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How much hope should we have for biofuels

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  • 1. Energy xxx (2010) 1e15 Contents lists available at ScienceDirect Energy journal homepage: www.elsevier.com/locate/energyHow much hope should we have for biofuels?qGovinda R. Timilsina*, Ashish ShresthaEnvironment and Energy, Development Research Group, The World Bank, Washington, DC, United Statesa r t i c l e i n f o a b s t r a c tArticle history: This paper revisits the recent developments in biofuel markets and their economic, social and envi-Received 13 January 2010 ronmental impacts. Several countries have introduced mandates and targets for biofuel expansion.Received in revised form Production, international trade and investment have increased sharply in the last few years. However,12 August 2010 some analysts linked biofuels to the 2007e2008 global food crisis. Existing studies diverge on theAccepted 17 August 2010 magnitude of the projected long-term impacts of biofuels on food prices and supply, with studies thatAvailable online xxx model only the agricultural sector showing higher impacts and studies that model the entire economy showing relatively lower impacts. In terms of climate change mitigation, biofuels reduces GHG emissionsKeywords:Biofuels only if GHG emissions related to land-use change are avoided. When biofuel production entailsClimate change conversion of forest to cropland, net reduction of GHG would not be realized for many years. ExistingFood crisis literature does not favor the diversion of food for large-scale biofuels production, but the regulated expansion of biofuels in countries with surplus lands and a strong biofuel industry cannot be ruled out. Developments in non-food based or cellulosic (or second generation) biofuels may offer some hope, yet they still compete with food supply through land use and are currently constrained by a number of technical and economic barriers. Ó 2010 Elsevier Ltd. All rights reserved.1. Introduction expansion in output, mandates and targets to guarantee consumption, and investment in the development of advanced The oil crises of the 1970s prompted interest in biofuels1 as an biofuel technologies. Declining production costs are making bio-alternative to fossil fuels for use in transportation in many coun- fuels more competitive, especially when oil prices are high, but intries. Brazil accelerated its national ethanol programme (Proálcool) almost all cases, they still require subsidies to compete effectivelyafter oil prices peaked in 1979; the United States (US) launched with gasoline and diesel today.a corn-based ethanol program at almost the same time but at Climate change consciousness has served as an important addi-a smaller scale than Brazil [1]. Other countries, such as China, Kenya tional driver to the embrace of biofuels because it assists climateand Zimbabwe, were also stirred into action by the oil crises, but change mitigation efforts by displacing fossil fuel consumption.their attempts to promote biofuels did not succeed [2,3].2 Subse- Given the enormous share of transportation in energy consumption,quent drops in oil prices evaporated much of the incentive and biofuels could contribute to the reduction of CO2 emissions from thestalled the momentum to expand biofuels production in most transport sector, but it could also lead to the conversion of forestcountries, with the notable exception of Brazil. Issues related to lands and pastures to crop lands, thereby increasing CO2 emissionsenergy supply security, oil price volatility and climate change from the agricultural sector. Whether or not biofuels cause netmitigation caused a resurgence of interest in biofuels, with rapid reduction of GHG emissions requires further investigation. More- over, the increasing scale of biofuel production and the escalation of food prices in 2007 and 2008 created serious concerns regarding the possible role of biofuels in the 2007e2008 food crisis that resulted in q The views expressed in this paper are those of the author only, and do not riots in many parts of the world.necessarily represent the World Bank and its affiliated organizations. A number of existing studies (e.g., [4e9]) have attempted to * Corresponding author. E-mail address: gtimilsina@worldbank.org (G.R. Timilsina). present an overall picture of the current status of biofuels. These 1 Only liquid transport fuels are considered here, although there are other fuels studies, however, have focused on specific issues. For example,derived from biomass. USAID [4] focuses on the sustainability of biofuels in Asia, while 2 For example, efforts to cultivate oil plants in China to insure against disruptions BNDES and CGEE [5] discuss the Brazilian experience with ethanol inin diesel fuel supply were abandoned after the drop in oil prices in the mid-1980s[2] the sugarcane based ethanol programs in Kenya and Zimbabwe began in early detail. FAO [6] concentrates on the relationship of biofuels with foodeighties but failed due to drought, poor infrastructure and inconsistent policies [3]. prices; similarly, Ajanovic [7] investigates the impact of the recent0360-5442/$ e see front matter Ó 2010 Elsevier Ltd. All rights reserved.doi:10.1016/j.energy.2010.08.023 Please cite this article in press as: Timilsina GR, Shrestha A, How much hope should we have for biofuels?, Energy (2010), doi:10.1016/ j.energy.2010.08.023
  • 2. 2 G.R. Timilsina, A. Shrestha / Energy xxx (2010) 1e15increase in biofuels production on feedstock prices. On the other content of conventional diesel, but better lubricity and a higherhand, OECD [8] assesses the impact of biofuel support policies, cetane value, and so can deliver fuel economy close to that ofwhereas Ajanovic and Haas [9] assess the economic prospects of 1st conventional diesel.generation biofuels in Europe given current policy conditions. A Biodiesel, however, is not without its problems. Exposure to air,succinct but broad assessment of biofuels is still lacking, particularly heat, light, water and some metals can all cause it to degrade;addressing some crucial issues, such as the promise of biofuels, their a common symptom of which is plugged filters in vehicles [12].economics, investment trends and potential economic, social and Since biodiesel has a significantly higher cloud point/pour pointenvironmental impacts. This paper aims to fill this gap. than petroleum diesel, it can cloud and gel in cold temperatures, This paper is organized as follows. Section 2 discusses the status leading to difficulty in starting vehicles in winter conditions. Coldof biofuel technologies, followed by a look at production, weather fuel filter plugging has also been known to occur withconsumption and trade patterns in recent years in Section 3. It then biodiesel blends as wax and water present in it can precipitate, andreviews biofuel policies and mandates around the world in Section glycerin and sterol glycosides in it form particulates and drop out of4. The cost of production and investment trends are presented in the solution faster, in cold temperatures. Furthermore, the perfor-Section 5. Section 6 discusses the impact of biofuels on food prices, mance of advanced emission control equipment such as dieselfollowed by a presentation of environmental impacts in Section 7. particle filters and NOx emission control catalysts with biodiesel isSection 8 examines the impact of biofuels on land use, and finally, not certain, and questions persist about their long-term durabilitywe draw key conclusions in Section 9. when used with biodiesel [14]. Infrastructure such as storage tanks, associated piping and leak detectors, and fuel dispensers and hoses for diesel fuel are considered to be compatible with blends of up to2. Technologies 5% biodiesel, but the lack of third party certification for higher biodiesel blends remains an impediment to the expansion of the Based on the feedstock used for production and the technolo- biodiesel market.gies used to convert that feedstock into fuel, biofuel technologies Second-generation ethanol is produced through the conversioncan be classified into two groups: first- and second-generation of lignocellulosic biomass. In contrast to the first-generationbiofuels. Technologies that normally utilize the sugar or starch ethanol, which is produced from the sugar or starch fraction of theportion of plants (e.g., sugarcane, sugar beet cereals and cassava) as plant (i.e., a small percentage of the total mass), lignocellulosicfeedstock to produce ethanol and those utilizing oilseed crops (e.g., conversion processes would enable full use of the lignocellulosicrapeseed, sunflower, soybean and palm oil) to produce biodiesel material found in a range of biomass sources, such as waste seedare known as first-generation biofuels [10,11]. On the other hand, husks and stalks (making use of plant residues not needed for foodbiofuels produced using technologies that convert lignocellulosic production) and fast-growing grasses and trees [15]. Lignocellulosicbiomass (e.g., agricultural and forest residues) are called second- biomass is comprised of polysaccharides (cellulose and hemi-generation biofuels, as are biofuels produced from advanced cellulose), which are converted into sugars through hydrolysis orfeedstock (e.g., jatropha and micro-algae) [1]. Whereas first- chemical (or combined) processes; the sugars are then fermentedgeneration biofuels have already been in commercial production into ethanol using existing fermentation technology.for several years in many countries, second-generation technolo- The other main approach to converting lignocellulosic biomassgies have yet to begin commercial production, with some excep- into biofuels entails the gasification of the feedstock to producetions (e.g., Jatropha in India).3 While first-generation biofuels synthetic gas (syngas) e a mixture of carbon monoxide, hydrogendirectly compete with food supply, second generation can produce and other compounds [16]. Then, the syngas can be converted toboth food and fuel together unless non-food crops4 are preferred. a variety of fuels, such as synthetic diesel, through FischereTropschBecause cellulosic biomass is the most abundant biological mate- synthesis, the same technology used in gas-to-liquids and coal-to-rial on earth, the successful development of commercially viable liquids plants. Such biomass-to-liquid (BTL) production can alsosecond-generation biofuels could greatly enlarge the volume and process lignin, which comprises about one-third of plant solidvariety of feedstocks [6]. However, although the cost of cellulosic matter, and can thus achieve higher liquid yields than lignocellulosicfeedstock is lower than that of first-generation feedstocks, cellu- ethanol production via hydrolysis [1]. Lignocellulosic ethanol andlosic biomass is more difficult to break down than starch, sugar and FischereTropsch biodiesel production is, for the most part, at theoils, and the technology to convert it into liquid fuels is more pilot and demonstration stages, but some commercial facilities areexpensive. under construction, and there is a commercial scale lignocellulosic First-generation ethanol is produced from sugars and starches. ethanol plant already operational in Sarpsborg, Norway [17].Simple sugars in a variety of sugar crops are extracted and then An alternative process to esterification for producing renewableyeast-fermented, and the resulting wine distilled into ethanol. diesel fuel is the hydrotreatment of vegetable oils or animal fats.Starches require an additional step e first they are converted into Chemically hydrotreated vegetable oils (HVOs) are mixtures ofsimple sugars through an enzymatic process under high heat, paraffinic hydrocarbons that are free of sulfur and aromatics,which uses additional energy and increases the cost of production feature a high cetane number and other properties similar to bio-[5]. Ethanol is typically blended with gasoline, and has a higher diesel produced via FischereTropsch (FT) synthesis [18]. HVOs,octane value than gasoline but produces about 70% less energy. however, address some of the known problems of fatty-acid methylBiodiesel is derived from lipids and is produced by mixing the oil ester, namely the cold start issue as well as compatibility withwith an alcohol like methanol or ethanol through the chemical existing infrastructure, engines and exhaust aftertreatmentprocess of transesterification. The biodiesel, or fatty-acid methyl devices. The first commercial scale HVO plant with a capacity ofester (FAME), made from this process has 88e95% of the energy 170,000 tons per year went on line in 2007 at Neste Oil’s Porvoo oil refinery in Finland, followed by another plant of the same capacity at that location in 2009. HVO plants in Singapore and Rotterdam, 3 Some of the literature refers to more advanced technologies, such as those with a capacity of 800,000 each, are planned to begin production inproducing biofuels from micro-algae, as third generation biofuels [13]. This study,however, treats these technologies as second-generation biofuels. 2011 [19]. Based on information available as of February 2010, total 4 Non-food crops such as switchgrass, miscanthus, jatropha compete with food planned capacity for advanced biofuels worldwide in 2013 is esti-supply through land-use change. mated at 1.38 billion gallons [20]. Please cite this article in press as: Timilsina GR, Shrestha A, How much hope should we have for biofuels?, Energy (2010), doi:10.1016/ j.energy.2010.08.023
  • 3. G.R. Timilsina, A. Shrestha / Energy xxx (2010) 1e15 3 World Ethanol Production opened its first biodiesel plant, which uses a mixture of vegetable oil and sewage as feedstock, in March 2005 [11]. Indonesia and Malaysia have recently begun producing biodiesel for the European market, and Argentina started biodiesel production in 2007 [8]. Despite this tremendous growth in biofuel production, the share of biofuels in total transport fuel demand was above 2% in 2004 in just three countries e Brazil, Cuba and Sweden [16], and global output accounted for approximately 1% of total road transport fuel consumption in 2005 [15]. In 2007, ethanol production still only amounted to about 4% of the global gasoline consumption of 1300 billion liters [27]. 3.2. Trade Global trade in biofuels relative to production remains modest;Fig. 1. World ethanol production. REN21 [25, 26, 27, 28, 138]; Renewable Fuels Asso-ciation [29] only about one-tenth of total biofuel production by volume is traded internationally [37]. Global trade in fuel ethanol is estimated at about 3 billion liters per year in 2006 and 2007, compared to less than one Biofuels can also be produced from second-generation feed- billion liters in 2000 [38]. Even as US ethanol production increased bystocks. Jatropha, an oilseed bush that thrives on marginal and semi- 20 percent in 2006, with dozens of new production plants becomingarid land, has attracted much attention as a feedstock for large- operational, blending mandates led to ethanol imports increasing sixscale biodiesel production in India [21], where researchers project times to about 2.3 billion liters [27]. The US, the world’s largestthat up to 15 billion liters of biodiesel may be produced from the ethanol importer, received more than half of its ethanol imports fromcultivation of jatropha on 11 million hectares of wasteland by 2012 Brazil, the world’s leading exporter, at 3.5 billion liters annually.5[22]. The use of micro-algae for biodiesel production appears to be Brazil was responsible for about half of the ethanol exports to theanother very promising future technology [13] since 80% or more of EU, the second largest importer of ethanol in 2006. China, the secondthe dry weight of algae biomass, compared to 5% for some food largest exporter of ethanol at 1 billion liters annually, exports mainlycrops, may be retrieved as oil for some species [23]. They also create to Japan, South Korea and other Asian countries [8].little pressure on arable land because they can be cultivated in About 12%, or 1.3 billion liters, of total biodiesel production ina wide variety of conditions, even in salt water and water from 2007 was internationally traded. The EU, at more than 1.1 billionpolluted aquifers [24]. liters per year, is by far the largest importer, while Indonesia and Malaysia as the main exporters, combining to export about 8003. Production, consumption and trade million liters [37]. While the US also appears to be a major biodiesel trader, this was in fact due to the importing of biodiesel to be3.1. Production and consumption blended with small quantities of conventional diesel for export to Europe in order to take advantage of a tax credit [31]. The loophole Global production of fuel ethanol grew from 30.8 billion liters in has since been closed.2004 to 76 billion liters in 2009 at an average annual growth rate of Since some major players, namely the US and the EU, have20%. The two leading producers, the US and Brazil, accounted for targeted biofuel production for domestic consumption, not manyabout 88% of the total in 2009 (see Fig. 1). countries beside Brazil have the ability to be large exporters of Table 1 presents biofuels production by country for the 2004e ethanol or other biofuels. South and Central America, and Africa2009 period. In 2006, the US surpassed Brazil, the longtime leader, to a lesser extent, possess the greatest differential betweento become the leading fuel ethanol producer in the world by technical production potential for biofuels and expectedproducing over 18 billion liters (20% more than the previous year) domestic transport energy demand, and so countries in these[27]. Aside from the US and Brazil, significant production increases regions have the most potential to export to North America,are found in France, China and Canada in recent years. Australia, Europe and Asia [15]. Yet trade opportunities are furtherGermany, Spain Colombia, India, Jamaica, Malawi, Poland, South restricted by the high tariffs many countries, such as India, haveAfrica, Sweden, Thailand, and Zambia also engage in the commer- established to protect their agriculture and biofuel industries.cial production of ethanol. While import tariffs are relatively low in OECD countries, high Although total production of biodiesel around the world subsidies serve as a barrier to lower-cost foreign exporters andremains small in comparison to ethanol, its growth is higher than protect domestic producers. In other cases, trade in biofuels isthat of ethanol, at an average annual growth rate of approximately limited by regulatory measures, such as the EU’s sustainability50% between 2004 and 2009. This growth from 2.3 billion liters in criteria for palm-oil imports from Malaysia and Indonesia, and2004 to 17 billion liters in 2009 is illustrated in Fig. 2. Germany, Thailand’s ban on palm-oil imports [4].France and Italy are the biggest producers in the EU, but the US Global trade in biofuels is expected to increase due to compar-passed France to become the second biggest producer of biodiesel ative advantage of some countries to others to produce biofuels,after Germany in 2006. such as favorable climate, lower labor costs and the greater avail- Worldwide biodiesel production grew by 43% between 2005 ability of land. Girard and Fallot [39] show that tropical countriesand 2007 despite slow growth within the EU, the traditional centerof biodiesel production [8]. This growth in other countries, espe- 5cially the US, led to a decline in the EU’s share of global biodiesel Exact ethanol trade statistics are difficult to gather since fuel and non-fuel ethanol typically share the same tariff and are reported together [8]. The share ofproduction, which had been more than 90% until 2004 to less than non-fuel ethanol in the international trade in ethanol is estimated to have dropped60% in 2007 [30,36]. In recent years, some countries outside Europe from 75% at the turn of the century to around 50e60% in recent years. Ethanol tradeand the US have begun to produce biodiesel. For example, Brazil statistics here refer to the total of fuel and non-fuel ethanol. Please cite this article in press as: Timilsina GR, Shrestha A, How much hope should we have for biofuels?, Energy (2010), doi:10.1016/ j.energy.2010.08.023
