Biofuel Development: Food, Fodder and Fuel Security Related
Issues in Canada and India
(Suwa Lal Jangu & Kausik Ghosh)*
Today, world face the urgent need to reduce energy use and diversify energy supply as a way to lesser the risks from global warming and other environmental, security, and economic disasters. Based on current projections, no single renewable energy technology— including biofuels—will be able to compensate for all current and projected energy use. Too much reliance on imported oil has been disastrous, but so too would be overdependence on fuels from agriculture. Pushing biofuels beyond the limits of sustainability would undo all of their positive value. Worldwide, efforts to replace oil with biofuels are at a critical juncture. Biofuels have a limited role in India due to land limitation and food security issues. The matter of energy security has been a key driver of biofuel policies in the developed countries like Canada. Double-digit growth in ethanol biofuel and biodiesel use during the past three years has contributed to a rapid increase in food, feed grain, and prices, as well as a sharp environmental backlash. Evidence is building that the biofuels industry is creating a host of ecological problems while failing to deliver real reductions in greenhouse gas emissions. Demand for biofuels is also creating global pressure for carbon-emitting deforestation and land conversion, as food and fuel compete for scarce resources.
Biofuel: Introduction
Biofuels are liquid or gaseous fuels made from biomass. The sources of biomass that can be used to produce biofuels include starches from cereals, grains and sugar crops; hemocellulosic and cellulosic materials from grass, trees and waste products from agriculture and forestry; animal fats and vegetable oils; organic waste materials and animal manure (IEA 2004). The discussion in this paper focuses on the most widely produced and consumed biofuels today (sometimes called first generation biofuels): ethanol, biodiesel and biogas.
Biofuel is any fuel that is derived from biomass - recently living organisms or their metabolic byproducts, such as manure from cattle. Biomass is made from many types of waste organic matter (both animal and vegetable) such as crop stalks, tree thinning, wooden pallets, construction waste, chicken and pig waste, agricultural waste and lawn trimmings. It is a renewable energy source, unlike other natural resources such as petroleum, coal, and nuclear fuels. Biodiesel is produced from vegetable oils or fats -- including used cooking oils -- with properties similar to petrol-based diesel.
Biodiesel fuels are oxygenated organic compounds - methyl or ethyl esters - derived from a variety of renewable sources such as vegetable oil, animal fat, and cooking oil. The oxygen contained in biodiesel makes it unstable and requires stabilization to avoid storage problems. Rapeseed methyl ester (RME) diesel, derived from rapeseed oil, is the most common biodiesel fuel available in Europe. In the United States and Canada, biodiesel from soybean oil, called soy methyl ester diesel, is the most common biodiesel. Collectively, these fuels are referred to as fatty acid methyl esters (FAME). In India, biodiesel from jatropa and sugarcane ethanol while in Canada biofuel derived from maize, corn and soybean.
The biomass on the basis of utilising varieties of biomass materials (like agro residues, crop, vegetables, industrial residues or wastages, animal manure or cowdungs, animal skin, etc) and the adoption of conversion technologies like combustion, pyrolysis, gasification, etc. biofuels are classified into traditional and modern biofuel. But base of the technological applications in the processing of biofuel, are classified into four generation. The production process consists of conversion of biomass to fermentable sugars, fermentation of sugars to ethanol, and the separation and purification of the ethanol.
There are also agricultural products specifically grown for biofuel production including corn, switchgrass, and soybeans, primarily in the United States; rapeseed, wheat and sugar beet primarily in Europe; sugar cane in Brazil; palm oil and miscanthus in South-East Asia; sorghum and cassava in China; and jatropha and pongamia pinnata in India; pongamia pinnata in Australia and the tropics. Hemp has also been proven to work as a biofuel. Biodegradable outputs from industry, agriculture, forestry and households can be used for biofuel production, either using anaerobic digestion to produce biogas, or using straw, timber, manure, rice husks, sewage, and food waste. Biomass can come from waste plant material. The use of biomass fuels can therefore contribute to waste management as well as fuel security and help to prevent global warming, though alone they are not a comprehensive solution to these problems.
First generation biofuel
'First-generation biofuels' are biofuels made from sugar, starch, vegetable oil, or animal fats using conventional technology. UN biofuels report First-generation biofuels rely on food crops as their feedstock. Corn, soy, palm and sugarcane all have readily accessible sugars, starches and oils. So brewing them into biofeuls simply involves either fermenting the sugars or chopping up the fatty oils through transesterfication. The basic feedstocks for the production of first generation biofuels are often seeds or grains such as wheat, which yields starch that is fermented into bioethanol, or sunflower seeds, which are pressed to yield vegetable oil that, can be used in biodiesel. These feedstocks could instead enter the animal or human food chain, and as the global population has raised their use in producing biofuels has been criticised for diverting food away from the human food chain, leading to food shortages and price rises. The most common first generation biofuels are listed below.
Vegetable oil
Edible vegetable oil is generally not used as fuel, but lower quality oil can be used for this purpose. Used vegetable oil is increasingly being processed into biodiesel, or (more rarely) cleaned of water and particulates and used as a fuel. Vegetable oil is the most common biofuel in Europe. It is produced from oils or fats using transesterification and is a liquid similar in composition to fossil/mineral diesel. Its chemical name is fatty acid methyl (or ethyl) ester (FAME). Oils are mixed with sodium hydroxide and methanol (or ethanol) and the chemical reaction produces biodiesel (FAME) and glycerol. One part glycerol is produced for every 10 parts biodiesel. Feedstocks for biodiesel include animal fats, vegetable oils, soy, rapeseed, jatropha, mahua, mustard, flax, sunflower, palm oil, hemp, field pennycress, pongamia pinnata and algae. Pure biodiesel (B100) is by far the lowest emission diesel fuel. Biodiesel can be used in any diesel engine when mixed with mineral diesel.
Since biodiesel is an effective solvent and cleans residues deposited by mineral diesel, engine filters may need to be replaced more often, as the biofuel dissolves old deposits in the fuel tank and pipes. It also effectively cleans the engine combustion chamber of carbon deposits, helping to maintain efficiency.1 Biodiesel is also an oxygenated fuel, meaning that it contains a reduced amount of carbon and higher hydrogen and oxygen content than fossil diesel. This improves the combustion of fossil diesel and reduces the particulate emissions from un-burnt carbon. In the USA, more than 80% of commercial trucks and city buses run on diesel.
Bioalcohols
Ethanol is manufactured from microbial conversion of biomass materials through fermentation. Ethanol contains 35% oxygen. Ethanol is “denatured” prior to leaving the plant to make it unfit for human consumption by addition of a small amount of products such as gasoline. Fermentation initially produces ethanol containing a substantial amount of water. Distillation removes the majority of water to yield about 95% purity ethanol, the balance being water. This mixture is called hydrous ethanol. If the remaining water is removed in a further process, the ethanol is called anhydrous ethanol and is suitable for blending into gasoline.
Ethanol fuel is the most common biofuel worldwide, particularly in Brazil. Alcohol fuels are produced by fermentation of sugars derived from wheat, corn, sugar beets, sugar cane, molasses and any sugar or starch that alcoholic beverages can be made from (like potato and fruit waste, etc.). The ethanol production methods used are enzyme digestion (to release sugars from stored starches, fermentation of the sugars, distillation and drying. The distillation process requires significant energy input for heat (often unsustainable natural gas fossil fuel, but cellulosic biomass such as bagasse, the waste left after sugar cane is pressed to extract its juice, can also be used more sustainable). Ethanol can be used in petrol engines as a replacement for gasoline; it can be mixed with gasoline to any percentage.
