augurs well for biofuel investors; Hungary has been pegged as a potential market for biofuels because of the large availability of arable land and greater interests in investigating on other crop types. As with Western Europe, biofuel plants are expected to operate at reduced production levels as a result of a lack of demand. Germany, the largest producer of biodiesel, is foreseeing reduced investments because of a lack of favourable government policies and tax regulations. France, on the other hand, actively supports biofuel investment, with government policies, incentives, transportation and environment schemes expected.

With a large base of diesel vehicles in Europe, the focus on the production and consumption of biodiesel is expected to be high. With little more than 50 biofuel plants still under construction, the potential for the growth of pumps in this industry is high. Companies such as Exxon, Shell and Neste Oil are investing in countries such as Hungary, the Netherlands and the UK. Although the financial crisis, coupled with existing regulatory pressures, is hindering the growth of the pumps market in the biofuel industry, long-term growth is expected with the advent of third-generation biofuels.

Circulator and metering pumps used in bioreactors for algae cultivation and development are considered to be among the predominant pump types used. Although the third-generation biofuel concept seems promising in terms of environmental protection, the process involved in fuel development is considered costly. As a result, the pumps market in biofuel production is expected to reap benefits over the long term. Ravi focuses on monitoring and analysing emerging trends, technologies and market dynamics in the pumps, valves and compressors market in Europe.


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