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Biofuels

Introduction to the Biofuel Industry

While the term biofuels denotes any fuel made from biological sources, for most practical uses the term refers to either biodiesel or ethanol

First, Second and Third Generation Biofuels

The chart above provides an idea of the structure and evolution of the biofuels industry. Since 2000, the industry has been characterized by significant research and experimentation of a number of feedstocks and processes.

Biodiesel

Biodiesel refers to any diesel-equivalent biofuel made from renewable biological materials such as vegetable oils, animal fats or from other biomass such as algae.

Biodiesel is usually produced by a chemical reaction (called Transesterification) in which vegetable or waste oil is reacted with a low molecular weight alcohol, such as ethanol and methanol.

Biodiesel is quite similar to fossil diesel fuel, but there are some notable differences. While the petroleum and other fossil fuels contain sulfur, ring molecules & aromatics, the biodiesel molecules are very simple hydrocarbon chains, containing no sulfur, ring molecules or aromatics. Biodiesel is made up of almost 10% oxygen, making it a naturally "oxygenated" fuel.

Bio-diesel can be used in diesel engines either as a standalone or blended with petro diesel. Much of the world uses a system known as the "B" factor to state the amount of biodiesel in any fuel mix. For example, fuel containing 20% biodiesel is labeled B20. Pure biodiesel is referred to as B100

The primary feedstocks for biodiesel are provided for various regions worldwide.

Current Feedstocks for Biodiesel Worldwide

First, Second and Third Generation Biodiesel Feedstock

First generation biodiesel feedstock

Feedstock such as soybeans, palm, canola and rapeseed are considered first generation feedstock for biodiesel production, as they were the first crops to be tried for biodiesel. Most first generation biodiesel feedstock could be used alternatively to make food for humans as well.

While the first generation feedstocks helped the biodiesel industry start off the blocks, they posed serious challenges.

• Threat to human food chain – Most      first generation feedstock had hitherto been used for food. For instance,      palm and soy were oil crops whose oils were a vital part of human food. By      diverting these food crops to produce oil for biodiesel, the world      suddenly faced a food vs. fuel crisis. Primary examples of such feedstocks      are palm and soy.

• Threat to environment – Given their      yields of oil, very large portions of land were needed to cultivate the      first generation biodiesel crops in order for them to make a significant      contribution to the world’s fuel demand. Such a necessity resulted in      countries around the world cutting down forests in order to plant these      crops. This started creating serious ecological imbalances. For instance,      palm oil is currently one of the main feedstocks for biodiesel, and two      countries, Indonesia      and Malaysia,      account for about 80% of the world's supply of palm oil. Studies in these      countries have documented how large-scale deforestation caused by the      expansion of palm production in the past few years to satisfy the world's      biodiesel demand has led to extensive damage to the environment and the      wildlife in those regions.

Second generation biodiesel feedstock

Non-food bio-feedstocks are considered as feedstock for second generation biodiesel. Energy crops such as jatropha represent the second generation biodiesel feedstock. In addition, using technologies such as biomass to liquid (BTL), many other non-food crops could be converted to biodiesel. These feedstocks have the advantage of not affecting the human food chain by them being diverted to make fuel.

While feedstock belonging to the second generation do not typically affect the human food chain and can be grown in marginal and wastelands, these feedstock might still not be abundant enough to replace more than 20-25% of our total transportation fuels.

Third generation biodiesel feedstock

Feedstocks such as algae are considered to belong to the third generation of biodiesel feedstocks. These feedstock offer superior yields when compared to second generation feedstock while at the same time not directly affecting the human food chain. In addition, crops such as algae can be grown in places that are not suitable for agriculture, thus providing superior overall ecological performances as well.

As a result of the above advantages, many experts opine that only the third generation biofuel feedstocks have the potential to replace most or all of the fossil fuel demand worldwide.

Ethanol

Ethanol is a clean-burning, high-octane fuel that is produced from renewable sources. Because ethanol can be produced domestically in most countries, it helps reduce dependence upon foreign sources of energy for these countries.

Ethanol is beginning to be used all around the world as a transportation fuel, and it has some distinct advantages.

Fuels that burn too quickly make the engine "knock". The higher the octane rating, the slower the fuel burns, and the less likely the engine will knock. When ethanol is blended with gasoline, the octane rating of the petrol goes up by three full points, without using harmful additives.

Adding ethanol to gasoline "oxygenates" the fuel. It adds oxygen to the fuel mixture so that it burns more completely and reduces polluting emissions such as carbon monoxide.

Any amount of ethanol can be combined with gasoline, but the most common blends are:

• E10 - 10% ethanol and 90% unleaded gasoline. E10 is approved for use in any make or model of vehicle.

• E85 - 85% ethanol and 15% unleaded gasoline. E85 is an alternative fuel for use in flexible fuel vehicles (FFVs). There are currently millions of FFVs on roads today (over 6 million in the US alone).