In the current alcohol-from-corn production model in the United States, considering the total energy consumed by farm equipment, cultivation, planting, fertilizers, pesticides, herbicides, and fungicides made from petroleum, irrigation systems, harvesting, transport of feedstock to processing plants, fermentation, distillation, drying, transport to fuel terminals and retail pumps, and lower ethanol fuel energy content, the net energy content value added and delivered to consumers is very small. And, the net benefit (all things considered) does little to reduce un-sustainable imported oil and fossil fuels required to produce the ethanol.2 [1]
Although ethanol-from-corn and other food stocks has implications both in terms of world food prices and limited, yet positive energy yield (in terms of energy delivered to customer/fossil fuels used), the technology has lead to the development of cellulosic ethanol. Alcohol mixes with both petroleum and with water, so ethanol fuels are often diluted after the drying process by absorbing environmental moisture from the atmosphere. Butanol is an alcohol that can be produced by fermentation of the same types of sugar sources that are used for ethanol. As it can also be produced from fossil fuels, it is called “biobutanol” when it is derived from biomass.
Butanol has various advantages over ethanol: it delivers more energy, evaporates more slowly, and can be transported by pipeline. According to DuPont, existing ethanol plants can be economically converted to produce biobutanol. In June 2006, British Petroleum announced that it would make biobutanol commercially available in the United Kingdom in 2007. With large current un-sustainable, non-scalable subsidies, ethanol fuel still costs much more per distance traveled than current high gasoline prices in the United States.[2] Biofuels are made from crops like corn, wheat, sugar and palm oil, which are refined into ethanol or oil. They are used as an environmental friendly alternative to gasoline and diesel as they release lower quantities of CO2 when burned.3
Methanol is currently produced from natural gas, a non-renewable fossil fuel. It can also be produced from biomass as biomethanol. The methanol economy is an interesting alternative to the hydrogen economy, compared to today's hydrogen produced from natural gas, but not hydrogen production directly from water and state-of-the-art clean solar thermal energy processes.[3]
Bioethers (also referred to as fuel ethers or fuel oxygenates) are cost-effective compounds that act as octane enhancers. They also enhance engine performance, whilst significantly reducing engine wear and toxic exhaust emissions. Greatly reducing the amount of ground-level ozone, they contribute to the quality of the breathing air. [4] & [5] Biogas is produced by the process of anaerobic digestion of organic material by anaerobes. It can be produced either from biodegradable waste materials or by the use of energy crops fed into anaerobic digesters to supplement gas yields. The solid byproduct, digestate, can be used as a biofuel or a fertilizer. In the UK, the National Coal Board experimented with microorganisms that digested coal in situ converting it directly to gases such as methane.
Syngas, a mixture of carbon monoxide and hydrogen, is produced by partial combustion of biomass. The resulting gas mixture, syngas, is itself a fuel. Using the syngas is more efficient than direct combustion of the original biofuel; more of the energy contained in the fuel is extracted. Syngas may be burned directly in internal combustion engines or turbines. The wood gas generator is a wood-fueled gasification reactor mounted on an internal combustion engine. Syngas can be used to produce methanol and hydrogen, or converted via the Fischer-Tropsch process to produce a synthetic diesel substitute, or a mixture of alcohols that can be blended into gasoline.
Solid biofuels are including wood, sawdust, grass cuttings, domestic refuse, charcoal, agricultural waste, non-food energy crops (see picture), and dried manure. Another solid biofuel is biochar, which is produced by biomass pyrolysis. Biochar pellets made from agricultural waste can substitute for wood charcoal. In countries where charcoal stoves are popular, this can reduce deforestation.
Second Generation Biofuels
Second generation biofuels examples include straw, timber, manure, rice husks, sewage, and food waste. Second-generation biofuels use lignocellulosic biomass as feedstock, among them dedicated biofuel crops like switchgrass and agricultural residue such as corn stalks. Using specially designed microorganisms, the feedstock’s tough cellulose is broken down into sugar and then fermented. Alternatively, a thermochemical route can be taken whereby the biomass is gasified and then liquefied, a process known as “biomass-to-liquid.”
Supporters of biofuels claim that a more viable solution is to increase political and industrial support for, and rapidity of, second-generation biofuel implementation from non food crops, including cellulosic biofuels.4 These include waste biomass, the stalks of wheat, corn, wood, and special-energy-or-biomass crops (e.g. Miscanthus). Second generation (2G) biofuels use biomass to liquid technology.5 [6] Many second generation biofuels are under development such as biohydrogen, biomethanol, Dimethylfluran (DMF), Bio-DME, Fischer-Tropsch diesel, biohydrogen diesel, mixed alcohols and wood diesel. Cellulosic ethanol production uses non food crops or inedible waste products and does not divert food away from the animal or human food chain. Lignocellulose is the "woody" structural material of plants. This feedstock is abundant and diverse, and in some cases (like citrus peels or sawdust) it is a significant disposal problem.6
In addition, research conducted at TU Delft by Jack Pronk has shown that elephant yeast, when slightly modified can also create ethanol from non-edible ground sources (e.g. straw)7. The recent discovery of the fungus Gliocladium roseum points toward the production of so-called myco-diesel from cellulose. This organism was recently discovered in the rainforests of northern Patagonia and has the unique capability of converting cellulose into medium length hydrocarbons typically found in diesel fuel.8 [7] Scientists also are working on experimental recombinant DNA genetic engineering organisms that could increase biofuel potential.
Third-Generation-Biofuels
Rather than improving the fuel-making process, third-generation biofuels seek to improve the feedstock. Designing oilier crops, for example, could greatly boost yield. Scientists have designed poplar trees with lower lignin content to make them easier to process. Researchers have already mapped the genomes of sorghum and corn, which may allow genetic agronomists to tweak the genes controlling oil production. Algae fuel, also called oilgae or third generation biofuel, is a biofuel from algae. Algae are low-input, high-yield feedstocks to produce biofuels. It produces 30 times more energy per acre than land crops such as soybeans.9 With the higher prices of fossil fuels (petroleum), there is much interest in algaculture (farming algae). One advantage of many biofuels over most other fuel types is that they are biodegradable, and so relatively harmless to the environment if spilled.10, 11& 12 Second and third generation biofuels are also called advanced biofuels. Algae, such as Botryococcus braunii and Chlorella vulgaris, are relatively easy to grow, but the algal oil is hard to extract. There are several approaches, some of which work better than others.
Fourth-Generation-Biofuels
Fourth-generation technology combines genetically optimized feedstocks, which are designed to capture large amounts of carbon, with genomically synthesized microbes, which are made to efficiently make fuels. Key to the process is the capture and sequestration of CO2, a process that renders fourth-generation biofuels a carbon negative source of fuel. Scientists at the University of Essex have discovered a new mechanism that regulates the process of carbon fixation in plants. The research published in the Proceedings of the National Academy of Sciences, could lead to improvements in so-called “fourth-generation” biofuels by letting scientists design feedstocks that capture more carbon (hat tip to Biopact).[9]
Biodiesel: Potentialities and Problems
Interest in using cellulosic materials to produce ethanol has been growing as the limitations of making ethanol from corn and sugar become more apparent. Cellulosic feedstocks have the potential to be much more energy efficient and radically reduce emissions of greenhouse gases. The problem in producing ethanol from cellulosic biomass is that it is much more difficult and expensive. It is unclear at this time if commercial cellulosic ethanol production will be become a reality in Canada in the near future. A lot of crop residues are available for use each year. However, the relatively short growing season across North America and Europe makes it difficult to achieve high yields. The logistics and costs of harvesting, collection, storage and distribution of the huge quantity of bulky materials required to supply the feedstock requirements for a commercial ethanol plant throughout the year are the biggest obstacles.13
Many farmer groups and rural communities are interested in developing a biodiesel industry in Canada. Biodiesel is cleaner burning than petroleum-based diesel fuel; cuts exhaust emissions, including black smoke, odour, greenhouse gases, air toxins and particulates. Emissions from biodiesel contain virtually no sulphur oxides or sulphates. Pure biodiesel is non-toxic and is completely biodegradable. However, the increasing price of feedstock (as a result of the boom in ethanol production from canola in the United States) seriously impedes development of a biodiesel industry in North America. In addition, there are technical issues related to quality, cost and consumer acceptance of biodiesel.
