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This is the starting place for the Biofuels debate Expand / Collapse
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Posted Wednesday, December 12, 2007 2:13 PM


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International Transport Forum Web Debate:

 

Moving away from fossil fuel: are biofuels the answer?

 

Introductory Statement by Dan Sperling

 

 

Increasing concern about climate change and oil supplies are inspiring new interest in alternative means of transport, including fuels. Many alternatives are in contention, and no clear-cut winner has yet emerged. Some are capable of substantially reducing oil use and greenhouse gases, but are not ready for prime time. Others are economically and technically ready to go, but provide little energy and environmental value. While the future is uncertain, what we can say with confidence is that it is almost definitely going to include a mix of biofuels, electricity, and hydrogen.

 

The problem is that each alternative is at a different stage of development, and each carries with it a different mix of pros and cons. Even within the category of biofuels there are a vast array of choices.

 

Attached you will find a short statement I have written to get the debate going. Please have a look, and let me know what you think.

Introductory Statement 

 

A few questions to get the debate going:

 

1.      Are countries right to set volume-based targets for biofuels?

 

2.      Which of the biofuels hold the most promise for the transport sector?

 

3.      Are subsidies designed to reduce CO2 emissions best used for biofuel production; if not where should they be targeted?

 

 

Post #42
Posted Tuesday, December 18, 2007 11:09 AM


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COMMENT FROM RON STEENBLIK

Director of Research

Global Subsidies Initiative of the International Institute for Sustainable Development

Geneva

 

Dan Sperling's commentary provides a good overview of the state of biofuel developments and use in the transport sector.

 

Let me take Dan’s second question first, however, as it bears most generally on how the topic should be approached. He asks, “Which of the biofuels hold the most promise for the transport sector?”

 

The answer should be, “Nobody knows for certain.” Oh, sure, producers of ethanol and biodiesel will claim that their fuels hold the most promise, if for no other reason than that they have a head start. And, as to be expected, companies working on butanol or so-called “renewable diesel” or any of a number of other liquid fuels made from biomass will argue that the future is theirs. Nothing wrong with that.

 

The problem is that policy makers are listening, and betting their (actually, the public’s) money already on particular fuels. Even a bet on biofuels generally is a bet on a narrow range of transport options. Who can really know whether other ways of propelling private automobiles may emerge as cheaper and technologically superior in the next decade? Yet, by providing heavy subsidies, and setting ambitious mandates for biofuels, in some cases as long as 15 years into the future, policy makers in several countries are acting as if they have already decided which technology will come out on top.

 

I respectfully disagree, therefore, with Dan Sperling’s acceptance of the view — proffered by the ethanol industry and the politicians representing their districts — that "corn ethanol could be a stepping stone to more promising biofuels." Those more promising biofuels include, of course, ethanol made from ligno-cellulosic materials, and other fuels synthesized from biomass. But if the future is butanol, or octanol, or other synthesized fuels that can be mixed with or easily substituted for petrol or diesel without having to change storage and distribution infrastructure, or vehicle engines, then no stepping stone is needed: the market will easily absorb these fuels as increasing supplies become available.

 

If, on the other hand, the future is truly ethanol — a corrosive fuel with a high octane value but energy density two-thirds that of petrol — then one has to ask also which is the main roadblock: economic production from waste ligno-cellulosic sources, or the capacity of the fuel distribution system to handle it, and the vehicle fleet to use it? The latter certainly could become constraints, but subsidizing first-generation biofuels seems a costly way to overcome them. Assuming a breakthrough is achieved on the production side (and forecasts of when that will happen vary tremendously), the process of enlisting farmers to start growing new feedstocks, to identify suitable production sites and construct new plants will take many years: time enough for the rest of the system to adjust.

 

One may argue that, because of the time it takes for vehicle fleets to turn over, it would be desirable, by the time that large volumes of cellulosic ethanol become available, for a significant proportion of the petrol-using fleet already be flex-fuel vehicles — i.e., vehicles capable of running on blends containing high percentages of ethanol (up to 100% in the tropics or 85% in temperate climates).

 

OK, but what then is the appropriate roll of public policy? I would argue it is to educate, not to subsidize: let individual consumers weigh up the probabilities that it would be to their advantage to own an FFV. Instead, what several OECD countries are doing is artificially skewing the car market towards the production and ownership of FFVs. The results can be perverse. The policy in the United States, for example, grants manufacturers of FFVs generous credits against corporate average fuel-economy (CAFE) standards, even though most of the vehicles once they leave the dealer's lot run on petrol. And these vehicles tend to be big: many are equipped with 5.3-litre engines. The National Ethanol Vehicle Coalition even sells a sticker that owners of FFVs can affix to their vehicle's bumper. It reads: "Ethanol Guzzler". And I do not think the NEVC means it as an ironic joke.

 

A case could even be made that the way that government financial support for corn ethanol is currently being provided (in the USA and to a lesser extent Canada), it may actually delay the emergence of a cellulosic-ethanol industry. For one, the corn ethanol plants have occupied the main niches available for ethanol plants in the U.S. Midwest (and southern Ontario). And only the larger ones are likely to be worthwhile making the added investment required to process cellulosic feedstocks. In any case, the feedstock in the U.S. Midwest is likely to remain corn -- other parts of the corn plant, as well as the kernels, but still corn. Short of subsidizing the transition, there is too much investment in corn-harvesting technology, DDGS production (which benefits from special tax breaks), and DDGS consumption (including the relocation of cattle feedlots) for corn to cede its dominance in the Midwest to switchgrass or miscanthus. Outside of the corn belt, people speak of using woodchips. But there are other claims on those biomass resources, not least power generation. It is the opportunity cost of the feedstocks and the land on which they grow that matters, not just production costs.

 

As for biodiesel, the first-generation technology (transesterfication of fats or oils) is certainly not a stepping stone to second-generation technologies, which are radically different. Moreover, as Dan Sperling notes, the industry has been a victim of its own success: prices for all feedstock oils and fats (tallow included) have risen sharply over the last two years. It survives as more than a niche fuel market (which it would be if it depended just on used cooking oil) only because of subsidies. Big ones.

 

In the U.S. State of Kentucky, a medium-sized producer of biodiesel from virgin agricultural materials (e.g., soybean oil or tallow) benefits from a state subsidy of $1.00 per gallon ($0.26 per litre), the normal federal tax credit of $1.00 per gallon (paid to blenders but raising the price at which the producer can sell its biodiesel) and the small producer's tax credit of $0.10 per gallon. Adjusting for the lower energy density of biodiesel compared with mineral diesel, that adds up to $2.33 per gallon ($0.62 per litre) of diesel equivalent — or 90 per cent of the average, pre-tax, wholesale (excluding distribution and marketing margins) price of petroleum diesel in the United States as of 10 December 2007. Subsidy rates in several other OECD countries are of similar magnitude. What that means, in effect, is that governments are willing to spend almost as much for their drivers to use biodiesel as it would have cost them simply to buy mineral diesel on the international market and give it away to them, for free.

