Global biofuels - an overview
The R&D&D of biofuels value chains in Europe is considered by the EBTP in the context of all aspects of global biofuels:
- Availability and sustainablility of feedstocks at a local and global level
- Growth in production and use of biofuels worldwide
- Commercilisation of innovative bioconversion technologies
- End Use of biofuels for road, air, rail and shipping
- Public and private investment
- Potential impacts on communities both within and outside the EU27
A wide range of feedstocks are available globally for biofuel production including energy crops (e.g. Miscanthus, Jatropha, Short Rotation Copice), wastes (e.g. waste oils, food processing wastes, etc), agricultural residues (straw, corn stover, etc), forestry residues and novel feestocks, such as algae.
The impacts of growing populations and climate change, mean there is increasing local and global competition for land, feedstocks and water for food production (crops and livestock), non-food crops (e.g. plant oils for soap production, timber for construction), and bioenergy (heat and power).
At the same time, biodiversity (species of plants and animals) need to be conserved, and forested areas must be protected as they act as importrant habitats and carbon sinks. In other words, the forests store large amounts of carbon in vegetation and soil. If areas are cleared for logging, grazing, crop production or roads, the carbon is released into the atmosphere and habitat is lost.
Various projections for global growth of biofuels production to 2020 have been made by international organisations, independent consultants and biofuels associations.
The report 'Global Biofuel Market Analysis' by RNCOS estimates that Brazil and the US accounted for 87% of global biofuel production in 2008, driven by government support.
The RNCOS report forecast that biodiesel production would grow at a Compound Annual Growth Rate (CAGR) of 6% from 2009 to 2018, with bioethanol production increasing at 5% CAGR over the same period. The report predicts significant growth potential for biofuels in India and China.
This prediciton is reinforced by the OECD (Organisation for Economic Co-operation and Development) and UN FAO food agency, which projected that global ethanol production will double between 2007-2017 reaching 125 billion litres. Biodiesel is predicted to increase from 11 billion litres to 24 billion litres over the same period (these forecasts assumed that there would not be major changes in US or EU policies supporting the production and use of biofuels through tax incentives and blending targets).
International trade in ethanol is expected to grow rapidly over the next decade, mainly with exports from Brazil to the US and EU. However, growth in international trade in biodiesel is anticipated not to grow significantly due to technical issues, issues surrounding trade in plam oil, policies such as the introduction of B-99 'anti-dumping' duties, and increased national production of biodiesel by consuming countries.
Recent statistics on biofuels production and consumption in EU Member States in 2011 are available in the EurObserv'ER Biofuels Barometer 2012. This indicates that "between 2010 and 2011 biofuel consumption increased by 3%, which translates into 13.6 million tonnes of oil equivalent (toe) used in 2011 compared to 13.2 million toe in 2010. The European Union’s attention has shifted to setting up sustainability systems to verify that the biofuel used in the various countries complies with the Renewable Energy Directive’s sustainability criteria."
In 2010, The European Biodiesel Board estimated that European Union biodiesel production totalled 9.6 million metric tons. The EBB estimates the EU is responsible for over half of the world’s biodiesel output.
China is currently the world's third biggest national producer of biofuels (after the US and Brazil). Bioethanol is currently produced on an industrial scale in several provinces (4 initial ethanol plants having been supported by government subsidies). Ethanol is typically blended at 10% (E10). Ethanol was initially produced from grain, but new plants must now use cassava, sweet potato or sorghum. Demand for biodiesel is growing in China, but production (using oil crops) tends to be smaller scale and is more widely scattered. [Source: Biofuels in China: Development Dynamics, Policy Imperatives, and Future Growth Caleb O’Kray and Kang Wu, 2010].
There is growing interest in advanced biofuels in China. Both biotechnology and new energy are listed as 'strategic emerging industries' in China’s 12th Five-Year Plan, which sets a target of renewable energy consumption of 11.4% by 2015.