In particular, biodiesel has a much lower cloud point than petroleum diesel and even small proportions of biodiesel in regular diesel fuel can cause flow problems in cold weather. North American truckers are concerned about the cost and quality of biodiesel as these factors affect competitiveness. Major fuel distributors are reluctant to offer biodiesel at their retail outlets until this major group of consumers is satisfied.14 Coupled with increasing oil prices, increasing awareness of the global impacts of greenhouse gases has led to concerns over the continued consumption of fossil fuels worldwide. Consequently, many developed and developing countries have considered the possibility of large-scale production and sue of biofuels, such as bio-ethanol and bio-diesel, as alternatives to hydrocarbon fuels.[10] Anaerobic digestion of biomass, such as manure or organic wastes, produces a combustible fuel called biogas.
Purified biogas can be used for many of the same purposes as natural gas but its most likely application is to generate heat and electricity. Electricity can be used on the farm or sold to electricity distribution companies. In Germany, Austria and other parts of Europe, electrical companies have been forced to purchase electricity generated from biogas at very favourable prices. This has stimulated the growth of biogas facilities in those countries. At the present time, electricity generated using biogas in Canada is not competitive on a cost basis with traditional sources of electricity (from gas, oil, coal, and hydro) but small scale projects may be cost effective and provide environmental benefits.
There’s been a great deal of debate recently over first-generation, or food-based, biofuels. Meanwhile, a breakthrough to commercialize second-generation, or lignocellulosic, biofuels has yet to materialize. So how is biofuel industry already jumping to the fourth generation? It has broken down their evolution below, including making note of any related startups. Have biofuels been around long enough for there to be four generations of them? Those in the biofuel industry think so. The problems with first-generation biofuels are numerous and well-documented in the media, ranging from net energy losses to greenhouse gas emissions to increased food prices. Most biofuel startups are not working with first-generation feedstocks but biofuel distribution startups, such as Propel Biofuels and Conserv Fuel, are working almost exclusively with food-based biofuels because that’s all that’s currently available.
A lot of venture funding is going into second-generation biofuels startups as race to develop a single, cost-effective process for producing biofuels.15 However, the weak link is carbon capture and sequestration technology, which continues to elude the coal industry. It said that Synthetic Genomics can make moot the issue of CO2 capture. His company plans to combine the processes of feedstock growth and fuel processing by designing organisms that will inhale CO2 and excrete sugars. This will see if these potentially world-saving bugs become a reality in the next 18 months.16
New Generation Biofuel Future
New generation biofuels can be roughly divided into two groups: fuels, which use biomass as a raw material and systems where living organisms (or biomimicing devices) produce some liquid fuel, hydrogen or other gas directly from sunlight and carbon dioxide. Biomass based biofuels are already close to real application and their breakthrough is mostly dependent on oil price. However, accumulation of biomass is thermodynamically inefficient process and the conversion of biomass into the form liquid fuel decreases the efficiency more. Biomass has very low efficiency to store energy from sunlight and even in ideal situation they can replace only some percents from fossil fuels.
Anyway, they are considered to be a good business when oil prices increases enough. Biomass independent systems, in contrast, have very high efficacy in theory, and have real potential to replace fossil fuels. However, there are still unsolved technical barriers against the real breakthrough of biomass free systems. Nowadays ethanol and biodiesel are produced from the same raw materials than food. This is very inefficient and ethically daunting way for fuel production. In order to make system more sustainable, the first step is to replace food-based raw materials by more efficient and ethical feedstock. Practically this means organic waste falls, forests and special bioenergy crops and algae. Considerable number of research and development is going on in this field.
The idea behind is to convert the biomass into the form of biofuel. Most of the resources are in development of physical, chemical and biochemical processes that can be used to produce biofuels from whatever bulk biomass. Other important area is to explore and develop new plants, which are more suitable for biofuel production as compared to the traditional food crops. Agro, forest and oil industry is already involved in developing these systems and they no doubt believe that this will be a business. Indeed, the conversion of bulk biomass into liquid fuels can strongly increase the biofuel production. However, to be honest, biomass never can replace oil, unless the energy consumption on human population will drop to a fraction of the present one, which will not happen without nuclear war-like catastrophe.
The fundamental problem of biomass is that plants store the energy from sunlight into their biomass very inefficiently. Plants are not evolved to be the feedstock of energy production for human activities. In order to make accumulation of biomass more efficient plants must be pushed to store solar energy many times more efficiently than they do in the nature. However, plants are so complicated organisms that most probably this will be a mission impossible. As compared to real plants, unicellular algae are simpler and easier to manipulate. Only one type of cell does the all tasks from harvesting the light energy to storage of the energy and for reproduction.
Moreover, algae can grow in seawater, which is a great advance when compared to plants. Under certain conditions algae can double the biomass in one day and large share of this biomass can be starch or oil, which are easy and energy efficient to convert into form of alcohol or biodiesel. This means that algae can be much more efficient feedstock for biomass based biofuels than higher plants, particularly for biodiesel formation. The most promising feature of algae is, however, that they can produce molecular hydrogen directly from sunlight and water. In the nature, this pathway is a kind of emergency valve and function only under very specific conditions. As such, it has very minor capacity in natural algae. The existence of this pathway, however, gives a great opportunity to bioscientists to use metabolic engineering in order to make hydrogen production very efficient.[11]
Biofuel technologies are evolving rapidly. They have received some bad press because current production is dominated by inefficient first generation techniques that exert pressures on food markets and that present environmental problems. But a combination of plant biology, carbon capture techniques and novel bioconversion processes is set to open an era of fuels that will not only be abundant, highly energy efficient and clean, but that will be the single biggest weapon in the fight against climate change.
Fourth generation carbon-negative biofuels are actually machines that take CO2 out of the atmosphere; they clean up our dirty past. The confluence of developments in plant biology and biotechnology, in carbon capture and storage techniques and in innovative bioconversion methods makes it possible to begin to imagine a ‘fourth generation’ of biofuels and bioenergy systems. The first steps towards such fuels are already being taken.[12]
Alternatives to biofuels such as ethanol from sugarcane could still help support economies. Sugarcane is the most viable alternatives to biofuels like ethanol. However, accumulation of biomass is thermodynamically inefficient process and the conversion of biomass into the form liquid fuel decreases the efficiency more. Biomass has very low efficiency to store energy from sunlight and even in ideal situation they can replace only some percents from fossil fuels.
Virtually all countries that are involved in the production of biofuels have programs that support research on biofuels, much of it aimed at developing more efficient processes for converting plant-based starches and cellulose to alcohol. This production-oriented research has been instrumental in bringing down the average costs of producing biofuels. The largest ethanol cost component is the plant feedstock. Research into higher yields of feedstock grains can achieve important reductions in the average cost of producing biofuels.
As a result of on-going research, the International Energy Agency estimates that within ten years, the cost of producing a litre of ethanol made from cellulose will decline by about half and the cost of producing a litre of ethanol from corn will decline by about 14%. Importantly, many economic issues require comprehensive and thorough research in the developed countries. The costs and benefits of establishing a biofuels industry still are largely unknown. Next-generation renewable fuels, produced from non-food feedstocks such as wheat straw, corn stover, wood residue and switchgrass, have the potential to generate even greater environmental benefits than traditional renewable fuels.[13]
Benefits from New Generation Biofuels
The main benefit is that there is no competition with food supply. These alternatives are also very efficient. In theory, solarbiohydrogen can be a real option for fossil fuels. The benefits of Biofuel are following: Feedstock can produce through designed energy crops with improved carbon storage, higher yeilds; bioconversion process like fermentation, gasification, and fast-pyrolysis; carbon balance for example carbon-negative, CO2 out of atmosphere and energy balance in way of waste heat used for carbon capture & storage. The following benefits of new generation biofuels are:
1. In general, sunlight is the driving force of the all new systems. Because algae can grow in salt water, the needed water can be pumped from the seas. When the microalgal solarbiohydrogen systems will be fully developed, indeed, the limiting factor for hydrogen production will be size of bioreactors and availability of solar energy for algal photosynthesis. In present world, there is nearly absolute negative correlation between GDP and high mean daily irradiance.
