Governments and large corporations will have to invest heavily in the biofuel sector if it is to become commercially viable.
That is the finding of a new study by Lux Research, which claims that the market dominance of the petrol and fossil fuel sector will be hard to diminish without financial attention.
It stated that technology and machinery manufacturers are coming under increasing pressure to meet the demands of the market.
However, the report also claimed that investment in the biofuel industry is sometimes hard to procure.
While financers are reluctant to invest in technologies that have not yet been developed, the lack of money available makes it difficult to create such technologies.
"Developers cannot hope to commercialize their technology without corporations, and corporations will not have access to innovations without technology developers," it claimed.
The UK has however taken measures to boost investment in the industry.
As part of his 2010 Budget speech, the chancellor Alistair Darling unveiled a £2 billion green investment bank to help fund low carbon and bioenergy technologies.
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