 

Will second-generation biodiesel eventually save the day? Who knows. There is a lot of excitement (and, let's be frank, hype) surrounding algal biodiesel. If somebody can get it to perform as advertised, great. And if you want to bet your mortgage on it, good luck. But I wouldn’t bet the future of road transport on it.

 

 

Are countries right to set volume-based targets for biofuels?

 

No! Volume (or percentage) targets – biofuel mandates, for short – are about the most blunt instruments that countries could have devised to promote biofuel use. The industry loves them, of course, which is why it has lobbied so hard for them. Mandates effectively establish a floor on the amount of biofuels sold in a given year, providing insurance against adverse changes in market conditions, such as a rise in feedstock prices, or a fall in diesel or petrol (gasoline) prices.

 

One of their biggest problems is that the mandates risk being around for a very long time. As U. of Illinois Professor David S. Bullock explains in a recent paper on "Ethanol Policy and Ethanol Politics" in the United States, the “irreversibility of bringing factors into ethanol production causes the subsidy policy to act like a political ratchet. It is easy enough politically to cause the subsidy to go up: corn farmers and ethanol producers influence their congressional representatives, and everyone refers to energy self-sufficiency and rural job creation. But once in place, it may well become politically infeasible to bring the subsidy back down. For, after the economy is finished building new ethanol factories, in response to the subsidy, what then?” What then, is that the plants become hostage to fortune: withdrawing the subsidy would mean stranded investments, and in rural areas where the plants are major local employers, a lot of stranded people, with homes that they cannot sell.

 

Nobody expects, after setting an obligation to meet 10 per cent of all transport fuel needs with biofuels in 2020, that in 2021 policy makers will say, “Good job! Next year, of course, you’re on your own.” Rather, if history is any guide, the biofuels industry will continue to pressure for ever-higher shares of the transport fuel market, and governments will grant them their wishes.

 

The industry says that the mandates are needed to “provide stability and reduce uncertainty” for investors. Well, what industry wouldn’t like such a guarantee if they can get it? (I know plenty of family restaurant owners who would love the government to pass a law requiring that, say, one-third of all meals be eaten outside the home.) The point is that, by mandating biofuels, the risks do not disappear: they are simply transferred to other people – drivers, consumers of foods that compete with biofuels and, where biofuels are both mandated and subsidized, taxpayers.

 

But this is not just a fairness issue. Fulfilling many of the higher, longer-term mandates could well prove even costlier than meeting current ones. And if optimistic forecasts for developments in technology fail to materialize, the world could be facing within a decade the dilemma of having to decide between either repealing the mandates (and probably use a lot of taxpayers’ money to compensate the industry for the U-turn in policy), or enduring even greater pressure on food prices or (dwindling) natural habitats.

 

Which brings me to the third question: Are subsidies designed to reduce CO2 emissions best used for biofuel production; if not, where should they be targeted?

 

Numerous studies ranking various technological and behavioural changes show that subsidizing first-generation biofuels at current levels of subsidization are inefficient. A recent study by McKinsey & Company for the German government (Levers for Greenhouse Gas Abatement in the Sectors—Abatement Potentials and Costs for 2020), shows a relatively large potential for reducing CO2 emissions at costs of 50 euros per tonne of CO2-equivalent or less. Most of the investments below this threshold are in sectors other than transport (note: the Earth does not care whence the CO2 is issued), but even in the area of transport, the study identifies many technologies and behavioural changes (e.g., keeping tyres properly inflated) that cost far lower per tonne of CO2-equivalent avoided than biofuels. Our own studies, by the way, estimate that support for biofuels is currently at least $250 per tonne of CO2-equivalent avoided for most fuels in most countries. And in arriving at those numbers we do not take into consideration GHG emissions associated with land-use changes, which would boost the values even higher (or even imply that the subsidies are increasing life-cycle GHG emissions).

 

It may still be good value to subsidize R&D on biofuels. But that is not what most of the current subsidies (and market price support – transfers from consumers to producers) are supporting. The vast majority of taxpayer and consumer money being spent on biofuels in OECD countries is supporting not research, nor even the use of relatively low-GHG forms of biofuels (like ethanol from Brazilian sugar cane), but production of biofuels with modest (at best) GHG profiles within their borders.

 

Now, let’s talk about that.

 

Post #43
Posted Friday, January 04, 2008 3:37 PM
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I have read with interest Dan's introductory statement and Ron Steenblik's first reply and would like to comment as follows



What are the objectives

One of the issues in the biofuels debate is a general lack of clarity of the objectives resulting in confusion as to what actions are appropriate and what the alleged benefits might be. Use of biomass for transport and more generally for energy is promoted for at least three reasons: security of energy supply (in a geo-political sense), substitution of dwindling fossil energy resources by renewable ones, and of course reduction of GHG emissions. Depending which of these objectives one focuses on, answers to most questions related to bio-fuels will be different.



Corn ethanol in the US and sugar ethanol in Brazil have all to do with security of supply and nothing to do with climate change or GHG savings. As Dan points out in his introductory paper, corn ethanol doesn’t save much GHG and it is symptomatic that most US LCA or WTW studies use saving of oil rather than either energy or GHG as main indicator. The fact that Brazilian sugarcane ethanol is also GHG-efficient is coincidental rather than by design.



When governments embark in mandates or support schemes for biofuels or more generally biomass for energy they should therefore first carefully consider why they are doing it.



Improving security of supply?

If security of supply is the main objective then actions should target those sectors that import energy. In the US, that means primarily transport as most electricity and heat is generated from domestic coal, gas and other sources. In Europe transport is also a main culprit but the heat and power sector is also very much (and increasingly) dependent on imported gas. From this point of view, using biomass to generate electricity or produce biogas for heating maybe as justifiable than turning into transport fuel.



In this case energy or GHG efficiency is not a primary concern. Using a lot of primary energy to provide a certain service can be acceptable as long as it is from domestic sources.



Substituting fossil energy sources?

This is a somewhat longer term objective which could also be called “long term security of supply”. The main difference with the previous one is that it is not necessarily focused on domestic sources only and energy efficiency becomes a primary objective. Indeed the idea is to produce as much as possible usable energy from a limited renewable resource. Whether this is achieved through substitution of transport fuels or by other means should be largely irrelevant.



This aspect of energy efficiency is often overlooked in the biofuels debate. For instance the BTL pathways, turning biomass into high quality (mostly) diesel fuel are promoted for their very high GHG savings compared to fossil fuels. Their energy balance is, however, not very favourable because the conversion processes are inefficient (in the order of 50% at best). As such they represent a loss of energy compared to e.g. straight burning for heat and power which can be done with efficiencies of 80 to 90%.



Avoiding GHG emissions?