It is important to note that it does not take a special vehicle to run on "ethanol". All vehicles can use E10 with no modifications to the engine. E85 is for use in a flexible fuel vehicle. A flexible-fuel vehicle (FFV) is an alternative fuel vehicle with an internal combustion engine designed to run on more than one fuel, usually gasoline blended with either ethanol or methanol fuel. In FFVs, both fuels are stored in the same common tank.

Ethanol Feedstock

 Current Feedstocks Used for Ethanol Worldwide

First and Second Generation Ethanol Feedstock

 First generation ethanol feedstock

The first generation ethanol feedstock comprised corn, sugarcane, maize etc. To a large extent, these feedstocks are still in use in many countries. Similar to feedstocks for biodiesel, these feedstocks have the problems of adversely affecting food prices (as these are also used for food) and inability to scale owing to constraints on land areas available for cultivation. Ethanol derived from these feedstocks typically uses the starch component present in them.

Second generation ethanol feedstock

In the case of the first generation ethanol feedstocks, ethanol was derived from the fermentation of ths starch component of the plants. Many parts of the plants also contain sugars called cellulose and hemicellulose. These can be converted into ethanol as well; however, due to the fact that cellulose is usually bound by polymers called lignin, converting cellulose and hemicellulose into simpler sugars and then into ethanol will require separating cellulose from lignin.

A large number of biomass feedstocks are rich in cellulosic material. These feedstocks are referred to as the second generation ethanol. With these feedstocks, ethanol is derived not from the starch component, but from the lignocellulosic component of the feedstock. A large number of wild plants, and even plant waste, contain lignocellulose; as a result, the second generation ethanol feedstocks overcome the two main bottlenecks for the first generation feedstock: adverse effects on food prices and inability to scale.

Present and Future Potential for Biofuels 

Global biofuels production has tripled from 4.8 billion gallons in 2004 to about 16.0 billion gallons in 2007, but still accounts for less than 2 percent of the global transportation fuel supply.

Production of biofuels is expected to increase multifold between 2007 and 2030. Some country snapshots are listed below:

• Global ethanol production more than doubled between 2000 and 2005, to more than 34 billion liters (9 billion gallons).  From 2007 to 2008, production dramatically rose again, increasing from 49 to 65 billion liters (13 to 17.2 billion gallons), a growth rate of 33%.  Global production of biodiesel, starting from a much smaller base, expanded significantly during the period 2004-08.
• The US has been a prime driver of growth in ethanol as biofuel.
• In Brazil, already the world's largest ethanol producer, a study conducted by the University of Campinas for the Ministry of Science and Technology showed that the country could lift annual exports of ethanol derived from sugarcane to 200 billion litres (53 billion gallons) by 2025.
• Several other developing countries (eg Thailand, India, China) are strengthening their production and use of biofuels, and Malaysia has announced its intention of producing biodiesel from palm oil for export to Europe.
• In Australia, the government has set an annual target of 350 million litres (93 million gallons) of biofuel production by 2010.

Ethanol – Current and Future Potential

 2007 World Fuel Ethanol Production

Trends in Ethanol from Various Feedstocks

Corn Ethanol

• Corn is used as the feedstock for fuel ethanol      production primarily in the US.
• While ethanol from corn gave a quick start to the      ethanol fuel industry, especially in the US, corn-based ethanol has      come under increasing pressure since then.
• Corn-based ethanol production has been blamed for the      rise in food prices in the US      in recent years.
• The significant increase in land-use for      ethanol-producing corn has also made the feedstock quite unpopular in the US.
• Starting 2009, corn-ethanol producers have come under      pressure due to declining ethanol prices and rising corn prices.  Tight margins have led some production      facilities to close down.
• Most severely, some corn ethanol producers have gone      into bankruptcy. In 2005 when the ethanol industry started expanding, corn      prices were below $2 per bushel compared to over $3 in Jan 2009 in the US.      At the same time, ethanol prices in Jan 2009 were under $1.50 per gallon      at the plant and have dropped by over $1.00 since the previous summer’s      high. There are many reasons for this decline, including falling crude oil      prices, rising ethanol inventories, new ethanol plants coming on-line and      other reasons.

Sugarcane Ethanol

• A sharp increase in the use of sugarcane for ethanol      is being witnessed in South Asia.
• Brazil      leads the world in sugarcane-based ethanol; in Brazil, the land used for      sugarcane for ethanol production is capped at a fairly large amount of 45 million      hectares, facilitated by the the large area of pasture land in the      centre-south region.

Ethanol from Grains (and Beet)

• Production assumed to increase by at least 10% per      year (more, if existing OECD policies justify a larger increase) through      2010.
• Max 10% of cropland in US, Canada and EU (7% for wheat      and 3% for sugar beets, in EU). Max 5% of cropland in other countries.
• Initial yields at 2 500 litres/ha for wheat (EU), 3      000 litres/ha for North American maize and 5 000 litres/ha for European      sugar beets), growing 0.8% per year.

