When people think of COVID-19, they don’t see an obvious connection to the biofuel industry. But the reality is that every industry that exists has been affected by this worldwide pandemic. Biofuel production companies have declining sales as fewer people focus on saving the environment and focus more on protecting their health. This pandemic has already had a few impacts on the biofuel industry in the short-term. Let’s look at those, and then see what long-term impacts we might observe.
Statistics in the energy sector show that the demand for oil and has plummeted by 48% recently. Because the oil and gas industry has billions more customers than the renewable energy sector, it’s reasonable to predict that biofuel product demand and sales will drop even lower.
The reason for this decreased demand is pretty apparent. With travel bans in place, fewer people are allowed to leave their homes and attend public events, and they have little or no need to use their cars. They do not need any fuel if they cannot go anywhere.
Even though biofuel is cheaper and more energy-efficient than gasoline, it is less widely available. People tend to prefer the most convenient options during a crisis, primarily when their travel is restricted. They tend to focus more on the basics, such as buying food, stocking up on supplies, staying healthy, etc. They are not preoccupied with deciding which product is more environmentally friendly than another.
Changes in Governmental Policies
The COVID-19 crisis has changed the top priorities of many countries. Today, governments are focused on creating reforms related to reopening schools, funding failing businesses, and providing unemployment compensation for millions of people. They are likely to put environmental conservation and renewable energy at the forefront. They may not fund biofuel manufacturing if it is not high enough in demand.
On the other hand, massive social distancing has increased the demand for shipping and home delivery services. People need delivery trucks to provide the supplies they need, and some travelers are still flying on airplanes. The biofuel industry continues to play a significant role in the world of shipping and transportation.
One day, biofuels will ease the world away from oil dependency. During a pandemic, the effects start to slow down, but that doesn’t mean that everyone will lose interest in the future. It’s essential to remain patient and hopeful as the energy industry gets back to normal.