In August 2012, TMO Renewables signed a Memorandum of Understanding (MOU) with the authorities of Heilongjiang, China, to secure long term large volume biomass feedstock supply for future biofuel production facilities from Heilongjiang State Farm, the largest state owned farming corporation in China. In May 2011 TMO Renewables announced technology partnerships with COFCO and CNOOC New Energy Investment in China to produce ethanol from cassava. Other deals in China in 2011 included LanzaTech (ethanol plant production), American Jianye Greentech (MSW ethanol project), Celanese, Wilson (syngas-to-ethanol), Chempolis, Henan Yinge (biorefinery joint venture), Green Biologics (Biobutanol project) [Source: Biofuels Digest].
An advanced ethanol demonstration plant is to be built in 2011 by COFCO and Sinopec, following the signing of a "memorandum of understanding" with Novozymes.
A study commissioned by Novozyme estimates that up to 2.9 million jobs could be created by the advanced biofuels industry in China (2011-2030). This includes jobs created in the agricultural residue supply chain. See Moving towards a next-generation ethanol economy.
There is also considered to be significant potential for algal biofuels in China [Source: Available Resources for Algal Biofuel Development in China, Shuhao Huo et al, Energies 2011, 4(9), 1321-1335]. CBEL invested in an algal biofuels venture Phyco BioSciences in early 2011.
China could produce 12 million metric tons of aviation biofuel a year by 2020 (accounting for 30% of its total jet fuel consumption) according to Civil Aviation Administration of China Deputy Director Li Jian in March 2012. Potential sources of feedstock include macro and micro alage and used cooking oil.
See also Biofuels at What Cost? Government Suport for Ethanol and Biodiesel in China (Global Subsidies Initiative (GSI) of the International Institute for Sustainable Development (IISD), November 2008). However, this document does not reflect current Chinese policy on biofuels.
The 'National Biofuel Policy' (September 2008) aimed to meet 20% of diesel demand in India with biodiesel. On the small scale Jatropha oil has been used as an alternative to diesel by remote communities in India for many years. Jatropha is now being considered for industrial scale planting as an energy crop in 19 states offering a combination of available marginal land, growing conditions and socioeconomic factors. Overall, it is proposed to plant 3 million hectare of wasteland with jatropha over 3 years.
In 2006, India accounted for 4% of global ethanol production (2m kilo litres) from sugar cane and has plans to expand its production. In common with other emerging technologies, India proposes to replace 10-20% of gasoline production with bioethanol. R&D&D on Cellulosic Ethanol is increasing with PRAJ Industries developing technology for cellulosic etahnol. Reliance Life Sciences is also active in developing biodiesel (from Jatropha and other non-food oil seed crops), ethanol (from cellulosic biomass) and biobutanol.
The SAHYOG Project (Strengthening Networking on Biomass Research and Biowaste Conversion – Biotechnology for Europe India Integration) aims to actively link research activities implemented within EU research programmes and related programmes by Indian national institutions.
In February 2009, India and the US exchanged a memorandum for cooperation on biofuels development, covering the production, utilization, distribution and marketing of biofuels in India.
Israel is currently chair of the Eureka network a European platform for Industrial R&D in the Clean-tech sector, including sustainable advanced biofuels (Bioethanol, Camelina, use of biogas in CI engines).
Information on biofuels in Russia is provided by the Russian National Biofuels Association.
State corporation, Russian Technologies, will begin construction of a biobutanol factory in the Irkutsk region in spring 2011. The factory will use wood chips and other timber byproducts (Source: Moscow Times).
Russia is also reportedly keen to export biofuels to the European Union (ethanol, oilseed, etc).
Camelina species are being investigated for production of biofuels in the Caspian region and neighbouring countries.
In depth information about biofuels production in Australia is available from the Biofuels Association of Australia
In August 2009, The Australian Government's $15 million Second Generation Biofuels Research and Development Program was awarded to seven projects (pending negotiations).
Japan and Asia Pacific - Indonesia, Malaysia, Thailand
The biofuels industry in Japan is less developed than that in Brazil, the US and Europe. However the Japanases government has announced a number of measures to accelerate use of bioethanol (E10) (including increased collection of biomass resources and improvement of the bioethanol fuel station infrastructure). The aim is to increase bioethanol production from 50000 kilo litres in 2011 to 6 million kilo litres by 2030 - equivalent to 10% of annual gasoline use in Japan [Source: Asia Biomass Energy Cooperation Promotion Office].