  • 4. 4 G.R. Timilsina, A. Shrestha / Energy xxx (2010) 1e15Table 1Biofuel production. Country Fuel ethanol Biodiesel Major feedstock Production (billion liters) Major feedstock Production (billion liters) 2004 2005 2006 2007 2008 2009 2004 2005 2006 2007 2008 2009 US Corn 13 15 18.3 24.6 34 41 Soybean 0.11 0.36 0.99 1.93 2.69 2.1 Brazil Sugarcane 15 15 17.5 19 27 26 Soybean 0.07 0.4 1.2 1.6 Germany Wheat 0.02 0.2 0.5 0.5 0.8 Rapeseed 1.18 1.9 3.02 3.28 3.2 2.6 France Sugar beet, wheat 0.1 0.15 0.25 1.2 0.9 Rapeseed 0.4 0.56 0.84 0.99 2.06 2.6 China Corn, sugarcane 2 1 1 1.8 1.9 2.1 Soybean, rapeseed 0.07 0.1 0.4 Argentina Sugarcane e e e 0.02 e e Soybean 0.21 0.85 1.4 Italy Cereals e e 0.13 0.13 0.1 Oilseeds 0.36 0.45 0.51 0.41 0.68 0.4 Spain Barley, Wheat 0.2 0.3 0.4 0.4 0.4 Oilseeds 0.01 0.08 0.11 0.19 0.24 0.6 India Sugarcane, wheat e 0.3 0.3 0.2 0.3 0.2 Soybean, rapeseed 0.03 0.02 0.1 Canada Wheat 0.2 0.2 0.2 0.8 0.9 1.1 Oilseeds 0.1 0.05 0.1 0.1 Poland Rye e 0.05 0.12 0.12 Rapeseed 0.11 0.13 0.09 0.31 Czech Republic Sugar beet e 0.15 0.02 e Rapeseed 0.07 0.15 0.12 0.07 0.12 Colombia Sugarcane e 0.2 0.2 0.3 0.3 0.3 Oil palm e e e e 0.1 0.2 Sweden Wheat e 0.2 0.14 0.14 Rapeseed 0.002 0.001 0.01 0.07 0.11 Malaysia e e e e e Oil palm 0.19 0.14 0.45 0.48 UK e e e e e 0.2 Rapeseed 0.01 0.06 0.22 0.17 0.22 0.5 Denmark Wheat e 0.1 e e Oilseeds 0.08 0.08 0.09 0.1 0.15 Austria Wheat e 0.1 e e 0.1 Oilseeds 0.06 0.1 0.14 0.3 0.24 0.2 Slovakia Corn e 0.1 e e Oilseeds 0.02 0.09 0.09 0.05 0.17 Thailand Sugarcane, cassava 0.2 e e 0.3 0.3 0.4 Oil palm 0.4 0.6 Australia Sugarcane 0.07 e e 0.1 e e e e e e e Belgium Wheat 0.2 Rapeseed 0.3 EU Various e e e 2.16 e e e e e e e World total 31 33 39 49.6 67 76 2.3 4.3 6.9 9.5 14.7 17Note: Ethanol figures do not include ETBE, a mixture of ethanol and isobutylene (petrochemical) used in low-concentration gasoline blends up to about 8e10% in fuels in partsof Europe, particularly France and Spain.Source: REN21 [25e28,135]; Renewable Fuels Association [29]; EBB [30]; EIA [31]; Pinzon [32]; Barros [33]; Hoh [34]; Joseph [35].have two to three times higher productivity when water scarcity is The growth of ethanol output in the US, derived mainly fromnot a factor. Johnston and Holloway [40] find that Malaysia and corn (maize), has been driven by fiscal incentives (e.g., tax,Indonesia are the two countries with the highest absolute biodiesel subsidies) and regulatory instruments (e.g., biofuel blendingproduction potential in the world (other developing countries, i.e., mandates) [41]. The Energy Policy Act of 2005 establishedArgentina, Brazil and the Philippines, also feature in the top ten) a Renewable Fuel Standard (RFS) program, which increases theand also the lowest average production costs per liter. Moreover, biofuel mandate to 36 billion gallons by 2022 from 9 billion gallonsmany countries may not be able to meet their biofuel targets and in 2008 [31]. The Farm Bill of 2008 introduced a tax credit of $1.01mandates with domestic production alone [15]. per gallon for cellulosic ethanol starting from 2009 [42]. The pre- existing tax credit for biodiesel of $1.00 was also extended (to the4. Biofuel policies and mandates end of 2009). In Brazil, the government mandates 20e25% ethanol blends in Biofuel programs have proliferated around the world in recent all regular gasoline sales and the use of ethanol in governmentyears, whether motivated by a desire to bolster agricultural vehicles. It also promotes the sale of flexible-fuel vehicles, whichindustries or achieve energy security or reduce GHG emissions or represent 85% of all auto sales in Brazil [27]. While ethanolimprove urban air quality. Table 2 lists biofuels blending mandates production in Brazil was supported through price guarantees andand timetables for their implementation (where available) around subsidies, as well as public loans and state-guaranteed private bankthe world. loans, during the industry’s development, it no longer receives any direct government subsidies [1]. However, it is still supported through policies such as the ban on diesel-powered personal World Biodiesel Production vehicles and one of the highest import tariffs on gasoline in the world. The EU Biofuels Directive of 2003 targets a 5.75% share of bio- fuels in transport energy by 2010, and 10% by 2020, prompting rapid growth in the production of biofuels [4]. Despite its higher production costs, biodiesel is sold for $0.18e$0.24 less per liter than conventional diesel in Germany due to the $0.59 tax exemption it enjoys there [43]. China has set a biofuel production target of 12 million tons6 for the year 2020, and it is projected that, depending on the types of feedstock, 5e10% of the total cultivated land in China would be needed to meet that target [44]. Thailand has established anFig. 2. World biodiesel production. REN21 [27, 138]; EBB [30]; EIA [31]; Pinzon [32]; 6Barros [33]; Hoh [34]; Joseph [35] All mentions of tons refer to metric tons. Please cite this article in press as: Timilsina GR, Shrestha A, How much hope should we have for biofuels?, Energy (2010), doi:10.1016/ j.energy.2010.08.023
  • 5. G.R. Timilsina, A. Shrestha / Energy xxx (2010) 1e15 5Table 2Biofuels targets and blending mandates. Country Biofuel targets Blending mandates Australia 350 million liters of biofuels by 2010 E2 in New South Wales, increasing to E10 by 2011; E5 in Queensland by 2010 Argentina E5 and B5 by 2010 Bolivia B2.5 by 2007 and B20 by 2015 Brazil E22eE25 existing (slight variation over time); B3 by 2008 and B5 by 2013 Canada E5 by 2010 and B2 by 2012; E7.5 in Saskatchewan and Manitoba; E5 by 2007 in Ontario Chile E5 and B5 by 2008 (voluntary) China 12 million metric tons E10 in 9 provinces of biodiesel by the year 2020 Colombia E10 and B10 existing Dominican Republic E15 and B2 by 2015 Germany 5.75% share of biofuels in transport E5.25 and B5.25 in 2009; E6.25 and B6.25 from 2010 through 2014 by 2010; 10% by 2020 India E5 by 2008 and E20 by 2018; E10 in 13 states/territoriesa Italy 5.75% share of biofuels in transport E1 and B1 by 2010; 10% by 2020 Jamaica E10 by 2009 Japan 20% of total oil demand met with biofuels by 2030; 500 million liters by 2010 Korea B3 by 2012 Malaysia B5 by 2008 New Zealand 3.4% total biofuels by 2012 Paraguay B1 by 2007, B3 by 2008, and B5 by 2009; E18 or higher (existing) Peru B2 in 2009; B5 by 2011; E7.8 by 2010 Philippines B1 and E5 by 2008; B2 and E10 by 2011 South Africa E8eE10 and B2eB5 (proposed) Thailand 3 percent biodiesel share by 2011; 8.5 million liters E10 by 2007 and B10 by 2012 of biodiesel production by 2012 United Kingdom E2.5/B2.5 by 2008; E5/B5 by 2010 United States 130 billion liters/year of biofuels nationally E10 in Iowa, Hawaii, Missouri, and Montana; E20 in Minnesota; B5 in New Mexico; by 2022; 3.4 billion liters/year by 2017 Pennsylvania E2 and B2 in Louisiana and Washington State; Uruguay E5 by 2014; B2 from 2008e2011 and B5 by 2012Source: REN21 [28]; USAID [4]; BNDES and CGEE [5]; Worldwatch [1]. a Poor sugarcane yields in 2003e2004 forced India to import ethanol to meet state blending targets. It has postponed broader targets until adequate domestic suppliesbecome available.ethanol program with a target of replacing all conventional gasoline feedstock, and sugar-based ethanol production costs in India arewith E10 gasohol (gasoline containing 10% by volume of ethanol) by around $0.44 per liter [1]. The IEA [16] foresees a reduction of one-2012 [45]. Other Asian countries such as India, Indonesia, Malaysia, third in the cost of ethanol by 2030 due to technologicalthe Philippines, Vietnam and Japan have all introduced blending improvements and lower costs of feedstock. However, thetargets, fiscal incentives, import tariffs or some combination increasing demand for ethanol due to mandates and targets, thethereof to promote biofuels, some of destined to be exported to impacts of the fuel vs. food debate on its supply, and recent trendsEurope to meet the EU’s ambitious targets [4]. of feedstock prices imply that the cost of ethanol may not drop down. Moreover, unless the price of oil is high, production of5. Cost and investment ethanol may not be competitive without substantial level of subsidies.5.1. Biofuel production cost The cost of cellulosic ethanol, which is still in demonstration stage, is high, typically about typically about $1.00 per liter on Aside from sugarcane based ethanol in Brazil, biofuels are not a gasoline-equivalent basis. Given the speed of technologicalpresently competitive without substantial government support if developments in an emerging field and uncertainty over the long-oil prices are below US$70 per barrel [15]. As more than half of the run costs of feedstock, projections of the future costs of lignocel-production costs of biofuels are dependent on the price of the lulosic ethanol differ substantially, but the IEA [46] notes that thefeedstock, reductions in cost are closely tied to the prices of feed- costs are anticipated to drop to $0.50 per liter in the long term.stock commodities. Significant technological progress will be necessary to make this happen: achievement of better ethanol concentrations before the5.1.1. Cost of ethanol distillation, lower costs for enhanced enzymes (resulting from According to the IEA [16], the costs of ethanol production in new biotechnological research) and improved separation techniques.plants in Brazil are the lowest in the world at $0.20 per liter ($0.30 There are some indications that this may be feasible. For example,per liter of gasoline equivalent). This subsequently declined even Brazil’s leading manufacturer of sugar and biofuel equipment,further to $0.18 per liter [1]. As compared to the cost of sugarcane Dedini SA, announced in May 2007 that it had devised a means tobased ethanol in Brazil, ethanol from grains costs 50% more in the produce cellulosic ethanol from bagasse on an industrial scale atUS and a 100% more in the EU. Transportation, and blending and below $0.41 per liter on a gasoline-equivalent basis [15]. Anotherdistribution costs can add some $0.20 per liter to the retail price. path to competitive lignocellulosic ethanol may be come from theMeanwhile, production costs for ethanol (previously from wheat, generation of valuable co-products in biorefinery, which could cutbut from sweet sorghum and cassava going forward) in China are the costs of feedstock. Hamelinck and Faaij [47] estimate produc-between $0.28 and $0.46 per liter, depending on the price of the tion costs of ethanol from the hydrolysis of cellulosic biomass to be Please cite this article in press as: Timilsina GR, Shrestha A, How much hope should we have for biofuels?, Energy (2010), doi:10.1016/ j.energy.2010.08.023
