Suggested Citation:
Kessler, Jeff and Daniel Sperling (2016) Tracking U.S. Biofuel Innovation Through Patents. Energy Policy 98, 97 - 107

We use biofuel patents as a proxy for biofuel innovation. Through use of natural language processing and machine-learning algorithms, we expand patent classification capabilities to better explain the history of biofuels innovation. Results indicate that after the initial establishment of the U.S. biofuel industry, there were two surges in biofuel innovation: 1995–2000, characterized by heavy patenting by 1st generation (food-based) biofuel firms; and 2005–2010, characterized by a second surge of innovation by those same large firms, complemented by a large number of biotechnology firms producing a relatively small number of 2nd generation biofuel patents. Our analysis corroborates the widespread understanding that the first surge in biofuel innovation was linked to innovations in agriculture, and that the second surge of biofuel innovation was driven by demand-pull policies mandating and incentivizing biofuels. But the slow emergence of a 2nd generation cellulose-based biofuels industry, far slower than called for by policy, suggests that technology-push policies more focused on R&D and investment may be needed to accelerate the commercialization of 2nd generation biofuels.

Keywords: biofuels, innovation policy, low-carbon technology, natural language processing