Asia accounted for 12% of global biodiesel production in 2010, the majority from palm oil in Indonesia and Thailand.
In May 2012, The EU-Malaysia Biomass Sustainable Production Initiative (Biomass-SP) announced that potential investment of RM3.5 billion (€878 million) could be made in the biomass sector.
Background informaiton on the biofuels industry in various countries was also provided in 2008 by Asia Pacific Economic Cooperation (APEC (please note some of the information is now 3-4 years old). Countries covered include: Australia, Brunei, Canada, Chile, China, Chinese Taipei, Hong Kong (China), Indonesia, Japan, Republic of Korea, Malaysia, Mexico, New Zealand, Papua New Guinea, Peru, The Philippines, Russia, Singapore, Thailand, United States, and Viet Nam.
Africa offers siginificant potential for biofuel feedstock production, for example in Sub-Sharan Africa where bioenergy projects offer opportunities for investment and infrastructure improvements. Ducth initiatives such as the Global Sustainable Biomass Programme, and the Netherlands Programme for Sustainable Biomass are active in promoting sustainable bioenergy in Mozambique, South Africa, Tanzania, Kenya, Malawi, Zambia and other countries.
The FP6 project COMPETE Competence Platform on Energy Crop and Agroforestry Systems for Arid and Semi-arid Ecosystems- Africa (COMPETE) aims to stimulate bioenergy implementation in arid and semi-arid regions in Africa.
The EU-Africa Energy Partnership also paves the way for cooperation on production of renewable energy resources including biofuels. The African Biofuels conference in recent years has also highlighted the development potential of biofuels, both as a means of reducing reliance on imports of fossil fuels and for increasing revenues from export. However, food shortages, drought and social stability are still significant issues that have to be addressed in many regions of Africa.
Cleanstar Mozambique is supported by investment from Novozymes. Under CleanStar Mozambique’s innovative business model, thousands of farmers in Mozambique will have the opportunity to transition from charcoal production and slash-and-burn agriculture to cultivating a diverse range of crops and trees, which will significantly improve their income and nutrition levels while rehabilitating degraded soils and enhancing biodiversity. Whatever the families do not consume themselves, they will sell to CleanStar Mozambique. The company will produce a range of food products as well as an ethanol-based cooking fuel made from cassava, which will be sold into urban markets [Source: Biofuels Digest].
The development of markets for second generation (2G) biofuels is dependent on the availability of sustainable feedstocks (improving public acceptance of biofuels) and the demonstration and commercialisation of value chains based on new bioconversion technologies.
In Europe, the EBTP has developed a Strategic Research Agenda for biofuels updated in 2010), and has helped implementa European Industrial Bioenergy Initiative (EIBI) that will support demonstration of the most promising value chains (combinatins of feedstocks, conversion processes and end products) for production of sustainable advanced biofuels and bioenergy.
The United States is making substantial investments to bring second generation biofuels to market, particularly cellulosic ethanol, as outlined in the National Biofuels Action Plan (PDF 5.0 Mb).
in May 2009 the US DOE announced plans to Invest $786.5 Million in Recovery Act Funds in Biofuels. The funding for biorefineries includes a $480 million solicitation for pilot- and demonstration-scale "integrated" biorefineries, which produce advanced biofuels, biobased products, and heat and power in a single integrated system. In July the DOE announced 2009 $85m funding for development of algae-based biofuels and advanced, infrastructure-compatible biofuels.
In 2011, the USDA announced $375m in loan gaurantees to support industrial scale facilities for the production of Cellulosic Ethanol from a variety of sustainable feedstcoks (MSW, food waste, timber residues).
In Canada, the NextGen Biofuels Fund™, aims to bring biodiesel and cellulosic etahnol projects to market sooner by helping them bridge the high CAPEX (capital expenditure) gap to scale-up their technology solution to a large, demonstration-scale plant.
Research cooperation on advanced biofuels between EU and other countries
Research cooperation also occurs between the US and EU, both through the involvement of EU companies and universities in Amercian biofuels development programmes and through joint initataives. For example, the EC-US task force on biotechnology research includes a Bio-based Products working group. The joint working group was established in 2004 to facilitate and coordinate collaborative (EU-US) research in molecular biology to create or improve biobased products and biofuels.