This objective is in many ways the same as the previous one but now integrating the carbon content of the fossil fuels saved and GHG gases other than CO2, essentially CH4 and N2O. Because all GHGs are born equal (once they have been translated into CO2 equivalent) it doesn’t matter in which sectors of the economy the GHG savings occur. What is relevant is to avoid as much GHG emissions as possible with whatever biomass is available.



The appropriate metric becomes g CO2 avoided /ha rather than say km travelled. Taking again BTL as an example: BTL has a very favourable GHG balance so that g CO2 avoided / km emitted is very high. But this masks the poor energy efficiency as a result of which the g CO2 avoided / hectare of land used is not very good.



The current focus on biofuels for transport creates an artificial emphasis on the products rather than the source. A lot of people are involved in trying to quantify the GHG savings associated with say ethanol generating endless debates about by-product credits and the like. This is in fact the wrong debate. What we should be assessing and comparing are the different possible ways to use land or bio-wastes to maximize GHG savings. This could include a measure of biofuel production associated with other uses for some of the biomass streams including heat and power and, potentially, chemicals manufacture.



So are biofuels targets justified?

Now turning to Dan’s questions, one conclusion from the above analysis is that mandates for biofuels only appear justified if the objective is strongly related to security of supply and if this is seen to be particularly acute for transport. There is little, if any, justification based on fossil energy substitution and even less on GHG emission avoidance. For the latter a more general renewable energy target or GHG emission reductions targets would seem more appropriate, leaving economic actors to decide where the substitution can best take place (possibly via carbon trading schemes).



Which of the biofuels hold the most promise for the transport sector?

If we now assume that the answer to our energy problems includes a measure of biofuels in transport we have to analyse the specific features of the transport sector that fuels have to contend with.



The first point is a bit of tautology i.e. that transport is about moving people and things in vehicles with the corollary that space and weight come at a premium. Energy density is therefore one of the keys and, to-date, nothing has come remotely close to the liquid hydrocarbon molecules.



The second point is that we do not start from a blank sheet: there are huge established vehicle fleets and fuelling infrastructures that cannot be changed or replaced overnight (or even within a much longer timeframe). The system is up and running and the show must go on without any interruptions or even minor disturbances. Fleet turnover in particular, takes a very long time.



This suggests two scenarios: either we are happy to consider biofuels as niche players in which case fuels with particularly attractive properties or benefits can be envisaged even if they have significant drawbacks. Or we are more ambitious and want biofuels to become mainstream in which case they have to conform.



One example in point is DME: it is acknowledged as one of the best diesel fuels in terms of clean burning, efficiency etc. It can be made from a variety of sources with a reasonable efficiency. The problem is that it has physical properties similar to LPG i.e. gaseous at ambient conditions: it needs dedicated distribution infrastructure and vehicles. As a niche fuel for e.g. fleets it is an option. As mainstream fuel it is dead born.



The successful biofuels for transport will be liquid and have as high an energy density as possible. They will be fungible with existing hydrocarbon fuels so that they can be blended in various proportions without creating major problems with the distribution infrastructure or the vehicles. This points out to liquids with hydrocarbon-like molecules. In addition of course these bio-components should preferably have a favourable GHG and total energy balance and not require an overly costly and complex manufacturing infrastructure. Very few options will meet all these criteria so compromises will be necessary.



Are subsidies designed to reduce CO2 emissions best used for biofuel production; if not where should they be targeted?

If one subscribes to the above the answer has to be an emphatic NO. Being serious about reducing GHG emissions is about having a global view rather than targeting a specific sector of area.



The primary resource that we have at our disposal to avoid fossil CO2 emissions through biomass is land and this must be starting point. Subsidies must encourage schemes that grow lots of biomass (sustainably of course) and use it in an efficient way. The ultimate way of achieving this is probably to ensure that carbon emissions have a price that is sufficiently high and predictable for people to devise and implement such schemes.
Post #44
Posted Sunday, January 06, 2008 10:18 PM
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In the biofuel debate, it is surprising to realize that most people assume that biofuels are only agrofuels and mostly ethanol (at least in the debates in US, Canada and France) without considering if it's produced by crops or by waste. But this specificity is very important because while there are huge problems with agrofuels, using different kinds of waste to produce biofuel such as biogas can actually be a double solution rather than a problem.

I will try to answer the three questions in one global answer.


Countries should not subsidize biofuels the way it is done now in the case of ethanol because it perverts the forces of the market, hindering more sustainable solutions. I agree with Ron Steenblik on that. But, I think that countries but also regions and cities have a lot to do regarding the support of more sustainable uses of energy. The subsidies should not be only dedicated to one choice but many, as has been partially done in Sweden. There, if you buy a biogas car or an hybrid-electric car, you have a 40 % rebate on the sales' tax but only 20 % rebate for a flexifuel and none for a gasoline car. On top of it, you have a rebate of c.a. 1600 $ is your car is considered an environmental car, i.e. low Co2 emissions. That includes flexifuel, biogas, small cars, hybrid electric and such... In the case of biogas, you also get some other benefits like free parking but you can be controlled to check if you're really using biogas and not only petrol... The 40 % subsidies have been offered because the prices of those cars is higher so that all cars can be in the same price range. If it had been subsidized on their sustainability, using a life cycle analysis, biogas would have been even more interesting because while Sweden imports 1/5 of its ethanol from Brazil, which is not very sustainable, biogas production is linked to public ownership (biogas plants), local economy, lower transportation and better quality control (biogas being produced locally), waste solution and multiple uses for the biogas (district heating, transportation, electricity). But since the life cycle analysis or the effect of local production on the Swedish economy is not considered, the ethanol is now leading the way, hindering the biogas market even if both the governments and car companies agree that producing biofuels from waste is a more sustainable solution. I agree with Jean-François that being a liquid that can be blended with gasoline has helped the ethanol market a lot.

In the case of biogas, building infrastructures is also subsidized to balance the market forces. I don't agree with Jean-François that this idea is "born dead" because biogas production is becoming very attractive for cities that want to use the methane while treating their waste... But there is a definite need to include biogas in the biofuel debates.

I agree that second-generation ethanol can also come from waste, which leads to the second question that is not often addressed in the biofuel debate: when a consumer buys ethanol, it doesn't know where it comes from. Ethanol needs to be labeled stating its source of production (agrocrop or waste), its country of origin (locally produced or imported) and in the respect of human rights (the quasi-slavery conditions of some workers in Brazil have also to be taken into account). That has to be done because "green" consumers, who are the basic market for "green" cars, are way more difficult to please and knowledgeable than regular consumers. For example, they could agree to put cellulosic ethanol in their car, but not corn grain ethanol. If they don't know the source of the ethanol, they will stick to petrol, even if with all the problems related to it, because the ethanol choice is problematic and switching habits is more demanding, so it has to be more attractive. In the province of Québec (Canada), where there had been devastating reports on corn grain ethanol, the Government has decided to forbid any new corn grain ethanol plant for environmental reasons. Petrol companies that blend ethanol and petrol don't brag about the ethanol content in their gasoline but barely mention it. So, by not labeling the ethanol, not only is the cellulosic ethanol jeopardized by corn grain or wheat subsidies but also by the reputation of the agrocrops. On the other side, unless I'm mistaken, the Montreal transport authority has chosen biodiesel from waste for its bus fleet and should promote that fact.