2. The basic idea of new generation biofuels is not to compete with resources needed to food production. If in the future the sunny poor countries will be real players in global energy market, it means resources for them. Technology transfer must be linked to the requirements providing that the benefits will be used to modernize the whole society starting from agriculture. There would be a hydrogen economy in the future. Ethanol is not the best solution and alternative of biofuel for future economies. Biodiesel from microalgae is a very attractive option for the future economies.
3. Biomass based systems are quite easy. Basically there are new technologies, but low energy prices hinder the scaling up of the pilot scale plants. When the oil price reaches a certain threshold, these technologies will take their part in the energy market. Solarbiohydrogen, artificial photosynthesis and other these kinds of more advanced systems are still under development and some fundamental questions need to be solved before commercialisation. However, the concept is clear and there shouldn't be anything in this respect that is not possible to solve. What is needed to make the system run is money and smart people. If industry starts to finance the projects, investments must be a part of their long-term business strategy. Society has to accept genetic manipulation.
4. In advanced bioenergy field can't do anything without all the tools of modern biotechnology. Anti Genetically Modified Organism (GMO) people really should think what the price of banning GMOs would be. In general, when massive amounts of hydrogen flow out from bioreactors, everything after that will go fluently. The transfer from an oil economy to a hydrogen economy is just a set of political decisions.
Hopes for the Second-Generation Biofuels
As politicians and policy makers begin toning down their tributes to first-generation biofuels, they're not giving up on the concept altogether. What didn't work the first time around, the thinking seems to be, might succeed on a second try.17 Instead of using rapeseed, wheat or corn, Chroen will use forest residue and waste wood to produce its Sun Diesel, which it claims is head and shoulders above anything on the market today.18 Second-generation fuels could help the car industry meet climate-protection goals without it having to make too many sacrifices. Synthetic fuels from biomass have the potential -- to become a central pillar in climate-friendly energy supply.
But the word "potential" is a key question here, since second-generation biofuels are not yet proven, nor market ready. It remains to be seen whether these new fuels will become economically viable over the next decade, if ever. They will need large-scale subsidies for the foreseeable future. High costs are still a major factor. There are logistical challenges of transporting biomass material to large production facilities, which could impose a floor on costs that would be difficult to lower. And there is the land issue. For large-scale production, there are fears that farmers would be tempted to turn fields over to tree plantations for second-generation biofuels instead of wheat or rice fields -- a scenario which, again, could affect food availability.
There is too much focus on this new generation of fuel, and not enough on energy or automobile efficiency and other strategies that could be put in place now. It may be in 20 or 30 years or 40 years, When there is a big potential (for second-generation biofuels), if they work. But in 40 years, there will be need to have a lot of answers that are clear. Otherwise, there'll have a very big problem. European leaders have stressed they are interested in "second generation" biofuels including leaves, straw and pond algae. Biofuels currently under production – biodiesel and ethanol – are made from wheat, corn and sugar beets. But there is skeptical view about using second generation biofuels. That will take 10 to 20 years.[14]
Sustainable Biofuel Production
Environmentalist organizations are critical of the EU plan to blend diesel with biodiesel to combat climate change is detrimental. Around 20 percent blend diesel is soy oil rather than rapeseed oil from the EU countries harvest. EU's blending policy would not help to fight global warming since soy oil imports largely came from South America, where tropical rain forests were being slashed to cultivate soybeans. Huge areas of tropical rain forests are being destroyed for the new plantations, for example in Brazil and Argentina. EU countries import corn oil from USA and Mexico and soy oil from Brazil and Argentina are largely handled by major trading houses such as ADM, Bunge and Cargill, which have voluntary agreements only to purchase soy oil from areas using cleared tropical rain forests.
Environmental and humanitarian groups do not want biofuel to come at the expense of rain forests. Biofuels are a way to replace classic fossil-based energy sources, but only when they are grown sustainable. They emphasized the need to ensure rain forests are protected during the production of biofuel. But environmental organizations want enough emphasis on sugar cane plantation workers and the protection of the rainforest in farming of biofuels. For instance Brazil is the world's leading producer of ethanol, a biofuel which can be made from sugar cane, corn and other crops. Area deforested by soyabean farmers in Brazil is lingering environmental concerns also with this. Brazil would have to meet environmental standards in farming of biofuel if it hopes to export biofuel. Sugar cane production in Brazil has put pressure on soy production and ranching, pushing them into areas which had previously been rain forest.[15]
Brazil’s First Generation Fuels
Brazil is the second largest producer of ethanol in the world, after the United States. However, it is the only country with the potential to become an exporter due to its abundance of land and the greater productivity of ethanol made from sugar cane, as compared to ethanol produced from maize or beet, as in the US. Brazilian ethanol production is expected to rise from 22.3 billion liters last year to 50 billion liters (13 billion gallons) in 2015.19 Consumption, in its turn, will rise to 32 billion liters per year, which would leave Brazil with a surplus of 18 billion liters for export in 2015. In 2008, Brazil was expected to export around four billion liters of ethanol, up on the 3.5 billion liters it exported in 2007, specifically to the United States, Europe, Japan and the Caribbean.
The rise in Brazilian ethanol production will be the result of investment of around 25 billion reais (9.8 billion euros, $13.9 billion) in the sector over the next few years. But what effect will the EU's proposed reduction of first generation biofuel use have on these projected figures and on Brazil as a whole? Brazil is the world's biggest sugar cane and sugar ethanol producer and their government tends to class sugar cane as a 'non-food crop.* On the other hand, Brazil also has large eucalyptus monocultures, currently linked largely to the charcoal industry and the pulp and paper industry.
If second generation biofuels (i.e. biomass to liquids technologies) became commercially viable then these types of plantations are likely to be expanded substantially. Fast growing trees grown on monoculture plantations in the tropics, including eucalyptus, are likely to be one of the preferred feed stocks for second generation biofuels. However, Brazil's existing biofuel refineries would not be able to switch to second generation biofuels. This would require a completely different type of refinery. Besides, at the moment, there are no signs of 'first generation' biofuels being abandoned if second generation technologies became available.
European Union’s Biofuel Policy
European Union has laid the groundwork for new law that would boost the use of renewable energy sources to 20 percent of total consumption by the year 2020. The deal agreed on Dec. 9, 2008 in Brussels is part of a larger EU climate plan that also aims to cut greenhouse gas emissions by 20 percent and reduce energy consumption by 20 percent over the next decade. It is part of a larger plan to curb emissions, with EU states agreeing last year to reduce emissions by at least one-fifth by 2020 from 1990 levels, to use 20 percent of renewable energy sources in power production and 10 percent of biofuels from crops for transportation, also by 2020. A change in the biofuel plan would demand possibly altering the overall targets. Significantly, negotiators -- including delegates from the 27 EU member states, the EU Commission and the European Parliament -- also reached an agreement on the use of biofuels. The new law should stipulate that 10 percent of the EU's total energy needs is supplied through plant-based biofuels.[16]
India’s Biofuel Policy
The Government of India has set an indicative target of a minimum 20 per cent ethanol-blended petrol and diesel across the country by 2017. This was the highlight of the National Policy on Biofuels, which was cleared by the Cabinet on Thursday. It also set up of an empowered National Biofuel Coordination Committee, headed by the Prime Minister and a Biofuel Steering Committee headed by Cabinet Secretary. The policy has also suggested removing all central taxes on bio-diesel and according declared goods' status to biofuels that would ensure a uniform 4 per cent sales tax on the product across states. As per the policy, a certification mechanism would be put in place for the blending exercise that would have to conform to Bureau of Indian Standards (BIS) specifications.
India has already initiated a bio-fuel strategy, under which 5 per cent ethanol blending in petrol is mandatory across the country and this would go up to 10 per cent from October 2005. Bio-diesel production will be taken up from non-edible oil seeds in waste, degraded and marginal lands. The focus would be on indigenous production of bio-diesel feedstock and import of Free Fatty Acid (FFA) based such as oil, palm etc. would not be permitted, the policy said. The Minimum Support Price (MSP) with the provision of periodic revision for bio-diesel oil seeds would be announced to provide fair price to the growers. Minimum Purchase Price (MPP) for the purchase of bio-ethanol by the Oil Marketing Companies (OMCs) would be based on the actual cost of production and import price of bio-ethanol. India has also a deal on biofuel production and development with the U.S. in September 2008 (The Hindu: September 2008).
