Download - Biofuels 201107
-
8/14/2019 Biofuels 201107
1/12
World Business Counci l for
Sustainable Development
Issue BriefI Energy and Climate Focus Area
Biofuels
-
8/14/2019 Biofuels 201107
2/12
2
Throughout history,
bioenergy has been
important for satisfying
human needs. At present,
it is primarily used for
heating and cooking in
the developing world. But
as world leaders
contemplate the post-Kyoto framework, muchattention is being given to new, modern uses of
bioenergy. Biomass substitution for fossil fuels in heat
and power systems could play an important role in
stabilizing our carbon emissions. As leaders begin to
discuss carbon emission reductions of 50% by 2050,
biofuels could take on an urgent role in emissions
mitigation in the transport sector.
In addition to climate change as a driver, increasing
concerns about the rising cost of hydrocarbon-based
transportation fuels and growing concern over energy
security are causing many countries to view biofuels as
a key element of national energy strategy. Although
less efficient than when used for heat, power or
manufactured forest products, biofuels may yet prove
to be societys choice. In any event, biofuels are
currently the alternative that is being actively
promoted in many parts of the world.
Overview
Introduction
Bioenergy Biofuels Biomass
Bioenergy is energy produced from organic matter
(biomass).
Biofuels are liquid, solid or gas fuels derived from
biomass, either from recently living organisms or from
their metabolic waste. Biomass refers to organicmaterial made from plants and animals.1 The
production of biomass and biofuels must be carried
out sustainably in order to balance the carbon cycle
and keep it intact, and to ensure that the
environmental and social impacts of their production
are acceptable.
To learn more about biomass, download our Biomass
Issue Brief at: www.wbcsd.org/web/biomass.htm
Ethanol
Bio-oil
Methanol
Bio-methane
FT diesel
Biodiesel
DME
Hydrogen
Digestion
Gasification
Hydrolysis/fermentation
Pressing/esterificationEnzymatic transesterification
Pyrolysis
Oilseed rape
Wheat
Maize
Sugarbeet
Potatoes
Miscanthus
Switchgrass
Reed canary grass
Arable/ annual Crops
Herbaceous perennials
Short rotation coppice
Pine/spruce
Woody pe rennials
Forestry residues
Straw
Organic municipal wastes
Waste fats and oils
Residues + wastes
Resources Conversion technology Fuel
Figure 1: Biofuels pathwaysSource:Adaptedfrom
E4tech.Hart,David,Ausilio
Bauen,Adam
Chase,JoHowes.Liquidbiofuelsand
hydrogenfrom
renewableresourcesintheUKto2050:atechnicalanalysis.E4tech(UK)Ltd.2003.
This issue brief focuses on the use of biofuels in the
transport sector. Although biofuels are being pursued
as a possible alternative to fossil fuels, currently most
of the biofuels available for motor fuels are more
expensive to produce per unit of energy delivered
compared to oil derived from fossil fuels. If fuel costs
are to come down, considerable development and
-
8/14/2019 Biofuels 201107
3/12
3
Overview
government investment will be required to improve
manufacturing and distribution technology.
Biofuels include a number of different products and
manufacturing pathways (see Figure 1). The most
widely used biofuel, ethanol, is currently made
largely from sugar cane in Brazil and from corn in the
United States. Meanwhile, the largest producer of
biodiesel is Germany, where the fuel is made fromrapeseed. Each pathway, from the resource to the
conversion technology to the fuel, has its own
distinct carbon footprint.2
Our principal source of data for 2005, as well as for
2030 references, has been the International Energy
Agencys (IEA) World Energy Outlook (IEA, 2006).
Projections to 2030 are based on the IEA Alternative
Policy Scenario (APS); 2030 is the year that has been
chosen to project the cumulative impact of the
implementation of the national policies under
consideration in 2005. Currently, a number of key
countries are contemplating more aggressive targets
for the production of biofuels. The IEA is examining
much more forceful policy scenarios for discussion
during the post-Kyoto framework negotiations.
Global production of biofuels reached 20 million
tons of oil equivalent (Mtoe) in 2005, representingabout 1% of total road-transport fuel energy
consumption. Brazil and the United States together
accounted for almost 80% of global supply (see
Figure 2). Ethanol production is rising rapidly in
many parts of the world in response to higher oil
prices, and supported by government incentives and
rules on fuel blending. Similarly, biodiesel
production is highly concentrated, with the
European Union responsible for around 75% of total
biodiesel production (see Figure 3).