  • 6. 6 G.R. Timilsina, A. Shrestha / Energy xxx (2010) 1e15$0.63 per liter in the following 5e8 years, $0.37 per liter in 8e12 mills that produce ethanol as the primary output as opposed to wetyears, and $0.25 per liter in 13e20 years.7 mills, which are designed to manufacture products like maize oil, syrup and animal feed along with ethanol [16]. The ethanol5.1.2. Cost of biodiesel industry association in the US estimates construction costs in 2005 Generally, production of biodiesel from palm-oil costs around as follows: $0.40 per liter for a new dry mill plant, and $0.27 per$0.70 per liter, whereas biodiesel produced from rapeseed oil may liter for expansion of an existing plant [49].cost up to $1.00 per liter, with soybean diesel in between [16]. The Canada has six new ethanol plants with capacity of 0.7 billioncost of biodiesel production in China, mainly from used cooking oil, liters/year were under construction, while in Brazil, 80 new sugar-ranges from $0.21 to $0.42 [1]. The IEA [16] anticipates a decline in mills/distilleries were licensed in 2005 to augment the 300 alreadybiodiesel production costs of more than 30% in the US and EU in operation, as part of a national plan to raise sugarcane produc-between 2005 and 2030 along with a decline of feedstock costs. tion by 40 percent by 2009 [26]. Most of the refineries in Brazil areHowever, the prices of biodiesel feedstocks have been moving in in the center and south of the country, where sugar yields arethe other direction for the most part since the IEA’s estimates were highest, and about 250 separate producers, mostly grouped intoproduced. two associations comprising 70% of the market [16]. The average Substantial research is also being dedicated to lowering the capacity of ethanol plants in the US is three times greater than thecosts of producing diesel from biomass using the FischereTropsch average capacity of those in Brazil; the largest corn dry-millingprocess, most of which concentrate on the use of heat or chemicals, plant in the US produces 416 million liters per year whereas therather than microbes, to break down the biomass. Although the largest plant in Brazil produces 328 million liters per year byFischereTropsch process permits higher yields per hectare than crushing sugarcane [1]. While there may be a number of reasons forcurrent biodiesel production, production cost for large-scale plants the difference in capacities, chief among them is the fact that har-is estimated to be about $0.90 per liter of diesel equivalent in the vested corn can be stored for an extended period of time, unlikenear term and expected to fall to $0.70e0.80 in the medium term sugarcane, which needs to be processed soon after harvest so that[46]. While micro-algae is projected as a future source for biodiesel, the sugar will not deteriorate. Elsewhere, China reversed its deci-production cost is still extremely high, in the range of US$2eUS$22 sion to invest in facilities to produce more ethanol from grain onper liter [48]. Making algae a viable commercial option will require account of its food policies in 2006, and has instead targeted cas-further improvements in genetic and metabolic engineering to sava and sweet potatoes as feedstocks for future increases inproduce higher yielding and hardier strains. Although economies of ethanol production [50]. South Africa, which exports ethanol to thescale in production could lower the cost, it is challenging to EU, is building a pilot 500-kilolitre per year ethanol plant [16].increase the yield to a level that ensures micro-algae based bio- Like the fuel ethanol industry, the biodiesel industry also grewdiesel is competitive with other biodiesel technologies. Neverthe- rapidly (more than three fold in the EU between 2004 and 2006),less, the feasibility of biodiesel production from micro-algae can be adding four billion liters/year and an estimated $1.2 billion ofexpedited if large-scale production facilities can be integrated with investment, to bring operating capacity to over 6 billion liters perother processes, such as wastewater treatment and utilization of year. Biodiesel Production, a part of the German group Sauter,carbon dioxide from power plants [4]. invested 50 million euros in 2004 to establish a biodiesel production plant with a capacity of 250,000 tons in Cartegena, Spain, while5.2. Investments in capacity Ibserol, a subsidiary of the German food group Nutas, invested 25 million euros in a biodiesel facility (100 ton capacity) that was to New financial investment in biofuels, i.e., total investment less begin production in Portugal in 2005 [25]. Biodiesel productioncorporate and government research and development and small- capacity is also rising swiftly in the United States. The 44 new plantsscale projects, amounted to a $18 billion in 2008, and an emerging under construction in 2005 were expected to double the existingcomponent of venture capital investment went to cellulosic capacity of 1.3 billion liters of the 53 operating plants [26]. Brazil isethanol, estimated at more than $350 million in 2008 [28,136]. using soybean oil as a feedstock to expand production of biodiesel inHowever, financial investment biofuels declined dramatically to $7 the Center West to replace petrolediesel traditionally trucked inbillion in 2009, with prospective project developers struggling to from the coast, and Argentina is expanding biodiesel production fromsecure credit and investors reluctant to invest in a sector recently soybean oil for the export market, while Canada is using rapeseed oilplagued by high feedstock prices and over-capacity in 2007e2008. to increase biodiesel production in the Prairie Provinces [50].The single largest investment was Nestle’s V670 million biodiesel In Asia, Malaysia aims to capture 10% of the global biodieselplant near Rotterdam, Netherlands. market by 2010 [27]. However, of the 92 licenses were approved for Biofuels production plants under construction and announced biodiesel facilities in 2006 and 2007, only 14 facilities were built, ofconstruction through 2008 were valued in excess of $2.5 billion in which eight are now operating, producing at less than 10 percent ofthe United States, $3 billion in Brazil, and $1.5 billion in France [27]. total capacity due to the high cost of palm oil [51]. Similarly, IndonesiaIn the case of traditional or first-generation ethanol, North America planned to expand palm-oil plantations by 1.5 million hectares byand Brazil exhibit rapid expansion in capacity. In the US, 2008 for a total of 7 million hectares under palm cultivation. Existingconstruction of 12 new ethanol plants was completed in 2004, biodiesel facilities and those under construction in China will deliverraising the total to more than 80. Construction was begun on an 3% of China’s expected diesel consumption by 2010, i.e., annualadditional 16 in the same year, representing production capacity of capacity of about 2 million tons [1]. However, RaboBank has warned2.6 billion liters per year and an estimated $1 billion of investment of a surplus capacity of 1 million MT in Asia by 2010 [4].[25]. At the end of 2005, 95 operation ethanol plants were in Investments in jatropha plantations are surging in Africa, India,existence in the US with a capacity of 16.4 billion liters per year, and Indonesia and China [52]. India’s stated target of 20 percent biofuelconstruction of 35 new plants ($2.5 billion of investment) and by 2011 will demand 13 million hectares of jatropha plantations,expansion of 9 existing ones, i.e., additional capacity of 8 billion and BP is funding a $9.4 million project there to investigate itsliters per year, were underway in 2006 [26]. Most of these are dry potential. Indonesia plans to plant 1.5 million hectares of jatropha by 2010, while the Chinese forestry administration, in March 2007, announced its intention to develop 13 million hectares of trees with 7 Production costs per liter of ethanol, not per liter of gasoline equivalent. high oil content, including jatropha. Please cite this article in press as: Timilsina GR, Shrestha A, How much hope should we have for biofuels?, Energy (2010), doi:10.1016/ j.energy.2010.08.023
  • 7. G.R. Timilsina, A. Shrestha / Energy xxx (2010) 1e15 7Table 3Impacts of increased biofuel production on food prices. Study Coverage & key assumptions Key impacts of biofuels on food prices Baier et al. [63] 24 months ending June 2008; historical crop Global biofuel production growth responsible for 17%, 14% price elasticities from academic literature; and 100% of the rises in corn, soybean and sugar prices, bivariate regression estimates of indirect effects respectively, and 12% of the rise in the IMF’s food price index. Banse et al. [64] 2001e2010; Scenarios: reference Price change under reference scenario, 5.75% blending, (without mandatory biofuel blending), and 11.5% blending, respectively: EU 5.75% mandatory blending, EU 11.5% mandatory blending Cereals: À4.5%, À1.75%, þ2.5%; Oilseeds: À1.5%, þ2%, þ8.5%; Sugar: À4%, À1.5%, þ5.75% Lazear [65] 12 months ending March 2008 US ethanol production increase accounted for 20% of the rise in corn prices. IMF [66] Estimated range covers the plausible values Range of 25e45% for the share of the rise i for the price elasticity of demand n corn prices attributable to ethanol production increase in the US. Collins [62] 2006/07e2008/09; Two scenarios considered: Under the normal scenario, the increase (1) normal and (2) restricted, in ethanol production accounted for 30% with price inelastic market demand and supply of the rise in corn price; Under the restricted scenario, ethanol could account for 60% of the expected increase in corn prices. Glauber [67] 12 months ending April 2008 Increase in US biofuels accounted for about 25 percent of the rise in corn prices; US biofuels production accounts for about 10 percent of the rise in global food prices IMF global food commodity price index. Lipsky [68] and Johnson [69] 2005e2007 Increased demand for world biofuels accounts for 70 percent of the increase in corn prices. Mitchell [58] 2002emid-2008; ad hoc methodology: impact of movement 70e75 percent of the increase in food commodities prices in dollar and energy prices on food prices estimated, was due to world biofuels and the related consequences residual allocated to the effect of biofuels. of low grain stocks, large land use shifts, speculative activity and export bans. Abbott et al. [70] Rise in corn price from about $2 to $6 $1 of the $4 increase in corn price (25%) due per bushel accompanying the rise to the fixed subsidy of 51-cents per gallon of ethanol. in oil price from $40 in 2004 to $120 in 2008 Rosegrant [71] 2000e2007; Scenario with actual increased Increased biofuel demand is found to have accounted biofuel demand compared to baseline scenario for 30 percent of the increase in weighted average grain prices, where biofuel demand grows according 39 percent of the increase in real maize prices, 21 percent to historical rate from 1990 to 2000 of the increase in rice prices and 22 percent of the rise in wheat prices. Fischer et al. [72] (1) Scenario based on the IEA’s WEO 2008 projections; Increase in prices of wheat, rice, coarse grains, protein feed, (2) variation of WEO 2008 scenario other food, and non-food, respectively, with delayed 2nd gen biofuel deployment; compared to reference scenario: (3) aggressive biofuel production target scenario; (1) þ11%, þ4%, þ11%, À19%, þ11%, þ2%; (4) and variation of target scenario (2) þ13%, þ5%, þ18%, À21%, þ12%, þ2%; with accelerated 2nd gen deployment (3) þ33%, þ14%, þ51%, À38%, þ32%, þ6%; (4) þ17%, þ8%, þ18%, À29%, þ22%, þ4% Research and development (R&D) investments on advanced 6. Impacts of biofuels on food pricesbiofuel technologies are also substantial in several countries. TheUS Department of Energy (DOE) is investing more than $400 Expenditures on food amount to a large part of the budget of themillion to lower the cost of second-generation biofuels though poorest households, and so rising food prices threaten them witha directed research program, and has also approved 6 projects for food insecurity, which is the lack of secure access to enough safe andup to $385 million in funding as part of the demonstration program