Increasing demands for transportation fuels, their impact on global warming, energy security and ‘peak oil’ concerns has made companies to look at alternative fuel sources like biofuels. But the adoption of biofuels depends on how they can be used without causing environmental destruction and creating social tensions. 
''Firms need to develop sustainable business models to fully take advantage of the potential of new energy technologies'', says Dr. Sujith Nair, researcher and associate professor at the Umeå University’s Research Institute for Sustainability and Ethics in Business, in Sweden.
A research article recently published in the journal, Energy Policy by his group argues that along with technological development, the development of new kinds of business models can lead to widespread adoption of biofuels in a sustainable way.
Environmental hazards, despite their negative consequences, have brought a positive vibe to the business world. It created a whole new market - a market, which spreads across the industries around the world. However, the trick lies in the innovative and sustainable exploitation of these markets. While the size of the market looks highly attractive and prosperous, there are a plethora of examples of failed attempts to ‘go green’. That is why it is important to look at the characteristics of these initiatives including their business models, their external environments, and the role they can play in building businesses of the future.
Firms can be both economically successful while also supporting community and environmental development. This should be emphasized by the biofuel industry where the business models can involve arid land development, the creation of employment in undeveloped regions of the world, providing livestock feed, fertilizers etc. thus creating wealth in these regions. Biofuel companies should not be using food crops to use as biofuel feedstock, but instead use non-food sources like algae. This can avoid social tensions that hamper the growth of biofuel adoption. The biofuel companies should involve groups such as farmers and be involved in local development. It will solve problems like land acquisitions, and supply chain development as it can be supported through policy initiatives by governments that aim at social development.
''Our research provides insights into potential opportunities, as well as pitfalls, in such businesses'', says Hanna Paulose from the Ohio State University in the US who was part of the research.
An example for this is Airbus whose global biofuel program is connecting farmers, refiners and airlines to form regional sustainable alternative fuel value chains. . Becoming environment-friendly lowers costs because firms end up reducing the inputs they use. In addition, the process generates additional revenues from better products or enables companies to create new businesses. In fact because those are the goals of corporate innovation, smart firms now treat sustainability as innovation’s new frontier. This partnership building between airlines and biofuel firms involves the creation of new technological and operational standards and setting up of global supply chains thereby creating a global transportation system based on clean fuels.