In case of bio-diesel, the MPP should be linked to the prevailing retail diesel price, the policy said. [17] The government of India has drafted the country’s first ever biofuel policy, which has been a closed door affair for civil society. One can keep guessing what the final text would read but seeing the current thrust, it is likely to give impetus to an already inflated drive to promote corporate-sponsored biofuels. Since 2003, the government’s intent has been articulated in a National Biodiesel Mission. This has been mirrored in the recommendations of the Planning Commission’s Committee on Development of Biofuels — the proportion of biofuel blends to be mixed with petroleum be increased from five percent to 20 percent by 2012. A Group of Ministers (GoM), headed by the Union Minister of Agriculture, is tasked with a full fledged biofuels policy.
Biofuels are another instance where the need for a solution has been used as a business opportunity by those who created the problem in the first place! It might be opportune to mention two things here — first, that a series of Indo-US energy talks preceded the announcement of any domestic biofuel policy. Second, the demand for more fuel has been created by high levels of consumption caused by the expansion of an energy-intensive world order. Manufacturing and business processes have been exploiting natural resources. The biofuel propaganda by businesses is simply an act against its own destruction. In the context of climate change, large corporations — including petroleum giants, mining companies, automobile manufacturers and food processors — have hopped on to the biofuel bandwagon, even sponsoring debates on the criteria for “sustainable biofuels”.
The noble intention of “green” energy appears to be more reflective of the colour of money than any ecological consideration. So it is not surprising that the main players attempting to influence the domestic policy on biofuels are business and industry. In 2006, biodiesel suppliers and others formed the Biodiesel Association of India, which is the main group lobbying for legal and policy changes, including more land, raw material and tax exemptions. Likewise, the sugar manufacturers are lobbying for favourable policy support. For a country like India where the majority led an off-the-grid life, this means that more land needs to come under cultivation of crops like jatropha, pongamia and sugar sources, which can be tapped for oil and ethanol production respectively.
Agricultural land, forests and even grazing land, which support people’s livelihoods, are being used to promote fuel plantations. Land, a source of food, is now being seen as a source for oil extraction. The rising demand for fuel in an increasingly mechanised world simply cannot be fulfilled even if more land is brought under biofuel plantations.20 Forest and “waste” land began to be diverted for ratanjyot or karanj plantations. In traditional wisdom and in the ecological worldview, there is nothing “waste”. In states like Rajasthan, huge tracts of the neeji beer (private grazing lands) projected as “waste” lands are being systematically promoted for jatropha plantations, through the state government’s “green patta” policy.
For a pastoralist society, this would mean using pastures for “fuel” cultivation, and the survival of livestock then becomes a serious question. In Orissa, some villagers have been duped of their land, including revenue-generating, fully grown mahua trees, in the garb of leasing out their land for an environment-friendly option21. Ironically, jatropha plantations are being pushed. In the Kalahandi- Bolangir-Koraput region, which is known for its food shortage? Special Economic Zones, industries, mines and dams are obviously industrial undertakings. It is a different thing that their impact is forgotten and condoned for the sake of the “growth” of a nation. But biofuels wear a green mask while touting solutions to climate change.
This veil is gradually lifting now, with the promotion of biofuels being seen as adding to the food crisis. Peasant communities, indigenous people and regular consumers have been crying hoarse about the direct ill-effects, from land grab to food price hikes, which they are facing due to the expansion of the biofuel industry. More recently, there have also been murmurs of concern from within the officialdom; with the Finance Minister of India raising concerns about these ill-effects. The promotion of biofuels today is yet another corporate agenda with clear intentions of private profit. People have to stop regarding forest, fallow, pasture and agricultural land as “waste” or convertibles, and the people who are dependent on these lands as dispensable. Till then, the business of changing the climate will go on in full swing.
In India, biofuel policy and price both are in problem with following the biofuel policy of the Union Cabinet to continue with the mandatory 5 per cent ethanol blending with petrol, oil marketing companies (OMCs) have agreed to increase the price of ethanol from Rs 21.50 to Rs 26 a litre for a year. However, the sugar industry is seeking Rs 28 a litre and, according to industry sources, only 40 per cent of the required quantity (680 million litres, for five per cent blending with petrol) would be available if the OMCs persist with the Rs 26 rate. The current price of rectified spirit, a raw material for ethanol, is in the range of Rs 28-30 a litre and, therefore, the sugar industry is seeking a price of Rs 28. The five per cent blending rule was introduced in November 2007. Ethanol is considered a ‘green’ fuel and blending will also help reduce India’s dependence on crude oil imports (Business Standard: 22 November 2009).
But biofuels have a limited role in India due to land limitation and food security issues, a view which differs from the government biofuel policy pushing for a 20 per cent blend of such fuel in gasoline and diesel by 2017. In October 2007, under pressure from the world to cut emissions of the greenhouse gasses produced by fossil fuel combustion, the government had mandated that all diesels should contain 5 per cent biofuel by volume.[18]
Canada’s Biofuels Bill- and –Policy
The Canadian Parliament house voted in favour of the Government of Canada's Biofuels Bill on 26 June 2008. The amendments to the Canadian Environmental Protection Act (Bill C-33) will give the Government authority to develop regulations for renewable fuels mandating a 5 per cent renewable content in gasoline by 2010 and 2 per cent renewable content in diesel fuel and heating oil by 2012. Canada's renewable fuels strategy will reduce greenhouse gas emissions by approximately 4 megatonnes per year. This is the equivalent of taking about one million cars off the road, or a solid line of cars stretching from Montreal to Vancouver.22 Through CEPA Bill C-33 the Government is not just advancing in the biofuels sector – it is securing a cleaner future for generations of Canadians. A prosperous and vibrant bio-based economy will help build a strong foundation for Canadian farmers all while protecting the environment.
Since announcing its renewable fuels requirements in 2006, the Government of Canada has committed $2.2 billion over 9 years to support a strong domestic renewable fuels sector in Canada. Bill C-33 gives the government the authority to regulate the blending of conventional and renewable fuels. It allows the government to track exports in order to make accurate calculations of the volume of renewable fuels as a percentage of the total fuel used in Canada. It also provides the authority the government needs to lift the administrative burden renewable fuel regulations would place on small producers and importers. These elements provide a framework to regulate the renewable content of fuel in an efficient manner enabling this Government to achieve real emissions reductions.[19]
Canada produces about 600 million litres of ethanol annually; this amount will increase to 840 million litres in 2007. Given the current incentives the Canadian government projects that ethanol production will increase to about 2.74 billion litres by the end of 2010. In Canada, ethanol is made from wheat in the western provinces, and from corn in Ontario and Quebec. Because it tends to absorb water molecules, ethanol is difficult to transport, especially by pipeline. In addition, it is relatively corrosive and evaporates easily. For these reasons, some companies, such as British Petroleum (BP) and DuPont, are looking into converting their ethanol plants to biobutanol production.23
Much like the US, the Canadian government invests billions of dollars each year to subsidize the production of biofuels, such as ethanol. According to the Globe and Mail reports that the current financing legislation working its way through the House of Commons is showing that many of the opposition parties are not clearly unified on biofuel policy. Liberal leader, Stephane Dion, has argued for the expansion of ethanol targets in recent months.[20] The left-leaning NDP leader has also been a supporter of biofuels. However, as recent global food price hikes are being linked to increases in biofuel production, many rank-and-file opposition party members appear to be questioning the wisdom of government subsidies to a heavily profitable industry that is exacerbating food insecurity.