nutritious for normal growth and development and for an active,[53]. While no commercial scale lignocellulosic ethanol plants are healthy life [6]. The FAO [57] estimates that there were already 923operational as of early 2008, around 15e20 companies, mostly in million undernourished people worldwide, and rapid growth inthe US, are involved in pilot plant studies with different biotech- biofuel production, which is a significant source of demand for somenological and thermo-chemical biomass conversion routes [8]. agricultural commodities, such as sugar, maize, cassava, oilseeds andWith the efforts of the industry and strong support from the DOE, palm oil, has the potential to affect food security at both the nationalthe first commercial lignocellulosic plant, may be operational in the and household levels mainly through its impact on food prices.US in 2012. Some studies criticize biofuels as one of the factors responsible In Europe, a company funded by DaimlerChrysler, Volkswagen for the 2008 food crisis.8 These studies concur that the diversion ofand Royal Dutch Shell has been operating a demonstration plant the US corn crop to biofuels is the strongest demand-induced forcefor the production of biodiesel from wood wastes via the gasifi-cation/FischereTropsch pathway in Freiberg since 2003. Thetechnology is being developed to reach the pre-commercial stagewith a capacity of 13,000 tons of biomass-to-liquid per year, andeventually for a commercial facility capable of delivering 200,000 8 Other factors include strong income growth and subsequent demand for meattons per year [54]. Other gasification/FischereTropsch schemes are products and feed grains for meat production in emerging economies, such asalso being tested in Europe, and biodiesel from this technology is China and India [59]; adverse weather conditions, such as the severe drought in Australia [6]; the devaluation of the US dollar, growth in foreign exchange holdingsexpected to reach markets in the next decade [55]. The RFA [56] by major food-importing countries, and protective policies adopted by someconcludes that commercial scale plants are unlikely in the EU exporting and importing countries to suppress domestic food price inflation [50];before 2018. lower level of global stocks of grains and oilseeds [60] and increased oil prices [61]. Please cite this article in press as: Timilsina GR, Shrestha A, How much hope should we have for biofuels?, Energy (2010), doi:10.1016/ j.energy.2010.08.023
  • 8. 8 G.R. Timilsina, A. Shrestha / Energy xxx (2010) 1e15on food prices, given that the US accounts for about one-third of Institute (IFPRI) finds price increases for maize of 23e72%, wheat ofglobal maize production and two-thirds of global exports [58].9 An 8e30%, oilseeds of 18e76%, and sugar of 11.5e66%, in response toestimated 93 million tons of wheat and coarse grains, more than countries implementing the plans they have announced for bio-half of the growth in wheat and coarse grain use during the period, fuels by 2020 [74]. Trostle [50] projects price rises of 65%, 64%, 33%were used for ethanol production in 2007, double the level of 2005 and 19%, for maize, sorghum, wheat and soy oil, respectively, due to[11]. Most of this growth comes from the United States of America the expansion of biofuels, rising energy costs and demand fromalone, where the use of maize for ethanol grew to 81 million tons in emerging economies. Moreover, should biofuel production be2007 and is expected to rise by another 30 percent in 2008 [57]. frozen at 2007 levels for all countries and for all crops used asMoreover, Collins [62] attributed 52% of the increase in soybean oil feedstock, maize prices can be expected to decline by 6 percent byuse between 2005/06 and 2007/08 to biodiesel production. Table 3 2010 and 14 percent by 2015, along with lesser price reductions forsummarizes the recent literature on the impacts of increased bio- oil crops, cassava, wheat, and sugar [71]. If a global moratorium onfuel production on food prices. crop-based biofuel production is imposed from 2007 onwards, by Baier et al. [63] estimate that the increase in worldwide biofuels 2010, prices of key food crops would drop even further: by 20production over the two years ending June 2008 accounted for percent for maize, 14 percent for cassava, 11 percent for sugar, and 8almost 17 percent of the rise in corn prices and 14 percent of the percent for wheat.rise in soybean prices. More specifically, they attribute nearly 14 Taheripour et al. [75] emphasize the importance of including by-percent of the rise in corn prices and nearly 10 percent of the rise in products when modeling the impact on non-energy commoditysoybean prices to the increase in US biofuels production, whereas prices of expanded biofuel production in response to US and EUEU biofuels production growth accounted for roughly 2 percent of biofuel mandates. They show that the price of coarse grainsthe increase in the price of these crops. In addition, the increase in increases sharply in the US, EU, and Brazil by 22.7%, 23.0%, andEU biofuel production was responsible for around 3 percent of the 11.9%, respectively, over the period 2006e2015; once by-productsincrease in the price of barley. In the case of sugar, they find that the are incorporated into the model, the price of coarse grains exhibitsgrowth of sugar-based ethanol production in Brazil accounted for significantly lower growth rates of 14%, 15.9%, and 9.6%, respec-the entire escalation of the price of sugar over the same timeframe. tively. The inclusion of by-products reduces the price rise of Although individual crop prices appear to be affected by bio- oilseeds in the EU from 62.5% to 56.4% in the same period. Thefuels, the impact of biofuels on global or aggregated food prices is prices of most other agricultural commodities grow at a slightlyrather small. Worldwide biofuels production growth over the two lower rate when by-products are accounted for.years ending June 2008 is estimated to account for a little over 12 Fischer et al. [72] model the prices of food staples in 2020 andpercent of the rise in the IMF’s (International Monetary Fund’s) 2030 under several different scenarios for biofuel production.food price index, of which, roughly 60%, 14% and 15% can be attri- Under a scenario based on the International Energy Agency’s Worldbute to increased biofuels production in the US, Brazil and the EU Energy Outlook 2008 projections, price increases for both cerealsrespectively [63]. This means that about 88% of the rise in global and other crops in 2020 are about 10 percent higher compared tofood prices is caused by factors other than biofuels. a reference scenario where biofuel development after 2008 is kept Banse et al. [64] show that if the mandatory 5.75% biofuel constant at the 2008 level. Since the contribution of second-blending in EU member states is implemented, it would cause real generation biofuels is still small in 2020, a variation of this scenario,prices of cereals, oilseeds and sugar in 2010 to be 2.75%, 3.5% and featuring delayed introduction of second-generation technologies,2.5% higher than that in the reference scenario. In the case of the only results in moderate further crop price increases. In the moreimplementation of mandatory 11.5% biofuel blending, the corre- aggressive target scenario, based on the mandates and targetssponding price changes would be 7%, 10% and 9.75% (see Table 3). announced by several developed and developing countries, theRosegrant [71] shows that increased biofuel demand accounted for impact of increased biofuel production on crop prices is much more30 percent of the increase in weighted average grain prices in significant: prices rises of about 30 percent. When the target2000e2007 compared to the historical baseline. More specifically, scenario is modified to incorporate the accelerated introduction ofincreased biofuel demand is estimated to account for 39 percent of cellulosic ethanol, the price impact on cereals is cut in half to aboutthe increase in real maize prices, whereas it is estimated to account 15 percent. Because of the high targets in developing countries,for 21 percent of the increase in rice prices and 22 percent of the which feature a higher share of biodiesel and somewhat slowerrise in wheat prices. deployment of second-generation technologies, the price impact Some of the rises in food commodity prices are not caused by on non-cereal crops (especially vegetable oils) is greater than thatmarket forces, such as the price of gasoline, pertaining to biofuels, on cereals.but rather by policy induced demand growth. McPhail et al. [73] In addition to the impacts on food price, Fischer et al. [72] alsoargue that the elimination of federal tax credits and tariffs, and to examine the impact of expanded biofuel production on food supply.a far lesser extent, mandates, in the US would reduce ethanol The additional global demand for cereal commodities for ethanolproduction by 18.6 percent, resulting in the decline of the price of production in 2020 in the various scenarios they examine rangescorn by 14.5 percent. However, if gas prices are high enough, i.e., $3 from around 100 million tons to 330 million tons. However, higherper gallon or higher, biofuel production may be profitable without agricultural prices also lead to increased production, particularly insupport policies; ethanol production can be expected to rise from developed countries, along with reductions in the use of cereals forthe current levels of 6.5 billion gallons to 14 billion gallons, and animal feed. The remainder of the additional demand for cereals forcorn price would remain at about $4 a bushel. biofuel production is met by reduced food use, most of it in The existing literature not only assesses the impacts of biofuels developing countries. Nevertheless, even in the worst case, theon the 2007e2008 food crisis but also projects the impacts on food reduction in global cereal food consumption is about 29 millionprices in the future. The International Food Policy Research tons, which only constitutes a 1% decline in from the global cereal consumption of 2775 million tons in the reference case where biofuel production is frozen at 2008 levels. 9 The expansion of maize area in the US by 23% in 2007 entailed the contraction One interesting observation from the existing literature is thatof soybean area by 16%, leading to lower soybean output and playing a part in the the magnitude of the impacts of biofuels on food prices is very75% rise in soybean prices from April 2007 to April 2008. much sensitive to the models used to assess those impacts. Partial Please cite this article in press as: Timilsina GR, Shrestha A, How much hope should we have for biofuels?, Energy (2010), doi:10.1016/ j.energy.2010.08.023