50,000
40,000
30,000
20,000
10,000
0
Million liters
EU
US and Canada
Brazil World
1975 1980 1985 1990 1995 2000 2005
Figure 2: World and regional ethanol fuel production
(1990-2006)
Source:Datafor1975-2003tak
enfromIEA.
BiofuelsforTransport:An
InternationalPerspective.2004.
Datafor2004-2006citedat
http://www.ethanolrfa.org/industry/statistics/#E.Originalsource:F.O.
Licht.
European Union75%
United States13%
Other12%
Figure 3: Global biodiesel production in 2006
(6.5 billion liters)
Sou
rce:CitedinWorldBank(2007).Biofuels:ThePromiseandthe
Risk
s.
AgricultureforDevelopmentPolicyBrief.Original
source:F.O.
Lich
tConsultingCompany,personalcommunication,31July2007.
-
8/14/2019 Biofuels 201107
4/12
4
Overview
First generation
biofuels refers to fuel
derived from feedstocks
harvested for their sugar,
starch and oil content,
which can be converted
using hydrolysis/
fermentation and
Firstgeneration
Second generation
biofuels describe those
produced from ligno-
cellulosic biomass, such as
herbaceous and woody
perennials, through
hydrolysis/fermentation,
gasification or pyrolysis
technologies. There is no industrial production ofbiofuels from cellulosic biomass, but research
focusing on large-scale production is being carried
out particularly in the United States, Canada,
Germany, Sweden, China and Brazil.
Successful ligno-cellulosic technology would
technically allow the utilization of a large variety of
feedstocks, as well as agricultural or municipal waste
materials and specialized cellulosic crops, such as
grasses and fast-growing trees.
Secondgeneration
Pre-
tax
dieselprices*
Pre-
tax
gasoline
prices*
Ethanol:sugarcane
Ethanol:maize
Ethanol:sugarbeet
Ethanol:wheat
Ethanol:ligno-cellulosic
Biodiesel:animal fat
Biodiesel:vegetable oil
Biodiesel:FT synthesis
Price orproductioncost (USD perliter)
20302005
1.2
1.0
0.8
0.6
0.4
0.2
0
Figure 4: Current and projected future ethanol production costs, compared with
recent (pre-tax) gasoline prices/liter of gasoline equivalent
Sou
rce:CitedinOrganisationforEconomicCo-operationandDevelopment.
Doornbosch,RichardandRonaldSteenblik."Biofuels:IstheCureWorsethanthe
Disease?"2007.Adaptedfrom
IEA.
WorldEconomicOutlook.2006
Cellulosic feedstock could be grown with less
fertilizer and water and on poorer quality lands than
those currently used to grow crops for conventional
ethanol production. Furthermore, cellulosic crop
costs could be considerably lower when compared to
those of the cereal and seed crops currently used in
Europe and the United States.
Figure 4 illustrates current biofuel production costs,which are projected to drop with upgraded
technology and conversion processes and improved
economies of scale. Aggressive energy policies and
anticipated revenue from carbon markets are driving
investment in biofuels. Experience will lead to lower
production costs. Over the next few decades, ethanol
is expected to account for the greatest proportion of
the increase in biofuel use worldwide, as production
costs are predicted to fall faster than those of
biodiesel and other biofuels.
pressing/esterification technologies. In OECD
countries, most ethanol is produced from starchy
crops such as corn, wheat and barley. In tropical
countries like Brazil, ethanol is made primarily from
sugar cane.
*Pre-tax gasoline and diesel prices (Jan. 2000-July 2006). Based on monthly average import prices for crude oil
into the IEA region, crude oil import prices varied between $20 and $70 per barrel in this period.
Note: Cost estimates exclude from consideration subsidies to crops or to the biofuel itself.
-
8/14/2019 Biofuels 201107
5/12
5
Overview
140
120
100
80
60
40
20
0
2004 2010 2015 2030
160Mtoe
United StatesEU
ChinaBrazilWorld
Figure 5: World biofuel consumption, alternative policy
scenario
Source:IEA.WorldEnergyOutlook.2006.