While the financing legislation is expected to pass, MPs from the Bloc Québécois, the NDP and Liberals may break from party leaders.[21] As a contrast to US biofuel policy, the Canadian experience is interesting. Much of the Canadian debate is centered on global poverty and the international impact of biofuels expansion. In the US, the debate has been muted.[22]
Renewable Fuels Strategy
The government's comprehensive strategy for renewable fuels has four components: 1. Increasing the retail availability of renewable fuels through regulation, 2. Supporting the expansion of Canadian production of renewable fuels, 3. Assisting farmers to seize new opportunities in this sector, 4. Accelerating the commercialization of new technologies.[23]
Regulations under development by Environment Canada will require 5% renewable content based on the gasoline pool by 2010 and 2% renewable content in diesel and heating oil by 2012, upon successful demonstration of renewable diesel fuel use under the range of Canadian conditions. The announcement was made in December 2006 and Environment Canada issued a Notice of Intent in the Canada Gazette later that month. These new regulations will require enough renewable fuel to reduce greenhouse gas (GHG) emissions by about 4 megatonnes per year, the GHG equivalent of taking almost one million vehicles from the road.[24]
The initiative will provide operating incentives to producers of renewable alternatives to gasoline and diesel based on production levels and other factors. It will make investment in production facilities more attractive by partially offsetting the risk associated with fluctuating feedstock and fuel prices. Budget 2007 also stated that concurrent with the implementation of the operating incentive program to promote additional domestic production of renewable fuels, the current fuel excise tax exemptions for ethanol and biodiesel will be eliminated as of April 1, 2008.[25]
This was a new $200 million initiative that will provide repayable contributions of up to $25 million per project to help farmers overcome the challenges of raising the capital necessary for the construction or expansion of biofuel production facilities. In March 2007, the Minister of Agriculture and Agri-Foods announced a $10 million expansion to the Biofuels Opportunities for Producers Initiative, which helps agricultural producers develop sound business proposals, as well as undertake feasibility or other studies to expand biofuels production capacity.
Canada Accelerating the Commercialization of New Technologies
Budget 2007 also makes $500 million, available over eight years to Sustainable Development Technology Canada (SDTC) to invest with the private sector in establishing large-scale facilities for the production of next-generation renewable fuels. Next-generation renewable fuels, produced from non-food feedstocks such as wheat straw, corn stover, wood residue and switchgrass, have the potential to generate even greater environmental benefits than traditional renewable fuels. This measure complements research and development initiatives including the following: 1. ecoENERGY technology initiative, 2. forestry innovation , 3. Sustainable Development Technology Canada (SDTC) (existing funds). Stephen Harper positioned Canada as a new "emerging energy superpower" in his first speech abroad as Prime Minister .Mr. Harper boldly sold Canada as a secure, stable and reliable source of energy to an audience of about 300 business people -- members of the Canada-UK Chamber of Commerce.[26]
Why Canada Encourage Biofuel Production?
The principal reasons for promoting a biofuels industry through government policies are: (1) the production and consumption of biofuels leads to lower greenhouse gas emissions; (2) a biofuels industry increases farm income through introduction of a new market for farm commodities; (3) establishment of biofuel plants in rural communities promotes rural development and economic diversification; and (4) production of biofuels assists with energy security by making the domestic economy less reliant on imported fossil fuels.
The following objectives of Canada’s biofuel Policy:
1. Measures to Promote the Biofuel Industry
Like most industrialized countries, Canada has launched programs to encourage biofuel production. In the mid-1990s, the federal government waived its excise taxes of $0.10 per litre for ethanol blended with gasoline, and $0.04 per litre for biodiesel24. It has also established a program to protect producers from any negative impact in the event of changes to this policy. In 2003, the Canadian government launched the Ethanol Expansion Program, which supported investments in building and enlarging ethanol plants. On 20 December 2006, the government released a strategy with the goal, announced earlier in the year, of increasing biofuel consumption to 5% of total fuel consumption in Canada by 2010. The strategy comprises the following elements:
The draft of regulations will require a renewable content of 5% in gasoline by 2010, a 2% renewable content in diesel fuel and heating oil by 2012. The establishment of the Capital Formation Assistance Program for Renewable Fuels Production, a $200-million, four-year program designed to encourage agricultural producers’ participation in the renewable fuels industry. It will build on the $10 million budgeted for 2006-2007 for the Biofuels Opportunities for Producers Initiative, which is aimed at assisting agricultural producers with preparing business plans and conducting feasibility studies into developing and increasing production capacity for renewable fuels. The establishment of the Agricultural Bioproducts Innovation Program, a $145-million, five-year program designed to promote research, development, technology transfer and the commercialization of agricultural bioproducts, includes biofuels, in Canada.
2. An Energy Policy
One of the main arguments put forward to encourage biofuel production is that biofuels will be a reliable source of energy and will decrease dependence on fossil fuels. However, a preliminary assessment of the extent to which the potential ethanol or biodiesel supply meets those fuel needs is disappointing. Global production is still too small and the need for raw materials is still too high for biofuels to have a significant impact on the fuel market and be able to compete with fossil fuels. The energy yield from ethanol or biodiesel depends on the feedstock used. For instance, one hectare (ha) of sugarcane grown in Brazil produces almost twice as much ethanol as the same area of corn grown in Canada. It would take slightly less than 2 ha of wheat or 0.6 ha of corn grown in Canada to run a car entirely on biofuel for one year25, while 0.3 ha of sugarcane grown in Brazil would provide enough biofuel for the same level of consumption.
By using 16% of its total corn production in 2006, the United States replaced 3% of its annual fuel consumption with biofuels. According to Agriculture and Agri-Food Canada (AAFC), if 100% of the total U.S. corn production were used, that figure would rise to 20%. According to an article in the New Scientist26, Canada would have to use 36% of its farmland to produce enough biofuels to replace 10% of the fuel currently used for transportation. Brazil, by contrast, would need to use only 3% of its agricultural land to attain the same result. In order for Canada to reach its biofuel target of 5% of fuel consumption by the year 2010 (about 2.74 billion litres of ethanol and 0.36 billion litres of biodiesel), the AAFC estimates that 4.6 million tonnes of corn, 2.3 million tonnes of wheat and 0.56 million tonnes of canola will be required. If all these feedstocks were grown domestically, they would represent 48-52% of the total corn seeded area, 11-12% of the wheat seeded area and about 8% of the total canola seeded area in Canada.27
3. A Greenhouse Gas Emission Reduction Policy
Although biofuels, and ethanol in particular, have been used for more than a century, the environmental benefits of their use have only recently attracted attention. For instance, ethanol is used as an additive to replace other gasoline additives, including methyl tertiary butyl ether (MTBE), which is considered more damaging to health and the environment. Recently, it has been suggested that increased use of ethanol-blend fuel and biodiesel would reduce greenhouse gas (GHG) emissions from the transportation sector. All analyses of GHG emissions on a life-cycle basis appear to show that biofuels produce fewer emissions than fossil fuels.28
For instance, Natural Resources Canada estimates that depending on the raw material (oil, fat, etc.) used to make it, pure biodiesel produces 64-92% fewer GHG emissions compared with petroleum diesel. It should be noted, however, that GHG emissions over the full ethanol life-cycle can vary dramatically depending on the energy sources used to produce the ethanol. For example, in Canada, the manufacturing plants that produce ethanol from corn and wheat are fuelled by natural gas and produce fewer GHG emissions than many American ethanol plants that burn coal or other fossil fuels. There can thus be significant variations in the overall environmental benefit of using ethanol compared with gasoline. At present, replacing 5% of conventional fuels with biofuels would have a relatively minor impact on reducing GHG emissions across Canada.
In fact, if 10% of the fuel used were corn-based ethanol (in other words, if the E-10 blend were used in all vehicles), Canada’s GHG emissions would drop by approximately 1%. Biomass is one of the few forms of energy that can be used in a carbon negative manner. When biomass is combusted to produce heat, it releases less carbon than was absorbed by the plant material during the plant's lifecycle. This is because (1) approximately one third of the carbon absorbed by the plant during its life is sequestered in its roots, which are left in the soil to rot and fertilize nearby plant life, and (2) combustion of biomass produces 1-10% solid ash (depending on type of plant used), which is extremely high in carbon (this ash is commonly used as fertilizer.)