  • 9. G.R. Timilsina, A. Shrestha / Energy xxx (2010) 1e15 9equilibrium models (e.g., [50,71,74]), which model the food and cases) up to more than 50% savings compared to fossil gasoline.agricultural sector in isolation, ignoring this sector’s interaction Farrell et al. [77] report that corn-based ethanol, in the US, couldwith other sectors of the economy, find higher impacts on food reduce only 13% GHG emissions because the production process isprices. On the other hand, general equilibrium models, which so energy intensive.10 EBAMM [78] finds that corn-basedaccount for interactions of various sectors and agents (e.g., [64,72]) ethanol delivers net emission savings of only 130 kg CO2eq/m3 offind the impacts to be relatively small. ethanol, almost 15 times less than that delivered by sugarcane ethanol. Despite this poor GHG balance, corn-based ethanol7. Environmental impacts of biofuels occupies the largest share of the global biofuels market (as of 2007) due to vast US production [8]. However, more recent studies (e.g.,7.1. Impacts on climate change mitigation [79]) shows that the reduction potential could be significantly improved to 48e59% through enhanced yields and crop manage- Biofuels replace fossil fuels, thereby avoiding associated GHG ment, biorefinery operation, and co-product utilization.11emissions. However, a large-scale expansion of biofuels could cause Of biodiesel from first-generation feedstocks, biodiesel fromthe release of GHG emissions to the atmosphere through land-use palm oil is generally considered to yield the most substantial GHGchange as farmers might clear existing forests to meet increased savings, typically in the range of 50e80 percent [6]. However,crop demand to supply food and feedstock for biofuels. The climate estimates of GHG savings from biodiesel from palm oil are espe-change mitigation potential through fossil fuel replacement varies cially prone to understating the full GHG impacts since palmacross types of feedstock, depending on feedstock production plantations in South East Asia often replace tropical forest orprocess/technology (e.g., usage of nitrogen fertilizer) and fossil fuel peatland, resulting in the release of tremendous amounts of CO2consumption in both production of feedstocks and subsequent from those natural reservoirs. Biodiesel both derived fromconversion to biofuels. For example, useful heat and electricity may sunflower and from soybean delivers significant GHG savings, butbe cogenerated along with liquid fuel in some biofuel production a wide range of values is found in the literature, depending on thesystems, and plants differ in their use of fossil inputs or residual different assumptions used in each study, particularly in the case ofplant materials like straw for process energy [72]. Even for a partic- soybean biodiesel. Whereas emission savings from biodiesel basedular feedstock, standard life-cycle analyses (LCA) of biofuels in the on sunflower appear to converge around 60e80%, the emissionliterature exhibit a wide range in terms of the overall reduction in savings from soybean biodiesel tend to be around 50e70%. TheGHG emissions due to varying underlying assumptions on system wide variation in values is explained by the disparity in agriculturalboundaries, co-product allocation, and energy sources used in the yield across regions, the assumptions made regarding the alloca-production of agricultural inputs and feedstock conversion to bio- tion of glycerin (an important co-product from the manufacture offuels. Nevertheless, most studies show that biofuels do yield some soybean biodiesel), as well as the type of chemicals and processemission reductions relative to their fossil fuel counterparts when energy utilized [80]. Another important feedstock for biodiesel isemissions from the direct or indirect land-use changes brought rapeseed, and a large number of studies have analyzed the GHGabout by biofuel feedstock production are excluded. impacts of biodiesel from rapeseed. GHG savings from rapeseed- Based on life-cycle assessments, ethanol from sugarcane in based biodiesel typically range 40e60 percent [16].Brazil is found to deliver the greatest reductions in GHG emissions. The rosy picture of the GHG savings potential of biofuelsThis is due to high yields and the use of sugarcane waste (i.e., disappears once the release of carbon stored in forests or grasslandsbagasse) for process energy as well as for the cogeneration of during land conversion to crop production is taken into account.12electricity [76]. The 25% ethanol blending mandate (E25) was Several studies find that if emissions related to land-use changecalculated to reduce 1.87 ton of CO2eq for each cubic meter ethanol caused by biofuel expansion are included, the emissions would beused in 2005/2006 in Brazil. OECD [8] estimates that sugarcane so high that it would take tens to hundreds of years to offset thoseethanol reduces GHG emissions by 90% as compared to an equiv- emissions through the replacement of fossil fuels. The number ofalent amount of gasoline. The next best are second-generation years required to offset GHG released from land conversion by thebiofuels from cellulosic feedstocks, which have yet to become emission reduction through the replacement of fossil fuels withwidespread commercially, with typical life-cycle GHG reductions in biofuels is also known as the ‘carbon payback period’ (see e.g.,the range of 70e90% relative to gasoline or diesel [16]. Numerous [81e83]). Fargione et al. [81] estimate that it would take 48 years tostudies anticipate that advanced biofuels could dramatically reduce repay if Conservation Reserve Program land is converted to cornlife-cycle GHG emissions compared to first-generation biofuels ethanol production in the US; over 300 years to repay if Amazonianbecause of higher energy yields per hectare and energy for pro- rainforest is converted for soybean biodiesel production; and overcessing available from the left-over parts of the plants (mainly 400 years to repay if tropical peatland rainforest is converted forlignin), similar to the use of bagasse in ethanol production in Brazil palm-oil biodiesel production in Indonesia or Malaysia. Similarly,today [6]. Some studies indicate that the savings could approach Danielsen et al. [82] estimate that 75e93 years of biofuel use wouldand even exceed 100% in cases, such as where the cogeneration of be necessary for the carbon savings to make up for the carbon lostelectricity displaces coal-fired electricity from the grid [15]. Simi- via forest conversion, varying upon how the forest is cleared. Theylarly, syndiesel production via gasification with FischereTropsch also estimate that the conversion of peatland would require moreprocessing can supply GHG savings of close to 100% or even higher than 600 years to yield GHG savings, whereas cultivation of oil palmthan regular diesel when including credits from the surplus on degraded grassland could produce GHG savings within 10 years.renewable electricity that is produced [56]. Searchinger et al. [83] argue that a decline in US corn exports Ethanol from sugar beets offers life-cycle GHG reductions of due to the diversion of corn to increase ethanol output by 56roughly 40e60% [16], putting it in the middle of the pack amongstbiofuels, while ethanol produced from wheat generates slightlylower GHG reductions of 30e55% [72], although there is consid- 10 The energy inputs comprise almost 80% of the energy output.erably more variation in the values for wheat in the literature, from 11 It could be increased to 67% in the case of an advanced closed-loop biorefineryas low as 18% to as high as 90%. Ethanol from maize generates the with anaerobic digestion.smallest reductions of GHG, and its performance is most variable, 12 Note however that converting degraded savannas for sugarcane production, orwith results ranging from zero savings (even negative in some jatropha cultivation, may increase below-ground carbon stocks (Fischer et al., [72]). Please cite this article in press as: Timilsina GR, Shrestha A, How much hope should we have for biofuels?, Energy (2010), doi:10.1016/ j.energy.2010.08.023
  • 10. 10 G.R. Timilsina, A. Shrestha / Energy xxx (2010) 1e15billion liters above projected levels in 2016 will encourage other than biofuels. Amatayakul and Berndes [45] estimate the annualcountries to increase corn production. If the new production average cost of the substitution of gasoline with ethanol in Thailandoccurs on land that was previously forest or grassland, 167 years of to be 25e195 US$/tCO2eq which is much higher than the price ofuse of ethanol from maize in the US will be necessary to offset the project-based certified emission reductions traded during 2006;emissions from this indirect land-use change. Even second- this would be, however cheaper than the cost of substitution ofgeneration biofuels are not attractive from this perspective. For fossil fuels with biofuels in Europe.example, if switchgrass is grown for biofuels on U.S. corn lands,the ensuing indirect land-use change would have a carbon 7.2. Biofuels and local air qualitypayback period of 52 years and would increase emissions over 30years by 50%. Hertel et al. [84], in a general equilibrium study, find In most urban areas, road transport is the primary source ofthe indirect land-use change caused by the escalation of US maize particulate matter (PM10) and emissions from fuel combustion,ethanol production to satisfy the 2015 mandated level of 56.7 which poses an important public health concern [89]. Thebillion liters to be two-fifths of that estimated by Searchinger et al. replacement of fossil fuels with biofuels for transportation has the[83]. Their estimate of the emissions resulting from this indirect potential to reduce local air pollution in several ways. First, apartland-use change amounts to one-fourth of that calculated by from rapeseed-based biodiesel, biofuels generally cause lessSearchinger et al. [83].13 When combined with the direct emis- primary PM10 and volatile organic chemicals (VOCs) than fossilsions from US maize ethanol production, this corresponds to fuels.14 Many studies can be found in the scientific literature ona carbon payback period of 28 years. exhaust emissions of biodiesel or biodiesel blends. Second, Using an engineering technique, Fritsche and Wiegmann (2008) compared to their fossil fuel counterparts, biodiesel does notcompare GHG balances for biofuels that includes the effect of direct produce sulfur emissions, while ethanol substantially lowers sulfuras well as well as indirect land-use change on emissions. They emissions, and both emit far less lower carbon monoxide (CO),found that, if emissions related to land-use change are ignored, which are two major threats to local air quality [4,91].biofuels could reduce 49e90% GHG emissions depending upon the