According to the IEA, fuel
demand from the road
transport sector is forecast
to increase considerably
over the next few decades,
especially in developing
regions. Biofuels are
projected to account for a
growing share of the resources used to meet thisdemand. Production is expected to increase at a rate
of 8.3% per year, reaching 73 Mtoe in 2015 and 147
Mtoe in 2030, to meet 7% of global road-transport
fuel demand (see Figure 5).3
Previously, it was believed that second generation
biofuel technologies would not be available on the
market by 2030; however, government funding
could change this. Advances in the development of
these technologies will be necessary before they can
be deployed commercially on a large scale. It is
possible that such breakthroughs could occur in the
near future leading to more rapid development of
biofuel production than previously expected.
Forecastsfor biofuelproduction
-
8/14/2019 Biofuels 201107
6/12
-
8/14/2019 Biofuels 201107
7/12
-
8/14/2019 Biofuels 201107
8/12
8
The single largest cause
of ecosystem degradation
is land use change for
agriculture, which is
driving conversion of
grasslands and forests.
The present share of the
worlds arable land used
to grow biomass for biofuels is expected to rise from1% to 3.8% by 2030, based on the assumption that
biofuels are derived solely from conventional crops.
The issues
Landrequirementsand land use
change
If second-generation technologies based on ligno-
cellulosic biomass were widely commercialized
before 2030, arable land requirements could be
much less per unit of biofuel output since an
important fraction of the biomass needed could
come from regenerated and marginal land not
currently used for crops or pasture, as well as from
agricultural and forest residues and waste.
Food security is one of the
major concerns
surrounding the
sustainability of the
biofuel industry. Biomass
production competes withfood, fiber and timber for
land, water and fertilizers.
There is a fear that this competition could lead to
commodity shortages, as crops that would otherwise
be available for food or forest products might be
used for fuel. According to one estimate, agricultural
and livestock prices could rise from 20% to 50% by
2016 as a result.5
Moreover, biofuel production negatively affects the
exports of certain crops; for example, recent exports
of US corn and soybean, Western European rapeseed
and Brazilian sugarcane have declined. Rich, crop
importing nations with greater purchasing power
could demand these crops at higher prices, thereby
further increasing their prices. For the poor, who are
net buyers of food, this would place even greater
pressure on already-limited financial resources.
However, such increases in the demand for, and price
of, crops can provide higher returns to farmers.
Moreover, higher prices for agricultural crops are onepossible answer to the paradox of agriculture.
Under this paradox, during periods of high yield,
farmers have had to sell their output at low prices
because supply outstripped demand. Now that there
are potentially alternative uses for food crops, supply
and demand could become more balanced, resulting
in higher prices for agricultural produce.
One of the outcomes of this paradox is that farm
income subsidies have been used broadly by
Competitionfor food, fiber
and forestproducts
many governments to sustain farming as a viable
business sector.
Biofuels, as a new value-added use of agricultural
products, creates the potential for many more farmers
to improve their businesses and reduce or eliminatethe need for ongoing income subsidies. Similarly,
higher demand for biomass could reduce the amount
of food dumped internationally.
Finally, the problem of food scarcity in certain areas is
currently more an outcome of inequitable distribution
due to the existing food distribution system, an issue
which is outside the biofuels domain.
-
8/14/2019 Biofuels 201107
9/12
-
8/14/2019 Biofuels 201107
10/12
10
Integrating agricultural
markets of countries where
there is potential for
providing feedstock at low
cost with fuel demands of
the high-consuming
countries will speed the
deployment of biofuel
technology. Rapid deployment will present
environmental and social sustainability challenges.
Creating and implementing a certification system based
on sustainability criteria could play an important role in
addressing these challenges and ensuring that biofuels
are produced in a responsible manner.
Different biofuel production technologies have very
different carbon footprints. For instance, cultivation ofenergy crops on depleted agricultural soils can yield
beneficial carbon sequestration effects in addition to
providing habitat and other ecosystem services. But
those same practices on undisturbed peatlands would
have negative impacts on water and habitats. They
could result in a large, one-time release of carbon from
the soil that overwhelms the positive benefit of the
displaced fossil fuel consumption.
The issues
Sustainableproduction
Thus, criteria that are quantifiable, and yet flexible
for application in various settings, could focus on
areas such as GHG emissions, crop production,
biodiversity protection, food security and labor
conditions, among others. Moreover, it would be
imperative that compliance with established
criteria be enforced and for such enforcement
to not be costly.