4. An Agricultural Policy
The federal government’s announcement of a strategy to encourage biofuel production generated a great deal of interest in the agricultural sector. Increased demand for and production of biofuels, specifically ethanol, in North America will inevitably affect the agricultural market. However, there are very few studies of the expected impact, and almost all of them deal exclusively with the U.S. marketplace. Ethanol is the dominant biofuel in the United States, as in Canada. It is estimated that about 16% of the U.S. corn crop is used for ethanol production, the third-largest use of American corn, behind animal feed and export purposes. In light of the significant increase in demand for ethanol, there is expected to be a sharp increase in demand for corn. A number of observers are wondering what effect the increase in demand will have on the food market, and especially food prices. In Canada, the livestock industry has expressed concern that the expansion of the biofuels market will affect the price and availability of grains used for animal feed.
Biofuel Development: Related Issues
Biofuels have become a growth industry with worldwide production more than doubling in the last five years. The rapid expansion of ethanol production in the United States and biodiesel production (and to a lesser extent, biogas) in Germany and other countries in Western Europe has created a biofuels frenzy that has affected many countries, including Canada. Many measures have been used to stimulate production and consumption of biofuels, including preferential taxation, subsidies, import tariffs and consumption mandates. Recently, Canadian federal and provincial governments have announced consumption mandates and subsidies to assist rapid expansion of biofuel production in Canada.
All of these worthy objectives are satisfied to some extent by biofuel production and consumption though the degree to which they are fulfilled is modest at best (and may, in fact, lead to lower overall social welfare when the public costs to establish the industry are counted). Greenhouse gases are reduced 20-40% with cereal-based ethanol production, 70-90% if cellulosic feedstocks are used to produce ethanol and 40-60% if canola or soybeans are used to produce biodiesel. However, the costs to reduce greenhouse gases by the production and use of biofuels (especially cereal-based ethanol) are very high; much greater greenhouse gas reductions can be achieved by other methods at lower costs. There is little doubt that the ethanol frenzy in the United States has raised the prices of grains and oilseeds worldwide.
There is some evidence that a biofuels industry creates new jobs and spurs economic growth in rural parts of Canada and the United States. However, modern biofuel plants, most of which are quite large to exploit economies of scale, provide only a limited number of jobs — usually less than 35 in ethanol plants that produce up to 190 million litres per year. Against this modest gain in jobs and economic activities must be set the losses that may occur in other sectors as a result of the biofuels industry. For example, the beef and pork industries may be reduced in size due to the higher costs of feed inputs and this may lead to slowdowns or reductions in meat processing plants and livestock transport. As a large net exporter of several types of energy, Canada has no immediate energy security problem. In the United States, energy security is the objective.
However, the rapid expansion of the biofuels industry in the United States is making only a small dent in their overall dependence on foreign sources of supply of petroleum29. The United States and western European countries will depend on imported oil for a long time to come. The increase in biofuel production has coincided with an increased awareness of issues related to the ownership and structure of plants, the development of new technologies, and even some moral dilemmas. The following ten issues were identified that warrant further scrutiny and public debate in terms of the goal of establishing a viable biofuels industry in Canada.
The major issues related to biofuel development are following:
1. Biofuel Production Ownership
The idea that farmers should be the principal owners of biofuel facilities has been promoted widely across the world. Both in developed and developing world farmers and rural communities must be participate in new locally owned and controlled businesses that stimulate the local economy. In contrast, the trend in the North America is just the opposite. Larger players have entered the industry and have changed its value-added agriculture origins as more private equity funds, venture capitalists, money-center banks, and international corporations have been drawn into the industry. The large capitalization and technical labour requirements of modern and efficient biofuel plants make it very difficult for farmer cooperatives to compete30.
It is very likely that the proportion of farmland required will decrease with improved yields and the cultivation of marginal soils, if the demand for biofuels raises the price of feedstocks. However, the need for feedstocks will remain high if the demand for biofuels increases. Therefore, there is concern about the rationale for allocating farmland to energy production rather than food production. Some observers believe that there is already competition between the two markets: according to the United Nations Food and Agriculture Organization (FAO), the rising demand for ethanol derived from corn was the main reason for the decline in world grain stocks during the first half of 2006.
2. Exploiting Biofuel Economies of Scale and Scope
One of the most general results found in industry cost studies is that of the existence of economies of scale in production. As plants increase in size, they often become more efficient in production and can apply their fixed costs over a larger output. This phenomenon exists in biofuels production as well with larger plants having significantly lower unit costs of production. Despite the recognized cost advantages from larger scale production of ethanol, smaller plants are being promoted in some parts of Canada. Three small ethanol plants operating in Western Canada (at Minnedosa, Manitoba; Lanigan, Saskatchewan; and Red Deer, Alberta) have successfully exploited economics of scope by integrating their ethanol plants with a feedlot or bakeries that supply final goods for human consumption.
While some rural development benefits can be derived from small integrated firms, establishment of biofuel plants that have much higher unit costs of production means that their downside risks are greater and they are likely to face financial problems in the future. Promotion of small plant sizes also may discourage private sector investment in the industry as investors seek jurisdictions that promote enterprises that could become internationally competitive.
3. Biofuel and Market
Production costs of biofuels are much lower in developing countries that lie in tropical and sub-tropical areas and have low land and labour costs than they are in richer countries that have high land and labour costs. Crops such as sugarcane, tapioca, sorghum, and cassava have been used as feedstocks for ethanol production. Palm oil, soybeans, peanuts, cocoanut, and jatropha have been used to produce biodiesel. The cost advantage of producing biofuels in lower income countries provides an obvious opportunity for increased international trade in biofuels.
However, like many other agricultural-related commodities, restrictions to trade in biofuels exist in most high income countries. The United States, European Union, Canada and most other high income countries have imposed tariffs or constructed non-tariff barriers against imports of biofuels. The social welfare effects of producing and consuming biofuels would be enhanced if ways can be found through multilateral negotiations to reduce or eliminate tariffs and non-tariff barriers to trade in biofuels.
4. Biofuel and Feedstock
Interest in using cellulosic materials to produce ethanol has been growing as the limitations of making ethanol from corn and sugar become more apparent. Cellulosic feedstocks have the potential to be much more energy efficient and radically reduce emissions of greenhouse gases. The problem in producing ethanol from cellulosic biomass is that it is much more difficult and expensive. It is unclear at this time if commercial cellulosic ethanol production will be become a reality in Canada in the near future. A lot of crop residues are available for use each year. However, the relatively short growing season across Canada makes it difficult to achieve high yields. The logistics and costs of harvesting, collection, storage and distribution of the huge quantity of bulky materials required to supply the feedstock requirements for a commercial ethanol plant throughout the year are the biggest obstacles.
5. Biofuels and Livestock
An inevitable and undesirable result of the biofuels frenzy is higher costs for other users of feed grains, such as producers of beef, dairy, hogs and poultry. The growing demand for corn from the ethanol industry is attracting more resources for corn production, away from wheat and soybeans, tightening the supply of these crops and raising their prices. The prices of all major feed grain prices have raised dramatically in the last year: corn 86%, soybeans 32%, oats 39%, barley 54%, and feed wheat 59%. Meats, hogs and poultry producers have been the hardest hit. Feed represents more than 80% of the costs of production in a western Canadian Meat feedlot and as much as 65 to 75% of the costs of hog and poultry production. Distiller’s Dried Grains, a major by-product of ethanol production, can be used as a low price protein source in animal diets. However, handling problems and nutritional issues diminish its value as a feed source for livestock.
Downplayed the effect biofuels have had on global food prices.31 The consequences of the growing demand for meat and milk are that more land is used for fodder, and this development is just made worse by the biofuels. According to the Food and Agriculture Organization, 37 countries currently face food crises. The World Bank, an institution tasked with fighting poverty, is to continue food shortage discussions at a meeting in Washington last year. World Bank President Robert Zoellick has urged countries to immediately provide the minimum $500 million sought to allay the shortage.[27]
Do what want to produce crops to feed people or to produce fuel that powers to vehicles? The rapid expansion of ethanol production, particularly in the United States, has led to dramatically higher prices for grains and oilseeds. The total harvest of grains in the world in 2006 was estimated as being four percent less than consumption. This is the sixth time in the last seven years that world grain production has been lower than consumption. World carryover stocks of grain have fallen to only 57 days of consumption, the lowest level since the early 1970s. This severe drawdown of stocks has been the most important reason for the recent spike in grain and oilseed prices. The much higher prices for food will affect everyone but especially those on lower incomes. Nobody in the world will be spared the impacts from the higher prices of foodstuffs.