It is becoming very clear that human issues are part of the biofuel debates and, in that sense, countries and international bodies (such as UN or OECD) will have to play a leading role in protecting human basic needs such as access to food and water. The rise of biofuel markets cannot be only considered as a separate economic sector. The biofuel debate must be included in the overall questions of energy production and consumption (impact with other uses of energy, energy efficiency and such, heating, electricity, etc.), in a life cycle analysis overview that include sustainability aspects such as the environment but also the impacts on the local (national) economy and society.




Regional and International Consultant
Transport and sustainable development
Post #45
Posted Tuesday, January 08, 2008 12:03 PM
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From what I have read on this forum and on various websites, I understand that any person with basic common sense understand that:
- first generation biofuels are no serious answer to the fossil energy substitution
- the risks they generate are greater than any of their supposed positive effects
- the amount of subsidies spent to enhance their production should be used more efficiently.
- the decisions in the USA, Canada, EU and Brasil to developp their production were taken under the influence of powerfull lobbies.
- their main impact is to boost the corn, wheat, rapeseed and soybean farmers income.
Having said that, the question is not to discuss during days about the advantages / drawbacks of ethanol / biodiesel. It is just urgent to stop biofuel plants expansion and to program over the next 10 years the shut down of the existing ones to make sure agricultural commodities are used for food production only.
The real question is the following: how can we engage this process at a world level as it is our responsability to ensure the world foof supply is not threatened by a couple of lobbies.
If biofuel were to be produced, I would recommand to use wastes, used oil or seaweed oil.
Post #46
Posted Wednesday, January 09, 2008 4:05 PM
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Maybe it would be useful to make a sketch about what this forum understands under 'biofuels'.

If it means all fuels (or energy carriers) produced from biomass and capable of being used as a transport fuel, then we are discussing a great variety of technologies and fuels.

Carbon-negative bioenergy for transport

Contrary to solar, wind, nuclear, hydro and all other renewables, bioenergy coupled to carbon capture and storage (CCS) results in negative emissions. You not merely reduce CO2, you actually take CO2 from the past out of the atmosphere.

Bioenergy + CCS (or 'bio-energy with carbon storage', BECS) is the most radical of climate change mitigation options, logically so, because no other energy system takes CO2 out of the atmosphere. Scientists have found that if implemented on a global scale, BECS systems can end climate change and take us back to pre-industrial atmospheric CO2 levels by mid-century (2060).

These negative emissions fuels and energy carriers can be used for transport:

-electricity from biomass coupled to carbon capture and storage (CCS) which results in negative emissions; if used in an electric vehicle, this source of transport energy allows drivers to take CO2 out of the atmosphere; up to minus 1030 g/kWh can be obtained (compared to wind, nuclear and biomass at +30gCO2/kWh, solar at 100gCO/kWh, etc...)

-biohydrogen coupled to CCS: likewise this fuel yields negative emissions and can be used as a transport fuel; according to a large EU WTW study biohydrogen used in ICEs is the most efficient hydrogen production and utilization pathway, both when it comes to the primary energy required as to the GHG emissions occuring during its production. As with carbon-negative bio-electricity, each time you were to use bio-hydrogen coupled to CCS, you would be taking historic CO2 emissions out of the atmosphere.

-biogas coupled to CCS to obtain pure biomethane; same logic as above: negative emissions

Carbon-negative biofuels based on biochar

-Fischer-Tropsch fuels based on the gasification of biomass, with a carbon fraction stored in soils to boost nutrient retention, water retention, cation exchange, and boosting yields of energy crops
-used in an ICE, these negative emissions fuels again result in drivers taking historic CO2 emissions out of the atmosphere

First generation biofuels

-Biodiesel from oil crops, many of them have a good energy and carbon balance, especially those based on palm oil. Environmentalists have dumbed down the debate by focusing on palm oil produced in some problematic areas in Indonesia and Malaysia; but there are vast regions where palm oil can be produced in a sustainable way, with low emissions. The FAO yesterday said the DRCongo is one such country where a large potential for sustainable palm oil exists.

-Bioethanol from sugar and starch crops: good energy and carbon balances for sugarcane, cassava, sweet potato, sweet sorghum, tropical sugar beet and many other tropical starch and sugar crops; low efficiency for starch and sugar crops grown in temperate climates

Second generation biofuels
-Cellulosic ethanol from crops like switchgrass and polycultures of perennial grasses: extremely strong energy balance as well as carbon balance (as yesterday confirmed by the first large scale life-cycle analysis); this type of crops has major environmental benefits, when planted on low diversity grass-lands, such as reducing erosion, improving soil health, boosting biodiversity

-Synthetic biofuels (aka Fischer-Tropsch fuels), obtained from biomass-to-liquids and gas-to-liquids processes: ultra-clean fuels, strong energy and carbon balance, competitive with oil at $60pb and can be made from all biomass; with a large potential for wood and residues from the forestry sector.

-Coal-biomass-to-liquids: when coupled to CCS, results in zero emissions, blending of coal and biomass allows use of a very large carbonaceous feedstock in a clean way

-Biobutanol and higher alcohols: more efficient than ethanol

Third generation biofuels
-Based on crops that are designed in such a way that they grow specific properties targeted for easier bioconversion. Such as: low-lignin energy crops (sorghum, eucalyptus have been developed), high-carbon-storing energy crops (again such an eucalyptus as well as a salix have been developed), crops that grow their own bioconversion enzymes (developed for maize), etc...

-Some of these crops - like trees that store up to 30% more CO2 - would be excellent for use in the production of negative emissions biofuels and bioenergy; these high-carbon trees become machines that take copious amounts of CO2 out of the atmosphere, which can then be stored in geological formations, while carbon-negative biohydrogen is obtained


Now there are many more types of biofuels, each with their own interesting aspects.

The potential
According to the International Energy Agency's Bioenergy Task 40, there is a global maximum potential of 1300 Exajoules of exportable bioenergy by 2050. That is around 5 times the total amount of oil currently consumed by the world. The potential is explicitly sustainable, meaning that it can be met without any deforestation, and after meeting all food, fiber, fodder and forest products needs of growing populations.

This is the technical potential, based on the knowledge that there is a very large unused base of arable land.

The largest potential can be found in Sub-Saharan Africa (350Ej) and Latin America (300Ej).

Subsidies
1. When it comes to subsidies, a question could be: why subsidize solar power and wind power, but not biofuels?

2. Secondly, subsidies in the wealthy EU and US should be abandonded because biofuels can be produced more efficiently in the developing world.