Lignocellulosic Ethanol

• Quick growth from 2010 to 2020, continued growth      (lower) after 2020.
• Production assumed to yield 2 300 litres/ha of      gasoline equivalent in 2005 and grow to 4 000 litres/ha by 2050.
• Feedstocks grown on less than 5% of the global      pastureland.

Brazil is the world’s largest producer and exporter of ethanol, producing 282,000 barrels per day in 2005. 2010 production is forecast at 442,000 barrels per day. Over half of all cars in the country can run on 100 per cent ethanol or an ethanol-petrol mixture.

Ethanol Production Countrywise

Canada 

The prospects for the ethanol industry in Canada improved substantially after the government in Ottawa has pledged financial support to the tune of Canadian $100 million for the sector in the framework of its Kyoto commitments. Under the plan, E-10 blends are to achieve a 35% market penetration by 2010, a figure that in today's terms represents 1.33 billion litres per year.

The European Union

Fuel ethanol production in the European Union has not really taken off yet. However, it may do so in the next couple of years. The main drivers will be two biofuel directives by the European Commission. The first directive, which is promotional in nature, has been approved in May 2003. Member states will now have to try to achieve a 2% share of renewables by the end of 2005 and a 5.75% share by end 2010. As a basis for reference, the energy content of all gasoline for transport placed on the market will be used.

India 

The success of ethanol in India will depend to a significant degree on pricing. The sugar industry originally claimed that it could provide ethanol at 19 rupees per litre (about $0.38/litre), which is at a lower cost than the product it would substitute, methyl tertiary butyl ether (MTBE), which costs 24-26 rupees per litre ($0.49-0.53/litre). The oil industry however is seeking parity between ethanol and the price of gasoline on an ex-refinery or import basis. In April 2002 the government announced an excise duty exemption. Implementation of the excise duty for ethanol, however, was delayed owing to a variety of reasons.

China 

China is now home to the world's largest fuel ethanol plant. The Jilin Tianhe Ethanol Distillery has an initial capacity of 600,000 tonnes a year or 2.5 million litres per day. Potential final capacity can be raised to 800,000 tonnes per year. Ground breaking took place in September 2001 and by late 2003 the first trials had started.

In November 2002 construction on a plant designed to produce 300,000 tonnes of fuel ethanol annually started in Nanyang,  Henan province. The project, built by the Tianguan Ethanol Chemical Group Co., Ltd. (TICG), is expected to cost $155 million and take two years to complete. Combined with the company's existing facility, TICG's total fuel ethanol capacity would reach 500,000 tonnes a year

The United States

The second largest exporter of ethanol in 2003 was the United States. Ethanol producers in the US distilled a record quantity of more than 10.6 billion litres in 2003, mostly derived from corn. Under the renewable fuels standard (RFS), renewable fuels are to grow to almost 20 billion litres by 2012.

The arrows for Clean Air Act in 1990 and 1995 represent amendments to Clean Air Act. In 2000, more stringent guidelines were added to the Act.

RFS – Renewable Fuel Standard program; the arrow for 2006 represents new standards passed in 2006

MTBE - Methyl Tertiary Butyl Ether (In June 2000,  more stringent reformulated gasoline program was initiated, which necessitated the use of MTBE in gasoline)

Biodiesel – Current and Future Potential

Biodiesel Trends

Biodiesel could be produced from oilseeds by extraction of oil and transesterification of the resulting oil. This is the traditional method of biodiesel production. Another method, called BTL or biomass to liquid, is less common but emerging as a viable alternative. This method produces biodiesel from biomass using a process called gasification, followed by a chemical synthesis. Trends for biodiesel from both these methods are given below.

Regionwise Biodiesel Trends

• In the United  States, Canada and Europe, it is predicted that strong policy drivers could result in biodiesel ramp-up rate similar to that for ethanol.
• For the mandates and plans that various regions have for biodiesel, land requirements are below 10% of the total cropland of the EU, United States and Canada, and initial yields are assumed to be about 1200 litres/ha for feedstocks such as rapeseed.
• In Brazil, biodiesel from soy is assumed to expand cultivation on pastureland, but to remain below 5% of current cropland.
• In some of the other world regions, for biodiesel, production patterns with land requirements have been capped at 5% of the total available cropland.
• BTL biodiesel (through gasification and chemical synthesis) is expected to be fully commercialised by 2015.

Biofuel Mandates, Initiatives and Incentives

Government & Other Public Mandates & Initiatives

The table below provides details on use and blending share targets (T) and mandates (M) for liquid biofuels that can be met by either ethanol or biodiesel 

 Source: Global Subsidies Initiative based on country reports, September 2007 

European Union

EU Member States Goals for the Use of Biofuels as Transportation Fuel

Note: (a) Updated or proposed mandate, previous mandate bracketed, (b) volume based (c) biodiesel only, NA – not available

Second Generation Biofuels

Third Generation Biofuels

Renewable Energy

Solar Energy

Wind energy

Hydro Energy

Ocean Energy

Geothermal Energy

Hydrogen Energy

See also

An overview of biofuels

Here is a list of biofuel research reports

Review on the Biofuel Market

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