Fuelling Mobility: Biofuels
Governments should promote biofuels within the context of a broader transformation of the transportation sector, as biofuels alone are unlikely to solve all of the world’s transportation- related energy challenges.
By Elena Virkkala Nekhaev
for oil is expected to grow strongly for decades to come. Biofuels can help meet this demand, and although they are unlikely to replace oil, they should be regarded as an integral part of the energy mix. The reasons for the strong and spreading interest in biofuels,
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driving increasing production, include the need to diversify transport fuel supply sources, mitigate the impacts of crude oil price volatility, spurred by reductions in biofuels production costs and growing concerns about the environment. Currently, two countries, Brazil and the US, account for
nearly 80% of global biofuels production. Both countries produce mainly bioethanol – the US from maize and Brazil from sugar cane. Europe, on the other hand, produces mainly biodiesel and today accounts for nearly 90% of world biodiesel output. Biodiesel production in Europe has been growing fast, primarily due to high subsidies and other incentives offered by governments. China and India are also major producers of biofuels, bioethanol in particular. South-East Asian countries which are large palm oil producers could develop competitive biodiesel production and export business. Their success, however, would to a large extent depend on global trade policies and domestic subsidies for biofuels, in particular in Europe and North America. It is widely expected that global
production of biofuels will continue to grow in the coming years, although at somewhat slower rates than earlier anticipated. This reflects the downturn in global economic activity, concerns about biofuels’ economic and environmental sustainability, and their impact on food prices among other reasons. Demand for biofuels will grow particularly strongly in developing countries, although the US and Europe will remain the biggest consumers. The majority of biofuels will continue to be produced and used domestically. Bioethanol produced from sugar cane will account for the major share of internationally traded biofuels, and Brazil is expected to remain the leading bioethanol exporter for the coming decades. The International Energy Agency estimates an average annual growth rate for biofuels at 7%, which means that by 2030 biofuels would account for about 5% of the total road transport fuel demand (compared to approximately 2% today). To be able to compete with fossil fuels, biofuel producers
have achieved significant improvements in crop production and processing, and today the volume of biofuels produced per
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he world’s road transport system is based on one single fuel – oil – and today there doesn’t seem to be any realistic alternative to it on the required scale. Demand
acre/hectare is several times higher than it used to be. Improved production methods and technologies are expected to increase efficiencies even further. Supportive government policies have been essential to the
development of modern biofuels over the past two decades. Blending regulations, tax incentives, government purchasing policies, and support for biofuels have been the most successful factors in increasing biofuels production. Countries seeking to develop domestic biofuel industries will be able to draw important lessons – both positive and negative – from the industry leaders, in particular in Brazil, the US and the EU. Tax incentives have been used effectively in Brazil, Germany,
the US and other countries to spur biofuel production and reduce biofuel prices at the pump. The enormous purchasing power of governments has been used successfully in a number of countries to expand the market for various products. Government purchasing of vehicles and fuels that are certified under sustainability schemes could provide a powerful market driver. Local governments can switch entire fleets to vehicles that run on biofuels, as many have already. Consumer demand could also be a powerful driver of
A major debate continues around the world about biofuel production and its impact on traditional agriculture
the biofuels market. Low-interest, long-term loans and risk guarantees are required to facilitate the development of commercial refineries and ‘biorefinerie’. Extension services for farmers should provide them with the proper resources and incentives to select sustainable crops (particularly native species that reduce the need for water, fertilizers, and pesticides), reduce the frequency of tilling and replanting, and provide habitat for
wildlife. Technology is a key factor to enhance both food and bio-energy production and increase the output without adverse economic and environmental implications. One of the main goals of developing the biofuels sector is
sustainability. The sustainability driver is based on the three pillars of economic, social and environmental sustainability. In economic terms, biofuels production has to be cost-effective and competitive. In social terms, biofuel development can create a massive new demand in the agricultural economy. As biofuel production is an agricultural process, the same elements and inputs contribute to its overall efficiency.
Biofuels & Land Use A major debate continues around the world about biofuel
production and its impact on traditional agriculture, i.e. the perceived competition for land and the risk of displacing the production of human and animal feedstock.
worldPower 2010
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