3. Third, biofuel subsidies in the poor countries, if governments can afford them, should be encouraged, because they have major spin-off effects: improved agricultural production, food security, fewer environmental damages because of more efficient agriculture and so on. The FAO recently said without abundant, affordable fuels, third world farming can never become efficient; and it said biofuels can go a great way in providing these fuels, certainly now that oil prices are catastrophically high

4. The discussion about subsidies should be put in the wider context of agricultural subsidies and Doha.
One thing is certain, though, it is obscene to know that a large number of African countries are currently food importers, while they can and should be major food exporters and biofuels exporters (a country like the DRCongo can technically produce food for 2 billion people, as well as around 5 million barrels of oil equivalent biofuels per day). This situation is partly the result of subsidies in the EU and the US.


All in all, I think the debate about first generation biofuels is coming a bit late, certainly when mandates and subsidies are already going to next-generation fuels, the first of which are being produced. The US target of 36 billion gallons of biofuels by 2022 has a cap on first generation ethanol, with 60% having to come from next-generation fuels.

Moreover, high agricultural prices are already leading to the EU abandoning certain biofuel subsidies. E.g. the energy crop subsidy was recently phased out.

But in any case, the EU and the US should import biofuels from the South, which are more efficient, have a stronger carbon balance, and have strongly positive social impacts, providing a historic opportunity for rural development. The vast majority (75%) of the world's poor are farmers in rural areas. They stand to benefit from improved access to wealthy biofuels markets in Europe, the US and East Asia.

First generation fuels in poor countries
The case for first generation biofuels in the Least Developed Countries is extremely strong. 85% of these LDCs are oil importers, 50% being fully dependent on imports.

Current oil prices are truly catastrophic for these oil importing countries, some of who spend up to 15% of their entire GDP on imported oil (average of all African countries: 10%). (According to some, Dr Robert Zubrin amongst them, these prices are "an extremely regressive tax on the world's poor" that has already "killed millions of people").

Micro- and macro-economic and social consequences of these disastrous prices:
-Undermined economic growth
-Drained treasuries, forcing states cut back on health care, poverty eradication, education
-Agricultural output and marketing declines, leading to food insecurity
-Trade, business, mobility are hit
-Lower employment prospects and higher generalized inflation, with the poor being the first victims
-Decreased trading capacity
-The destruction of the positive effects of debt relief
-The destruction of forests because of a resurgence of reliance on wood fuels instead of kerosene, etc...

Producing first generation biofuels is now highly competitive with oil at $100 pb and given that feedstocks can be grown by local farming communities, who need cheap fuels themselves to get their products to market to feed (poor) urbanites, the case for biofuels in these countries is an obvious no-brainer.
Post #47
Posted Wednesday, January 09, 2008 6:22 PM
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First of all, I will ask you all a little indulgence because my english is not as perfect as it should...

Answer to Kim : In Montréal, there is effectively a fleet of some 150 buses that runs on biodiesel. You can find on the following link a press release about this project. This link is in French, but if you visit www.rothsaybiodiesel.ca, you should find all the informations you need about biodiesel production. They also extendent this project on the cruise boats and the Saute-Moutons boats of Montréal, which are now fuelled with biodiesel. The project worked so well that the STM ( société de transport de la ville de Montréal) plans ton convert all the its bus fleet to biofuel by 2009 or 2010 (something like this).

Rothsay Biodiésel has built the first Biodiesel refinery in Canada, which sits in Ville Ste-Catherine, a suburban on the south shore of Montréal. Rothsay is, basically, a meat processing factory. If I clearly understood, when we faced in Québec the cowpox crisis, a lot of animals had to be killed. As meat and fat rottens, it produces biogases and very strong smells for kilometers around. Also, they had to find a better way to dispose of it than to put it in the landfills. So they hace built this appendice to the factory to transform the meat wastes to oil and biofuel. This process is also used to convert used vegetal oil in biodiesel. It seems that it is very similar and that the results are similar too.


http://www.rothsaybiodiesel.ca/fr/pdf/pressRelease_21Nov05_FR.pdf
http://www.stcum.qc.ca/info/biobus.htm

I find that biodiesel made with wastes is a very winner idea, because those waste must be treated anyway and can not be put in brownfileds.

There are some things, though, that still need to be developped. The biodiesel can freeze and jam under low temperatures, but this problem can be easily corrected by heating a little the fuel in the tank or something like this. This is why it is still used in ratio of 5% and 20 %, but if the climate was warmer, it could be used at 100% according to me. It also seems that it needs a little more maintenance in the beginning because normal Diesel produces some kind of crust on the walls of the fueltank and the biodiesel tends to wash it up, so this crust ends in the filters. It needs more filters fora little time, but then it works well. A special attention must be given to the anti-pollution system too.

I also found very intersting projetct that has been done in the US. A technology developped by GreenFuel of Boston and MIT of Massachussetts transforms algaes in biofuel. There is a article that was published about it in L'Actualité, during sommer 2007 under the topic « 30 inventions qui changeront nos vies» (I'm sorry, I dont have the exact reference for it.). should you find it on www.lactualite.com . Grosso modo, they just capt the CO2 and force it through water where there is a lot of those algaes. Dopped with CO2, they grow at very high speed and can be harvested very fast. It seems that it produces more biofuel per hectare than any other way to produce biofuel. For you in New Brunswick, it could be very interesting to use also the Bellerive Incenarator lobsters that cannot be sold to the public and to transform it into biofuel.
There is also a pilot project driven together with Volkswagen Canada and Irving gas about biofuel. The purpose was to study the effect of biodiesel on cars engine. We can find the result of this study on prospectuses availabe at VW dealers.

Finaly, according to me, bioethanol made with corn doesn't have any future. Corn asks too much insecticides and pesticides to be viable solution. More over, it is a cereal we use as a meal. Cars will ask much more bioethanol than what Earth will be able to give. The option according to me, would be to use cellulosic ethanol. There is a lot more ethanol to be produces with cellulose than only with sugarcan, corn, beets or so on. And it could be the solution to use the crop of those productions. It can be a very good occasion to consolidate local employment and to bypass the petroleum domination.

Post #48
Posted Friday, January 11, 2008 6:10 PM


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Greetings, Jonas, and best wishes on the New Year! We (virtually) meet again.

There is much in what you write with which I agree, but I shall confine my remarks to the areas in which we probably disagree.

"When it comes to subsidies, a question could be: why subsidize solar power and wind power, but not biofuels?"

All three technologies have been labeled "renewable", but the "renewable" content of each differs considerably. Moreover, while the renewable content comes essentially free in the case of solar and wind power, there is often a substantial opportunity cost to diverting the renewable component, biomass, to the production of fuels. And, as we have seen recently, in the short-term stimulating biofuel production can actually lead to higher production costs, by helping to drive up the price of its feedstock (80% of the cost of production in the case of biodiesel). That stands in contrast with the rationale that has been used to subsidize solar power and wind power, which is that learning-by-doing and increasing the scale of production and deployment can be expected to push down costs, which it has.