Research cooperation between the EU and Central/South America is fostered through initiatives such as BioTop - Biofuels RTD Cooperation Latin America - Europe and FP7 Energy Second Generation Biofuels - EU Brazil Coordinated Call,as well as initiatives such as ACCESS2MEXCYT.
The portal Access4.eu includes a searchable list of research and innovation programmes which welcome EU participation in various fields. Covers countries such as Australia, Brazil, Canada, China, India, Mexico, New Zealand, Russia, South Africa, South Korea & USA.
The EU-Malaysia Biomass Sustainable Production Initiative (Biomass-SP) is a development cooperation project funded by the European Union (EU) under the SWITCH-Asia Programme, and jointly promoted by the Malaysian Industry-Government Group for High Technology (MIGHT), the Association for Environmental Consultants and Companies of Malaysia (AECCOM), the European Biomass Industry Association (EUBIA), and the Danish Technological Institute (DTI).
BIOMASS-SP will organize a series of capacity building programmes, workshops, and direct coaching programmes for SMEs to encourage implementation of sustainable production (SP) models by focusing on the following key areas:
- The implementation of Environmental Management System (EMS)
- Facilitation of greenhouse gas emission projects through Clean Development Mechanism (CDM) or Voluntary Carbon Standard (VCS) schemes.
- Measurement of carbon footprint and Eco-labeling certification
In the coming decades, biofuels will be required for road, air, rail and shipping. An integrated biofuels strategy is required for meeting the competing needs of these different transport types at national and international level.
For example, the Sustainable Aviation Fuel Users Group SAFUG brings together airlines from around the world, as well as sustainability projects, to create a path forward for the introduction of novel jet fuels. The aviation industry is also represented on the Steering Committee and Working Groups of the EBTP. The needs of the shipping and rail industries are being incoporated into the updated EBTP SRA/SDD.
A combination of public and private investment will be needed to demonstrate and commercialise second generation biofuels on both sides of the Atlantic. In Europe, this objective will be supported by the European Industrial BioEnergy Initiative.While in the US, significant government funds are being provided to accelerate the develeopment of biofuels markets.
Venture Capital also plays an important role, as outlined in the presentation on Private Equity funding of advanced biofuels technologies: a European and North American outlook (271 Kb PDF) by New Energy Finance given at the EBTP Second Stakeholder Plenary Meeting (SPM2) in January 2008.
The impact of growing biofuels markets has the potential to provide new jobs and incomes throughout the supply chain from rural communities and farmers to biotechnology and engineering companies, and fuel producers and distributors across the world. The EU, the US, South America, emerging economies and developing nations, can all potentially benefit from the development of sustainable advanced biofuels.
The Report US Economic Impact of Advanced Biofuels Production: Perspectives to 2030 (pdf) analyzes how growth of an advanced biofuels industry will impact four areas critical to U.S. economic recovery, including job creation, economic output, energy security and investment opportunity. The report suggested that the advanced biofuels industry could create 29,000 new jobs and create $5.5 billion in economic growth over the next three years and could ultimatelty create 800,000 new jobs by 2022 with a positive effect on output of $148.7 billion. In this scenario, the cumulative total of avoided petroleum imports over the period 2010–2022 would exceed $350 billion.
Brazil and the Netherlands have signed a cooperation agreement on the sustainable production of biofuels. This will involve helping developing nations to establish sustainable biofuels crops.
Addressing sustainability and social concerns
In certain countries around the globe, there are concerns that land could be seized from rural communities or farmers could be forced to grow large areas of biofuel monocultures with little concern given to energy inputs, local food supply, water resources or health issues. This reinforces the need for a common set of sustainability standards to be applied across global biofuel supply chains. These standards need to cover all major energy crops and producer countries, and should be enforced by monitoring and certification. Such measures will help to protect vulnerable communities in developing nations, create a 'level playing field' for global trade in biofuels and increase the social acceptability of biofuels among consumers.
Global sustainability standards should equally be applied to biomass feedstocks for heat and power and other non-food bioproducts, while legislation should not severely constrain the development of advanced biofuels, which are needed to meet climate change targets and maintain the security of energy supply and future mobility in Europe.