In July 2010, the U.S. Environmental Protection Agency established the Renewable Fuel Standard Two (RFS2), which for the first time included specific mandatory biodiesel volume requirements for diesel refiners and importers. In addition to RFS2 (which is U.S.-specific) there are growing mandates around the world requiring the increased use of biodiesel now and into the future.
In North America, the U.S. mandates are for 1 billion gallons in 2012 and 1.3 billion gallons in 2013, which work out to a blend rate of about 2% of all diesel. Canada uses a direct blend rate of 2%, which should translate to 130 million gallons in 2012 and 158 million gallons in 2013. Combined, the North American market represents an approximate $6.6 billion industry. This compares to an approximately $23 billion market in the European Union, which has a higher blend rate of 5.75% (legislated to increase to 10% by 2020) and higher per capita diesel use.
Initio is not only going to play in the North American and European space, but plans to enter the South American and Asian markets as well.