Just as, or perhaps more, important than whether a technology is subsidized is how it is subsidized. The method of subsidizing solar and wind power plants, and electricity generated by those plants, has differed in important ways from that used to support biofuels. Government expenditures on R&D, and capital grants and tax credits for construction of plants, have been common forms of support provided to all three technologies. But production incentives for solar and wind-powered electricity have much more often been created through cross subsidies within the market for electricity -- e.g., through differential tariffs. That at least internalizes the higher cost among electricity consumers.

In the case of biofuels, the bulk of support has come from taxpayers. That means, in effect, that governments are subsidizing transport fueled by the internal combustion engine. Many transport economists, I think, would question whether doing that is the most cost-effective way to reduce petroleum use or greenhouse gases.

"Contrary to solar, wind, nuclear, hydro and all other renewables, bioenergy coupled to carbon capture and storage (CCS) results in negative emissions."

Well, that's great -- or, I should say, that would be great. But since there are no commercial bio-energy plants coupled to carbon capture and storage existing at the moment, and unlikely to be for several years, that's hardly an argument for continuing current borad-based, production-related subsidies for biofuels (not that I think you are suggesting that). Putting a price on carbon emissions would help spur this technology immensely, I should think.


"[B]iofuel subsidies in the poor countries, if governments can afford them, should be encouraged, because they have major spin-off effects: improved agricultural production, food security, fewer environmental damages because of more efficient agriculture and so on. The FAO recently said without abundant, affordable fuels, third world farming can never become efficient; and it said biofuels can go a great way in providing these fuels, certainly now that oil prices are catastrophically high."

Personally, I would avoid making such a blanket -- and simplistic -- recommendation. Affordability for subsidies is an insufficient criterion. I can afford to buy myself a fancy motorcycle, but that does not mean it would be in my best interest to do so. I think we can agree that there is considerable need for improving agricultural production, securing food supplies, and reducing environmental damage in the world's poorest countries. Perhaps in some situations investment in biofuels will help address all three. But if biofuels are truly likely to be produced more cheaply than petroleum fuels, why would they need to be subsidized? And what kind of subsidies do you have in mind -- capital loans, capital grants, labour subsidies, crop subsidies, subsidies to the final product? (The devil is in the details!)

Moreover, let's not forget that it is opportunity cost, not production cost, that matters. Palm oil, for example, may be cheap to produce. But it is commanding record prices -- on a per-litre basis ($0.85), it is more expensive than petroleum diesel. Turning palm oil into biodiesel is thus a value-subtracting activity in many countries. Moreover, the combination of rising incomes, rising population, and subsidies and mandates for biofuels means that prices for palm oil are likely to remain high over the coming year. Earlier this week it was announced by Malaysian authorities that Singaporeans would be banned from buying (subsidized) palm-oil-based cooking oil in the southern Malaysian state of Johor.

That is not to say that, longer term, there may not be an important role for biofuels, particularly in Africa. But we should be cautious of recommending policies, like subsidies, that once in place are difficult to remove, and that almost always spawn unintended consequences.

"All in all, I think the debate about first generation biofuels is coming a bit late, certainly when mandates and subsidies are already going to next-generation fuels, the first of which are being produced. The US target of 36 billion gallons [136 billion litres] of biofuels by 2022 has a cap on first generation ethanol, with 60% having to come from next-generation fuels."

The Energy Independence and Security Act of 2007 (EISA07), signed into law on 19 December 2007, does indeed place a cap on the volume of "conventional biofuels" -- which it defines as ethanol derived from corn starch -- that can be counted towards the new Renewable Fuels Standard (RFS). But that cap, 15 billion gallons (57 billion litres) per year, is still twice the current rate of production. New plants producing ethanol from corn starch will have to achieve reductions in GHG emissions of at least 20% compared with gasoline, but that reduction requirement may be adjusted to as low as 10% by the Administrator of the U.S. Environmental Protection Agency (EPA) if he or she determines that the requirement is not feasible for conventional biofuels.

EISA07 also calls for increasing the amount of "advanced biofuels" in the volume of biofuels used for transport. But only a potion of that has to come from cellulosic sources (16 billion gallons, or 61 billion litres, by 2022). And even those sources may include non-starchy parts of the corn plant, such as stalks, leaves and cobs.

The rest of the "advanced biofuels" quota of 5 billion gallons (19 billion litres) per year may be met by first-generation biofuels (ethanol, biodiesel) made from crops (sorghum, oilseeds, sugar beets, sugarcane) other than maize kernels.


"Moreover, high agricultural prices are already leading to the EU abandoning certain biofuel subsidies -- e.g. the energy crop subsidy was recently phased out."

The energy-crop subsidy was a minor component of overall support for biofuels, most of which is provided through fuel-tax exemptions, tariff protection and mandates.

Post #49
Posted Saturday, January 12, 2008 2:42 AM
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I agree with Ron Steenblik that “renewable” can be interpreted in different ways for “solar”, “wind” and “biomass”. Maybe it would help if energy production was classified in three categories of sustainability: those who can harm the environment (coal, petrol, gas, agrocrops), those who are mostly neutral to the environment (wind, solar, geothermy), and those who can help solve other environmental problems (biofuels from waste, and maybe, as Jonas as mentioned, specially in uses where the bioenergy is coupled with carbone capture and storage). In these categories, while we all agree that non-renewable fuels are unsustainable, the agrocrops are the only type of energy where you need to produce something to produce energy. The energy from the wind or the sun only needs to be captured and it’s hard to imagine that a company would create waste only for the benefit of capturing biogas (the fact that there are plenty of garbage, manure and other waste helps in that case).

I also strongly agree with Ron that the agrofuel question cannot be simply summed up as a positive spin-off for poor countries (continents). That comes from a perception that every farmer will profit from agrocrops while in real life, it seems to worsen their situation rather than improving it. Why? Because, in order to build a market for both fuels and flexifuel cars, agrofuel production must be done on a very large scale. Darrin Qualman, director of research for Canada’s National Farmer's Union, has recently written a very good article that explains why, even in rich countries such as Canada, profits from industrial farming, on average, go to big corporate players while impoverishing farmers.
(http://www.grain.org/seedling/?id=509).

In poorer countries, the situation can be even worse. In Brazil, for example, huge ethanol production plants belong to companies such as Cargill while poor people don’t own the land. Thus, they must accept pitiful working conditions that have been evaluated as very closed to slavery by Brazilian researcher Maria Aparecida de Morães Silva (see articles from Isabella Kenfield http://americas.irc-online.org/am/4049) in English or Henrik Jönsson http://www.gp.se/gp/road/Classic/shared/printArticle.jsp?d=130&a=354317 in Swedish).

Ron’s argument on the importance of thinking about cost in terms of «opportunity» rather than «production» is also a very good sound.

Agrofuels market being more profitable than food, it leads to major ethical questions, specially when articles such as Burning wheat has more value than putting it in bread are published to influence farmers on the output of their crops (http://www.fcc-fac.ca/en/LearningCentre/journal/stories/200607-3_e.asp). But agrocrops also bring negative impacts to other areas such as pressure on important land uses that could be devoted to organic farming or protected for biodiversity such as marshes and wooden areas, both in poor and richer countries.