The strain the worlds liquid fuel demand will place
on tenure systems and the lives of the rural poor will
be difficult to manage, yet by developing a system
that represents diverse stakeholders, such strain could
be alleviated. Several groups, such as the Roundtable
on Sustainable Biofuels, are exploring robust
certification systems that can distinguish the nuances
of environmental and social sustainability. Such asystem would have to be deployed globally to enable
end users to discriminate among fuels that respect
sustainability criteria. Finally, harmonization of
standards across countries could help various
stakeholders, particularly vehicle manufactures, to
develop uniform technologies, which could be fairly
easy to disseminate.
Given that more than
three-quarters of poor
people in developing
countries live in rural
areas, agriculture and
rural development are
critical to poverty
alleviation.7 Biofuel
production has a huge potential to reduce poverty bycreating income and wealth generating activities
while also meeting local energy demands. With these
potential opportunities, however, come issues of land
ownership, labor rights and food security, among
others. Biofuel programs, for instance, can be
especially harmful to farmers who do not own their
land. Moreover, unsafe working conditions and
abuse of labor rights threaten economic and social
progress. Therefore, making the right decisions now
and creating appropriate policies is a key component
to ensuring poverty alleviation and an equitable
distribution of growth.
Ruraldevelopment
As the second generation technologies based on ligno-
cellulosic feedstock become commercially viable, this
will reduce the potentially negative effects on land and
competition for food availability. But these technologies
could still be accompanied by a risk: a potential
increased likelihood of a greater push to exploit low-
yield lands (such as rangelands and savannas) to plant
switchgrass and other hardy biofuels, and the
displacement of cereals and subsistence crops.
Furthermore, the production of significant quantities of
biofuel feedstock on marginal lands could compete
with livestock grazing, have unacceptable impacts on
ecosystems, and damage soil fertility through
sustained removal of too much biomass residue. One
potential alternative feedstock under active
development is micro-algae. Although such
production raises the issue of genetic engineering,
algae could help avoid a number of the sustainability
issues associated with land use, freshwater use,
deforestation and food production.
-
8/14/2019 Biofuels 201107
11/12
11
1. Worldwatch Institute. Biofuels for
transport. 2007.
2. Six greenhouse gases are
covered under the Kyoto
Protocol. The term carbon
footprint is shorthand for the
sum of the gases carbon dioxide
equivalents.
3. IEA. World Energy Outlook. 2006.
4. Worldwatch Institute. Biofuels for Transport. 2007.
5. OECD-FAO. Agricultural Outlook, 2007-2016.
2007. www.oecd.org/dataoecd /6/10/38893266.pdf
(accessed 19 October 2007).
6. Worldwatch Institute. Biofuels for transport. 2007.
7. World Bank.Agriculture & Rural Development: Issue
brief. 2007. www1.worldbank.org/publicsector/
pe/pfma07/ARDBrief.pdf (accessed 10 August 2007).
Notes
Disclaimer
This report is released in the name of the WBCSD. Like other WBCSD
reports, it is the result of a collaborative effort by members of the
secretariat and executives from several member companies. A wide
range of members reviewed drafts, thereby ensuring that the document
broadly represents the majority view of the WBCSD membership. It
does not mean, however, that every member company agrees with
every word.
Photo credits Flickr, iStockphoto
Copyright WBCSD November 2007.
ISBN 978-3-940388-15-5
Printer Atar Roto Presse SA, Switzerland
Printed on paper containing 50% recycled content
and 50% from mainly certified forests (FSC and PEFC)
100% chlorine free. ISO 14001 certified mill.
The World Business Council for
Sustainable Development (WBCSD)
brings together some 200
international companies in a shared
commitment to sustainable
development through economic
growth, ecological balance and social progress. Our
members are drawn from more than 30 countries and 20
major industrial sectors. We also benefit from a global
network of about 60 national and regional business
councils and partner organizations.
Our mission is to provide business leadership as a
catalyst for change toward sustainable development,
and to support the business license to operate, innovate
and grow in a world increasingly shaped by sustainable
development issues.
Our objectives include:
Business Leadership to be a leading business advocateon sustainable development;
Policy Development to help develop policies that create
framework conditions for the business contribution to
sustainable development;
The Business Case to develop and promote the business
case for sustainable development;
Best Practice to demonstrate the business contribution
to sustainable development and share best practices
among members;
Global Outreach to contribute to a sustainable future for
developing nations and nations in transition.
www.wbcsd.org
WBCSD
-
8/14/2019 Biofuels 201107
12/12