While some ventures are sufficiently funded and successfully executed, others fell short of industry standard requirements and finally failed due to inefficient management. Their problems were further exacerbated by high feedstock costs associated with soy and other plant based bio-fuels.  Such issues completely decimated profit margins as well as the so-called ‘operating budgets’ for many newly established bio-fuel industry entrants during the mid 2007 and throughout the fiscal year to 2008.

 

Due to this external economic attribute, some operators today may find themselves in a rather difficult situation whereby they are “locked in” by the production utilization of soy oil as a feedstock.  This phenomenon is often instigated by the unfavorable contractual agreements and/or the high cost of retrofitting current equipment.   Simultaneously, the current market trend is driving a strong mass-consolidation paradigm shift, affecting supposed independently owned and operated facilities.  

 

This fact has been today’s crucial market driver: Well-strategized manufacturers with solid industry strategy and business management skills have been aggressively developing a higher production capacity by consolidating many underutilized operators. 

 

More essentially, operators are finding it increasingly difficult to produce high fuel quality that will meet the high standard requirements set-fourth by industry regulators. The application of the ASTM standard alone is no longer sufficient to meet minimum official quality standards.  Manufacturers have been strongly advised to upgrade their innovative disruptive technology if they are to satisfy regulators.  Furthermore, few manufacturers maintain access to an inexhaustive supply of high quality and economically viable feedstock, as bio-fuels are consistently being tested for their potential use in other applications.