Finally, even with if the US EISA07 was more stringent on second or third generation ethanol percentages, if consumers cannot freely choose cellulosic (or waste) from starch ethanol because it’s not labeled, it will hinder a fast development of more sustainable biofuel productions while creating other unintended consequences.


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Transport and sustainable development
Post #50
Posted Sunday, January 13, 2008 3:06 PM
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Hello Ron, and to the other participants in this much needed discussion, have a good year.

Ron Steenblik (1/11/2008)
Greetings, Jonas, and best wishes on the New Year! We (virtually) meet again.

All three technologies have been labeled "renewable", but the "renewable" content of each differs considerably. Moreover, while the renewable content comes essentially free in the case of solar and wind power, there is often a substantial opportunity cost to diverting the renewable component, biomass, to the production of fuels.


That's true to a certain extent, but let us not forget that there are large hidden costs for wind and solar that are never mentioned.

Because of their intermittency, these technologies, if they want to make any difference, actually drive up the use of fossil fuels. In Germany, the wind power boom has been accompanied by increased consumption of coal, leading a company like Total SA to dismiss wind power as a "dirty" form of renewable energy. In some cases, wind turbines only supply 30% of their theoretical capacity on a yearly basis, the remaining 70% having to be met by fossil fuels.

Total's jab is not entirely fair, because in principle you can generate clean electricity from solar and wind in a distributed way. The problem is: this is being done nowhere. In practise, these sources drive up the use of fossil fuels.

The best way forward would be to couple biomass energy to intermittent renewables, to overcome the baseload problem. There is one demonstration project in Germany which shows it can be done: wind and solar no longer need to be supplemented by coal, because biogas made from energy crops has been coupled to them instead of coal and natural gas.

We should carefully study the opportunity costs of biomass as compared to these benefits (biomass makes wind and power green).

I would be the first one to limit subsidies for renewables that have high opportunity costs. A smarter thing would be to provide subsidies, if any, only to integrated renewable energy systems that have minimal hidden and opportunity costs.


Moreover, have a look at the real CO2 offsetting cost of all three subsidised forms of renewable energy, and you will see that biomass scores much better than either solar and wind that rely on fossil fuels.


Finally, subsidies for biomass are important to allow for the development of an efficient supply chain. Wind and solar don't need such a supply chain, they are completely localised.

But bioenergy needs a good supply chain in order to be efficient. Once this supply chain is in place, an important step towards potential negative emissions energy has been realised. This too is a reason to subsidize bioenergy today, even if negative emissions systems are not yet in place.

Just as, or perhaps more, important than whether a technology is subsidized ishow it is subsidized. The method of subsidizing solar and wind power plants, and electricity generated by those plants, has differed in important ways from that used to support biofuels. Government expenditures on R&D, and capital grants and tax credits for construction of plants, have been common forms of support provided to all three technologies. But production incentives for solar and wind-powered electricity have much more often been created through cross subsidies within the market for electricity -- e.g., through differential tariffs. That at least internalizes the higher cost among electricity consumers.

In the case of biofuels, the bulk of support has come fromtaxpayers. That means, in effect, that governments are subsidizing transport fueled by the internal combustion engine. Many transport economists, I think, would question whether doing that is the most cost-effective way to reduce petroleum use or greenhouse gases.


Absolutely, I'm all in favor of abandoning subsidies and research funds for liquid biofuels used in ICEs in highly developed countries - because it's fairly well established that this is, by far, the least efficient way to use biomass. Both when it comes to sheer energy efficiency as to CO2 offsetting efficiency.

Wealthy, high-tech countries should invest in electric vehicles and possibly fuel cell vehicles, not in ICEs.

After all, this would be good for the bioenergy sector, because biomass is the most competitive source to generate electricity by a stretch - more cost-effective than either wind and solar and in certain cases already less costly than coal (see recent EU energy technology roadmap for numbers).

Likewise, the most cost-effective pathway (both qua energy efficiency, qua commercial cost as qua CO2 offsetting cost) for the production of hydrogen from renewables is via biomass. Neither wind not solar will ever compete here (because they require extremely expensive electrolysis).

So in all cases, the wisest thing to do would be to transit to a non-ICE powered transport sector.

Liquid biofuels are something for poor countries, where electric or hydrogen transport will not be introduced anywhere soon; but these countries absolutely need affordable transport energy because that's one of the best guarantees to make their economies wealthier and more efficient. It doesn't matter what type of fuel they use - fossil or bio - but if biofuels happen to have a competitive edge (and with oil at $100, they have), they should be encouraged. Later, when these countries have the technical capacity, they too should transit to electric or hydrogen - but this will take many decades.

The ideal would be to have developing countries producing liquid biofuels to meet their own transport needs and for them to export efficiently-produced bioenergy to wealthy countries, where it can be used to generate negative emissions energy (either electricity or hydrogen) for use in transport/industry.


"Contrary to solar, wind, nuclear, hydro and all other renewables, bioenergy coupled to carbon capture and storage (CCS) results in negative emissions."


Well, that's great -- or, I should say, that would be great. But since there are no commercial bio-energy plants coupled to carbon capture and storage existing at the moment, and unlikely to be for several years, that's hardly an argument for continuing current borad-based, production-related subsidies for biofuels (not that I think you are suggesting that). Putting a price on carbon emissions would help spur thistechnology immensely, I should think.


We are pragmatic about this: CCS *will* be implemented in the coal industry. China will have its first plant up and running in 2009 - next year.

So IF they are going to use this on coal, and it's unlikely civil society will be able to stop this, why not urge them to start co-firing sustainably sourced biomass? That would immediately reduce the leakage risk and reduce the CO2 footprint considerably. Co-firing biomass is already a highly routine practise. Later on, when biomass supply chains are developed, these coal facilities should be forced to co-fire more and more biomass, until they achieve negative emissions.

We would then have all the CCS infrastructures in place, paid for by the coal industry, which could be "highjacked" by biomass, to save the planet.

A carbon price would be handy, but is not likely to emerge anywhere soon, I think.


About the actual state of bio-energy coupled to CCS: there's an ADM ethanol plant that is going to geosequester its CO2 (but that's only a small bit of CO2, from the fermentation stage - about 10% of the entire amount of CO2 that gets released over the cycle of the biofuel - so this would not result in a CO2-negative fuel). But it's a start.

Further, specific biomass-focused membranes for carbon capture have already been developed.

In any case, the advantage of biomass is that you can see it as a parasitic source of energy that can feed off everything that is being proposed in the fossil fuel sector, whether it is natural gas production+CCS (that would then be: bio-SNG + CCS), or coal+CCS, or even hydrogen + CCS. Biomass can put a foot in the door in all these pathways. Other renewables can't, they will forever remain merely "carbon neutral".


