Biofuels are traditionally distinguished as 1st generation and 2nd generation biofuels. 1st generation biofuels typically refer to biofuels (bio-oil, biodiesel and ethanol) made from crops that are also grown for food markets and are already available as commodity products, but which generally have a poor overall carbon balance (possibly even negative) and a negative impact on social and ecological sustainability. Jatropha oil is seen by many researchers as a 2nd generation biofuel, because it has a much better carbon balance, and does not compete with food markets.
2nd generation biofuels, including Jatropha oil, cannot yet compete with these 1st generation biofuels on costs alone (although with the market prices being paid for vegetable oils in the last 12 months, Jatropha might soon be able to compete directly on costs with rapeseed, soy bean and palm oil). However, there is growing criticism in western markets on the policies that promote 1st generation biofuels, and there are policy developments that make such biofuels increasingly subject to strict conditions on net carbon balance and other sustainability impacts. What impact that will have on the competitiveness of current feedstocks remains difficult to assess, but it certainly will reduce the current gap between production costs of Jatropha versus the current mainstream vegetable oil feedstocks.
Other 2nd generation biofuels include technologies such as biodiesel from algae, various technologies to convert woody mass to ethanol or oil, etcetera. None of these are currently in the vicinity of Jatropha oil with regard to production costs. The first few years of this decade saw much optimism than some of these technologies could be ready for large scale commercial production somewhere in the next decade –– but more recent studies and presentations of scientific researchers have called for lower expectations, suggesting that it may actually take much longer before such a stage could be achieved, and that production costs would be higher than originally foreseen.
What is actually going to happen over the next decades remains difficult to forecast. What is clear however, is that among all the ‘‘hype’2’ around 2nd generation biofuels, Jatropha oil is one of the few that is now gradually starting to become established as a real option –– with real commercial production. Diligent is among the pioneers developing these actual production volumes, in real life. Its future production costs can be increasingly better understood and assessed, its potential is gradually being proven, whereas all possible ""competitors"" that would (theoretically) be capable of significantly transforming biofuel markets are still many years away from commercial production.