However, biofuels, particularly biodiesel, generate up to 70%type of feedstock. On the other hand, if emissions from land-use higher NOx emissions (and could also raise concentrations of NO2-change are considered, total GHG emissions would increase by based secondary PM10), depending on feedstock, which enables1e102%. Fischer et al. [72] estimate net GHG savings under various ozone formation in conjunction with VOCs and other pollutantsscenarios for the deployment of biofuels using a general equilib- [92]. Most studies show a slight increase in NOx and a reduction ofrium approach to capture emissions from land-use change. Since PM when diesel is replaced with biodiesel [93e95]. However, if thethe carbon losses from land-use change are incurred at the time of objective is the improvement of local air quality, the performance ofland conversion, while greenhouse gas savings from the substitu- biodiesel should also be compared to fuels other than fossil dieseltion of biofuels for fossil fuels accrue gradually over time, the net that are currently available. Russi [96] compares the average tail-GHG savings resulting from the first-generation biofuels would not pipe NOx, PM and VOC emissions of a medium-sized passenger carbe positive in the first 20 years in any of the scenarios they running on different biodiesel blends with premium unleadedconsidered. It would take 50 years to achieve a sizable savings of petrol, liquefied petroleum gas (LPG) and compressed natural gasGHG emissions from large-scale deployment of biofuels. (CNG). It shows that far greater reductions in NOx and PM can be Some studies evaluate the attractiveness of biofuels as a GHG achieved by shifting from diesel to other readily available fossilmitigation option. A rough, indicative calculation by the OECD fuels than by switching to biodiesel blends [96]. Even though bio-projects that lowering GHG through policy support to biofuels in diesel can deliver better performance in terms of VOC than LPG,the US, Canada, and Europe in 2013e2017 would cost taxpayers and a 20% blend is necessary to surpass the performance of premiumconsumers on average between USD 960 and 1700 per ton of CO2- unleaded petrol and pure biodiesel is required to exceed theequivalent avoided [8]. Righelato and Spracklen [85] find that performance of CNG. These levels of blending are unlikely to beemission reductions through biofuels would be less attractive viable on a large scale.economically as compared to afforestation in pasture land. Simi- Jacobson [97] shows that a broad displacement of gasoline withlarly, Danielsen et al. [82] suggest that reducing deforestation may high ethanol blends in the US would lead to greater emission ofbe a more effective climate change mitigation strategy than the use local air pollutants and negative health impacts from deterioratingof biofuels. Tax credits for ethanol production tend to encourage an air quality. Moreover, the cultivation of biofuel feedstocks can alsooverall increase in vehicle miles traveled and a delay in the adop- affect local air quality through fugitive emissions of air pollutants.tion of more fuel-efficient cars, which can lead to greater GHG The frequent burning of cleared vegetation for biofuel production,emissions, while binding mandates, by pushing fuel prices up, may as practiced in Brazil, Indonesia and Malaysia for example, causesproduce some GHG reductions from reduced vehicle miles traveled severe smog and has adverse effects on human morbidity andand increases in fuel economy [86]. Tollefson [87] asserts that an mortality [98]. In addition, palm-oil production may result in theimprovement of one mile per gallon in average US vehicle fuel fugitive emission of methane from water surfaces and liquid pro-efficiency may decrease GHG emissions the same as all current cessing wastes [99].United States ethanol production from maize. Doornbosch andSteenblik [15] estimate that GHG mitigation costs of US ethanol 7.3. Impacts on biodiversity and ecosystemsbased on corn and EU ethanol based on sugar beet and corn wouldbe as high as US$500/tCO2 and US$4,520/tCO2 respectively. Simi- The effect of biofuel production on biodiversity depends on thelarly, Enkvist et al. [88] find that energy efficiency improvement in type of land utilized. If degraded lands are restored for biofuelheating and air-conditioning systems would be cheaper by V40 feedstock production, the impact could be positive. On the other hand, if peatlands are drained or natural landscapes are converted to biofuel plantations, the effect is generally negative. Since many 13 Hertel et al. [84] estimate the associated CO2 emissions at 800 g of CO2 per MJ,or 27 g per MJ per year over 30 years of ethanol production, while Searchinger et al. 14[83] estimated about 3000 g of CO2 per MJ, or around 100 g per MJ if allocated over A recent study in Thailand, however, found that biofuel in motorcycles could30 years. produce slightly higher VOC emissions than gasoline [90]. Please cite this article in press as: Timilsina GR, Shrestha A, How much hope should we have for biofuels?, Energy (2010), doi:10.1016/ j.energy.2010.08.023
  • 11. G.R. Timilsina, A. Shrestha / Energy xxx (2010) 1e15 11current biofuel crops are especially suited for cultivation in tropical measures, will result in a significant loss of nitrogen and phos-areas, biofuel expansion could convert natural ecosystems in phorous to water. Runge and Senauer [114] warn that thetropical countries that are biodiversity hotspots into feedstock displacement of maizeesoybean rotations with continuous maizeplantations [100]. Ogg [101] points out that European biofuel cultivation for ethanol production in the United States will havesubsidies are major drivers of rainforest loss in Indonesia, the negative consequences: the ensuing runoff from additionalsource of the lowest cost vegetable oil (palm) in the world [121]. nitrogen fertilizer application will compound problems, such asThe expansion of oil palm plantations, for example, which do not eutrophication in the “dead zone” in the Gulf of Mexico.require much fertilizer or pesticide, can trigger the loss of rain- Biofuels also affect soils both positively and negatively. Conver-forests and the biodiversity in them. Koh and Wilcove [102] esti- sion of forest to plantations may lead to the loss of soil carbonmate that half of oil palm plantations expanded in Malaysia and [115,116], but growing perennials, such as oil palm, sugarcane,Indonesia replaced natural forests. Similarly, more than 60% of switchgrass, instead of annuals crops could increase soil cover andBrazil’s sugarcane cultivation is done in the Mata Atlantica region, organic carbon levels. The impacts differ with crop type, soil type,one of the foremost biodiversity hotspots in the world, and sugar- nutrient demand and land preparation necessary. Sugarcanecane and soybean production are contributing to the clearing of the generally has less of an impact on soils than rapeseed, maize andCerrado, the world’s most biodiverse savannah [4]. Nelson and other cereals because soil fertility is maintained in sugarcane culti-Robertson [103] find that areas rich in bird species diversity could vation by recycling nutrients from sugar-mill and distillery wastesbe at risk from the expansion of agricultural lands in Brazil. Large- [16]. However, the diversion of agricultural residues, such asscale expansion of biofuels could result in loss of agro-biodiversity bagasse, as an energy input to biofuel production reduces thedue to the intensification of agriculture through mono-cropping amount of crop residues available for recycling, which could degradesince most biofuel feedstock plantations rely on a single species [6]. soil quality, and soil organic matter in particular [117]. Hill et al. [118]The Royal Society [104] highlights the vulnerability of grasses used explain that soybean production for biodiesel in the US requires faras biofuel feedstocks, such as sugarcane, to new pests and diseases. less fertilizer and pesticide per unit of energy produced than maizeThese pests and diseases have the potential to destroy the crop and production for ethanol, and that both feedstocks fare poorly inspread into natural habitats [105]. comparison to second-generation feedstocks such as switchgrass, Second-generation biofuels present another set of problems: woody plants or diverse mixtures of prairie grasses and forbs.some of the promising feedstocks are classified as invasive species, Finally, the IEA [16] states that perennial lignocellulosic crops suchwhich will require proper management in order to avoid unin- as eucalyptus, poplar, willow or grasses can be grown on poor-tended consequences [6]. In addition, many of the enzymes quality land, increasing soil carbon and quality, with less-intensivenecessary to process the feedstock would also have to be carefully management and fewer fossil-energy inputs.contained in industrial production processes as they have beengenetically modified to improve their efficiency [106]. However, 8. Impact of biofuels on land usethere is also some evidence to suggest that biodiversity can beenhanced and ecosystem functioning restored by biofuel feed- The demand for land to produce biofuels augments the tradi-stock cultivation when it consists of the introduction of new tional demands of agriculture and forestry. Moreover, global pop-perennial mixed species to degraded or marginal areas [100]. ulation growth as well as rising per capita consumption ofTilman et al. [107] use experimental data from test plots on developing countries can be expected to increase demand for landdegraded and abandoned soils to demonstrate that, compared to for food supply in the future. While some of this demand may bemaize ethanol or soybean biodiesel, low-input high diversity met with improved crop yields per unit area, which has beenmixtures of native grassland perennials yield higher net energy increasing at about 1.5% in recent decades for staple crops, thisgains, greater GHG emission reductions and less agrichemical would only increase production by 40% by 2030, requiringpollution, and that this performance is positively correlated to the a conservatively estimated 500 Mha more land to be brought intonumber of species. cultivation in order to meet the additional demand for food alone The potential impact of biofuels on water supply is another [119]. There exist a large number of studies estimating landserious concern. Approximately 70% of the freshwater around the requirement to meet specified biofuel targets (see [96,120e127]).world is already dedicated to agriculture [108]. The main biofuel However, the results vary considerably due to difference in meth-feedstocks, in particular, sugarcane, oil palm and maize, require odological approach, different assumptions about crops used andrelatively