"[B]iofuel subsidies in the poor countries, if governments can afford them, should be encouraged, because they have major spin-off effects: improved agricultural production, food security, fewer environmental damages because of more efficient agriculture and so on. The FAO recently said without abundant, affordable fuels, third world farming can never become efficient; and it said biofuels can go a great way in providing these fuels, certainly now that oil prices are catastrophically high."


Personally, I would avoid making such a blanket --and simplistic --recommendation. Affordability for subsidies is an insufficient criterion. I can afford to buy myself a fancy motorcycle, but that does not mean it would be in my best interest to do so. I think we can agree that there is considerable need for improving agricultural production, securing food supplies, and reducing environmental damage in the world's poorest countries. Perhaps in some situations investment in biofuels will help address all three. But if biofuels are truly likely to be produced more cheaply than petroleum fuels, why would they need to be subsidized? And what kind of subsidies do you have in mind -- capital loans, capital grants, labour subsidies, crop subsidies, subsidies to the final product? (The devil is in the details!)


Well, I'm not an expert in subsidies - you are -, all I would say is that the subsidies, in whatever optimal form, should at least be as high as the subsidies granted to fossil fuels. And I would favor social subsidies, as the one's given in Brazil's social biodiesel program (these are actually tax breaks for companies that source feedstock from poor farmers).

Your comparison with a fancy motorcycle is way off; food security is not about being fancy. It's not about having a fancy truck to transport grains to market, it's about having a truck and fuels to run it in the first place! It's not about having a fancy tractor, it's about having a tractor and the fuel to run it in the first place...



Moreover, let's not forget that it is opportunity cost,not production cost,that matters. Palm oil, for example, may be cheap to produce. But it is commanding record prices -- on a per-litre basis ($0.85), it is more expensive than petroleum diesel. Turning palm oil into biodiesel is thus a value-subtracting activity in many countries. Moreover, the combination of rising incomes, rising population, and subsidies and mandates for biofuels means that prices for palm oil are likely to remain high over the coming year. Earlier this week it was announced by Malaysian authorities that Singaporeans would be banned from buying (subsidized) palm-oil-based cooking oil in the southern Malaysian state of Johor.


Ron, in the end, I wouldn't be against abandoning biofuel subsidies, even in poor countries. All we should be after is *improved rural incomes* - whether these come from better food production or from new fuel production, it shouldn't matter. Farm subsidies for food production can achieve virtually the same social and economic benefits as biofuel subsidies.

Just to give an example: in Malawi, the government offered fertilizer subsidies to small farmers. The result: a record crop and Malawi turned from a miserable begging bowl dependent on food aid from the EU/US, into a major maize exporter supplying the World Food Program!

Malawi's excess maize was exported, which brought in big revenues, but it could just as well have been turned into cheap ethanol, replacing $100pb oil, strengthening local energy security and bringing in CO2 reductions.


Or take India's sugarcane farmers: they have been protesting because sugar prices are so low, threatening their livelihoods. They urged their government to implement an ethanol mandate that would strengthen sugar prices. The government did, and this has immediate effects on the lives of millions of people. It could just as well have given direct price support subsidies. But the ethanol route was chosen, because it offers many other benefits, not least of them energy security.

Of course, if sugar prices become too high and damaging for the non-farming households (and especially the urban poor) in India, the logical thing is to expand production. And this is what's happening all over the world.


You often talk about opportunity costs. Well, isn't another set of those the increased incomes of farmers, the reduced poverty amongst the poorest (who are farmers) and the new access to social and economic services that comes from expanding biofuel and/or food production?

A new sugar plantation for biofuels brings in not only incomes to farmers, it brings a road (the benefits of "opening up" a region are immense), it brings access to markets, access to social services (health, education, energy), and so on, leading to first steps into modernity, into healthier and longer lives, into decreasing fertility rates, etc...... These indirect benefits are seldom taken into account, but I think they are highly important. Sometimes they are recognized, as, for example, by a panel of African Academy of Sciences who said that for these reasons, biofuels can directly contribute to the Millennium Development Goals. They bring in major spin-off effects.

But as I understand it, this is ultimately a debate about what "development" should look like and whether "modernity" is a good thing. There are some who project visions of autarky and happy poverty on poor people in the developing world, saying these poor people are not entitled to modernity, and that they should instead stick to some kind of idyllic misery. That they should not participate in the global economy. I'm not sure whether I can support this view.


(By the way, Ron, just to let you know: collegues of mine over at Biopact are going to invest in Mozambique. Not in biofuels, as one might have expected, but in maize and soybeans... for food! Biofuels have given these commodities a boost, and bring interesting possibilities for farming communities in Nampula, where they will be growing the crops. Food or biofuels, for farmers it's basically the same thing; for the first time in decades, they finally are seeing some good prices for their products! The collegues are developing a kiosk that grants micro-credit to Nampula farmers for fertilizer, herbicides, pesticides, as well as quality seeds, extension services, price info and so on.)

That is not to say that, longer term, there may not be an important role for biofuels, particularly in Africa. But we should be cautious of recommending policies, like subsidies, that once in place are difficult to remove, and that almost always spawn unintended consequences.


What would be your take on Malawi's fertilizer subsidies, which pulled the country out of food insecurity? And which would pull it out of fuel insecurity if the excess production were to be turned into ethanol?



EISA07 also calls for increasing the amount of "advanced biofuels" in the volume of biofuels used for transport. But only a potion of that has to come from cellulosic sources (16 billion gallons, or 61 billion litres, by 2022). And even those sources may include non-starchy parts of the corn plant, such as stalks, leaves and cobs.

The rest of the "advanced biofuels" quota of 5 billion gallons (19 billion litres) per year may be met by first-generation biofuels (ethanol, biodiesel) made from crops (sorghum, oilseeds, sugar beets, sugarcane) other than maize kernels.


Using the cellulosic residues of corn (not too much, because a good portion of it as to be kept on the field to enhance soil fertility and reduce erosion), changes the whole sector.

When the amount of corn-starch for the production of 15 billion gallons of first-generation ethanol is achieved, there are enough cellulosic residues to make another 15 billion gallons of "advanced" biofuels, i.e. cellulosic based. The rest of the 36 billion gallon (i.e. 6 bn) will be made up of crops other than corn (the ones you mention).

I think that's the logic behind the scheme: put a cap on corn, but keep the target high enough, because that means an enormous quantity of cellulosic material becomes available for the advanced fuels.

"Moreover, high agricultural prices are already leading to the EU abandoning certain biofuel subsidies -- e.g. the energy crop subsidy was recently phased out."

The energy-crop subsidy was a minor component of overall support for biofuels, most of which is provided through fuel-tax exemptions, tariff protection and mandates.


Minor, but it does show that subsidies are not always "difficult to remove". The energy crop subsidy was only a few years old.

But then again, as said, I'm all in favor of dropping farm subsidies in the EU and the US. As well as import tariffs for fuels produced more efficiently in poorer countries.

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