plentiful water at commercial yield levels. This implies conversion efficiencies from biomass to fuel.increased demand for irrigation and strain water supply. For Gurgel et al. [120] find that the expansion of biofuel cultivationexample, despite the fact that 76% of the sugarcane produced in will occur largely at the expense of natural forest and pasture landBrazil is under rainfed conditions, some irrigated sugar-producing (especially when no land supply response is assumed), whereasregions in northeastern Brazil are already approaching the hydro- cropland, managed forest, and natural grassland show little netlogical limits of their river basins, e.g., the São Francisco river basin change. Much of this land dedicated to biofuel feedstock cultivation[6]. De Fraiture et al. [109] find that the strain on water resources is found in Africa and Central and South America, and also, towould be so significant that large biofuel programs based on a lesser extent, in the US, Mexico and Australia and New Zealand,traditional feedstocks would be challenging in India and China. reflecting the existence of vast natural forests and pastures in those Increased water pollution due to biofuels is also a concern in areas and the superior biomass productivity of tropical regions,some countries. Moreira [110] points out that water pollution due whereas China and India, due to their immense food demand andto increased use of fertilizers and agrochemicals, sugarcane relatively lower biomass land productivity, are not found to bewashing and other stages in the ethanol production process remain regions supporting significant expansion of land for biofuel feed-major concerns in Brazil. Higher crop prices tend to encourage stocks. Hertel et al. [128] also show that largest net reductions infarmers to intensify fertilizer application on existing cropland in land cover tend to be in pasture land, although large percentageorder to enhance yields during years with good weather conditions decreases in forest land are found in Brazil and the EU. Anotherand take advantage of higher crop prices [111,112]. Simpson et al. important factor is that when biofuel producing countries convert[113] note that expanded or intensified corn acreage for ethanol, cropland to biofuel production, the reduced food exports andeven when accounting for fertilizer and land conservation higher commodity prices induce land to be cleared for crops in Please cite this article in press as: Timilsina GR, Shrestha A, How much hope should we have for biofuels?, Energy (2010), doi:10.1016/ j.energy.2010.08.023
  • 12. 12 G.R. Timilsina, A. Shrestha / Energy xxx (2010) 1e15tropical countries such as Brazil, Argentina and Indonesia to satisfy 9. Conclusion and further remarksthe unmet food demand [129]. Aside from land conversion for biofuel feedstock cultivation, The world has witnessed rapid growth in the production andHertel et al. [128] use the Global Trade Analysis Project (GTAP) consumption of biofuels over the past several years. Production ofmodel which shows that the harvested area for various crops can fuel ethanol and biodiesel grew by 26% and 172%, respectively,also be expected to change as a result of expanded biofuel between 2004 and 2006. While high oil prices might have favoredproduction from 2006 to 2015 to satisfy US and EU biofuel this growth, it was mainly driven by policies such as mandates,mandates. They find substantial increases in harvested area for targets and subsidies catering to energy security and climateoilseeds in the EU, Canada and Oceania (47.8%, 19.4% and 19.3%, change considerations. However, apprehension due to the globalrespectively) and for sugarcane in Brazil (22.9%). Coarse grain food crisis in 2007e2008 and ambiguity regarding the environ-acreage is seen to rise by 6.2% in the US but only increases mental footprint of biofuels led many industrialized as well asmoderately in most other regions (except for significant declines developing countries to reconsider their earlier optimism regardingin Brazil and the EU). Oilseed acreage, however, exhibits signifi- biofuels and adopt a more cautious approach. They announced thatcant gains in all regions, implying that the EU biofuels mandate their biofuels program would be redesigned in order to avoid a fuelwill have immense repercussions on the global oilseeds market. vs. food conflict. This also led to a shift in focus from first-genera-Hertel et al. [84] incorporate market-mediated responses and by- tion biofuels to second generation or advanced biofuels technolo-product use into their analysis of the land requirements of gies. In addition, the current financial crisis and the drop in oilincreased maize ethanol production in the US to meet the prices from prior peaks are expected to further retard the growth ofmandated volume in 2015. They show that these factors reduce biofuels in the near future.the gross feedstock land requirement of 15.2 Mha so that only The contribution of biofuels to the escalation of food prices in0.28 ha of land conversion occurs for every hectare of maize 2008 and the ensuing food crisis is a point of some contention. Mostcultivation diverted to ethanol production, resulting in the global studies agree that expanded biofuel production, by raising demandconversion of 3.8 Mha of forest and pasture land to cropland due for feedstock commodities, does put upward pressure on foodto the US mandate. prices, but there is considerable variation in estimates of the One approach to counteracting the growing scarcity of arable magnitude of this effect. This estimation is complicated by theland would be to bring abandoned agricultural land back into presence of several other important drivers of food price, such as oilproduction. Field et al. [130] estimate that significant amounts of price, climate variability and currency fluctuation. For the mostabandoned agricultural land e between 475 and 580 Mha e could part, general equilibrium studies tend to find a lower impact onbe allocated to biofuel production. Although abandoned cropland, food price from biofuel production since they include the effect ofpasture land, forests, or other natural areas could all be suitable for price responses. Second-generation biofuels may enable us to ceasebiofuel cultivation, De Vries et al. [131] suggest that mainly grass- diverting agricultural commodities fit for human consumption toland will be targeted for conversion. This refers to abandoned land fuel production and may even enable us to utilize the wasteand permanent pastures, which have certain advantages in that material from agricultural production, but they may still competethere are no bans on their conversion, whereas some countries, for for land with food crops.example, India and China, have legal bans on the conversion of Despite differences in results and uncertainties of calculations,forest land for crop cultivation. Moreover, permanent pastures the literature indicates that greenhouse gas balances are notcover an area of 3378 Mha worldwide, and although some favorable for all biofuel feedstocks, particularly when cultivation ofproportion of that will be unsuitable for cropping, it dwarfs the feedstock causes the conversion of native ecosystems to crop landscurrent arable area of 1411 Mha [132]. directly or indirectly. However, the cultivation of perennial biofuel It is often said that biofuel production should focus on degraded feedstocks on reclaimed marginal or degraded land may yield GHGor marginal lands, yet degraded lands are ill suited for agriculture savings. Assessments of the impact of biofuels on urban air qualityby definition, typically lacking water and nutrients. Some crops, are mixed; they may improve local air quality in terms of somesuch as jatropha, are promoted as feedstocks that can withstand pollutants but exacerbate the situation in terms of other pollutants.droughts, but yields are low in areas of low rainfall, and each In any case, other fuels such as LPG and CNG can deliver greaterpotential feedstock presents known constraints in soils, water improvements in air quality.supply, and temperature [119]. Since diversion of water for irriga- Expanded biofuel production, particularly at the scale necessarytion has its own impacts on biodiversity and fishery resources, to meet US and EU biofuel mandates, will have significant impactslands with sufficient water supply but that are not in high demand on land use around the world. It comes as no surprise that croppedmay be the best candidates for conversion to biofuel production area for biofuel feedstock commodities such as maize, sugarcane[133]. Some marginal lands just lack chemical inputs, and are thus and oilseeds are anticipated to grow, sometimes at the expense ofgood targets for enhanced food production, while some have other agricultural products. However, additional land will also needphysically degraded soils of little value for food production or forest to be brought into cultivation to satisfy the demand for feed andbut could be candidates for perennial grasses and trees, which build fuel. Most of this additional land is expected to come from existingsoil carbon in areas that meet temperature requirements, and may pasture land, given that pasture is plentiful in comparison to otherserve as second-generation biofuel feedstock. types of land and its conversion generally generates fewer unde- More importantly, when and if the production of cellulosic sirable consequences in terms of GHG emissions and other envi-ethanol becomes commercially viable, crop and forestry residues ronmental factors. The use of marginal land for biofuel feedstockthat are not currently part of the energy supply chain will be able to cultivation would be ideal, but making such land productivecontribute to biofuel production, relieving some of the pressure on enough (whether via the selection of suitable crops, or the supply ofland. For example, Graham et al. [134] note that 100 Mt of corn requisite inputs, etc.) to be a serious option is an ongoing challenge,residues could be salvaged for biofuel production from land planted albeit one that the realization of second-generation technologiesto corn in the USA alone. It is important to note that agricultural and may make feasible.forestry wastes represent the only sources of biofuel feedstock that While biofuels are an important renewable energy resource thatdo not necessitate land-use change beyond what occurs for food can substitute for fossil fuels, particularly in the transport sector,production and existing forestry activities. the prospects for their success are still uncertain. Unlike renewable Please cite this article in press as: Timilsina GR, Shrestha A, How much hope should we have for biofuels?, Energy (2010), doi:10.1016/ j.energy.2010.08.023
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