7. Environmental Gains versus Losses
There's no danger that too much food production is shifting to biofuels. However, environmentalists want to get rid of EU subsidies for biofuels, which currently amount to 90 million euros each year. The EU countries need to discuss strict criteria for producing biofuels.[28] The environmentalists concerns are that the EU had initially underestimated the danger to rainforests and the risk of forcing up food prices from its policy of setting binding targets for the use of biofuels. Is has seen that the environmental problems caused by biofuels and also the social problems are bigger than we thought they were.32 Food production must be the priority. European leaders must have to stressed in "second generation" biofuels production including leaves, straw and pond algae. Biofuels currently under production – biodiesel and ethanol –are made from wheat, corn and sugar beets. It is something skeptical about using second generation biofuels and that will take 10 to 20 years.[29]
One of the main justifications for developing a biofuels industry is the environmental benefits that result from the displacement of petroleum products but there also are many negative environmental consequences from production of biofuels. The ethanol frenzy in the United States has provided an incentive for some marginal quality cropland to be removed from the Conservation Reserve Program to provide more land on which to plant corn. Farmers are expected to use more fertilizers and chemicals in their attempts to increase yields in response to the much higher prices for cereals and oilseeds. This could lead to additional leaching of nutrients into ground water and run-off into drainage systems.
Increased intensity of crop production could lead to more monoculture and increased soil erosion, not to mention the greater need for fossil fuels to power the more intense farming practices. The economic pressure to import biofuels, especially biodiesel from tropical countries, threatens the rain forests. Biodiesel plants have greatly increased demand for palm oil; logging and burning of some of the most biologically diverse forests in the world to plant more palm trees is well under way. Also, production of one litre of ethanol requires between 4 and 8 litres of water. Most of this water must come from underground sources and this could reduce water tables in the aquifer.
Biofuel: a Global Scenario
The latest great hope to save agriculture in North America is biofuels. Results of present economic crisis agricultural jobs increased in the USA. Many Japanese, for their part, have shown a growing interest in rural farming as disillusionment rises over the grind of urban jobs and layoffs.[30] The "bio" part is supposed to benefit farmers who grow crops such as corn, wheat, soybeans and canola--all of which can be used in biofuel production. Boosters say the rising demand for biofuels will increase the demand and, therefore, the crop prices may be raised. But there are plenty of questions, and even more repercussions for the livestock industry--particularly in western Canada. Fuel such as methane produced from renewable resources, especially plant biomas and treated municipal and industrial wastes.
The approach to biofuels has been very different in the U.S., Europe and Canada. European policy is animated by two issues: reducing greenhouse gas emissions and ensuring supply security, and they decided a couple of years ago to focus on biodiesel, perhaps the easiest, most cost-effective biofuel to produce. One of the best ingredients to make biodiesel is canola oil. That fits in well with the European strategy, since canola (the Europeans still stubbornly call it rapeseed is extensively grown in central and northern Europe. Road transportation accounts for 27% of GHG emissions in Canada (i.e., fuel production and use). If all the fuel sold in Canada were E-10, this figure would be 3-4% lower. European Union delegates have laid the groundwork for new law that would boost the use of renewable energy sources to 20 percent of total consumption by the year 2020.
The deal agreed Dec. 9, 2008 in Brussels is part of a larger EU climate plan that also aims to cut greenhouse gas emissions by 20 percent and reduce energy consumption by 20 percent over the next decade. EU leaders will fine tune the total package on Thursday and Friday at a bloc-wide summit. Significantly, negotiators -- including delegates from the 27 EU member states, the EU Commission and the European Parliament -- also reached an agreement on the use of biofuels. The new law should stipulate that 10 percent of the EU's total energy needs is supplied through plant-based biofuels. The issue of biofuel quotas has been a bone of contention with some environmental and humanitarian groups, which say over-zealous biofuel production could cause massive deforestation and lead to food shortages.33
But the market for biodiesel has grown so quickly in Europe that they're now importing large quantities of canola oil from Canada to supplement their own supply. In the twisted irony of green policy madness, Europeans aren't allowed to import the actual seeds to crush into oil, because of fears that it could be genetically modified. Heaven forbid diesel engines become contaminated by genetically modified canola. The Americans have a different agenda. Their biofuel policy is driven by Washington's desire to reduce American reliance on foreign energy sources, particularly the Middle East. They see that hope in ethanol, which can supplement or replace gasoline.
In the U.S., corn is the crop of choice to produce ethanol. But the trouble with corn is that it takes almost as much energy to convert it into ethanol as the energy value the product delivers. To make it more attractive for investors, the U.S. government has put into place a vast subsidization process that no entrepreneur could refuse. Not surprisingly, the result has been a boom in the construction of ethanol plants in the U.S. And where does Canada stand in this anticipated boom in biofuel production? Squarely in the middle of a field of ineptitude and indecision, here, the issue is paralyzed by a lack of policy and confusion as to which government department is supposed to lead the biofuel charge. Is it the ministry of agriculture, environment, finance or natural resources? All must have a hand in some aspect of how biofuels will be treated by the federal government.
Naturally, any resultant policy will have to be a made-in-Canada solution, and the experiences of the U.S. and Europe are to be ignored. That's been the prevailing attitude on other agricultural issues. In the case of BSE testing, it has cost Canadians billions of dollars. The use of the industrial biodigester to resolve the animal waste issues is another example. In both cases, the Europeans are miles ahead of Canada, and yet Canada insists on reinventing the wheel. Canadian Government’s dithering, particularly on ethanol plants, is going to have a serious side-effect on the livestock industry. One of the byproducts of ethanol production is corn or grain wastage. That product retains nutrient value for cattle feeding, particularly in feedlots.
With so many U.S. plants coming on stream over the next few years, which feed product will end up virtually given away to American feedlots located near the new plants, giving those cattle feeders a considerable competitive advantage over operators in western Canada. Cheap feed and economies of scale drive the feedlot industry, and the American ethanol boom is bound to tip the scale to the detriment of the feedlot industry in Canada. There is a curious pattern with all these issues--be it biofuels, BSE testing or even agricultural trade policy at the WTO. In every case, Canada's position is out of step with the Europeans' and the Americans'. Ottawa remains resolved to do everything its own way, reality and common sense be damned.
A Debate on Biofuel
Biofuels may be one of the dumber of the grand, well-intentioned ideas of this decade. Yet they are here to stay, not just because of the farm communities in Brazil, Europe, and the US, but also because of the Zeitgeist that says source-diversification is the Holy Grail of energy policy. Soaring prices for widely traded (and subsidized) commodities like rice, corn, soy, - the bedrock of the global food supply, have created a short-term, it is a hope, hunger crisis. For the poorest of the poor, food is becoming too expensive. For the most insular and corrupt governments, food aid is a vital instrument of political control or, in sunnier dictatorships, a powerful tool in public relations. High prices usually mean goods are scarce and demand is high, and there seems to be broad consensus that one factor is demand in the rising economies of Asia (China, India), as well as parts of Latin America, and even Russia.
Using waste biomass to produce energy can reduce the use of fossil fuels, reduce greenhouse gas emissions and reduce pollution and waste management problems. A recent publication by the European Union highlighted the potential for waste-derived bioenergy to contribute to the reduction of global warming. The report concluded that the equivalent of 19 million tons of oil is available from biomass by 2020, 46% from bio-wastes: municipal solid waste (MSW), agricultural residues, farm waste and other biodegradable waste streams.
There is little agreement on how to alleviate this situation, except the option to mobilize the developed world to step up emergency food aid supplies: President Bush has asked the US Congress for $770 million in urgent food assistance, and the World Bank is coordinating with the UN to, among other things, beef up donations to the World Food Program. It is difficult to predict or second-guess market variations. Therefore long-term policies to ensure a robust, affordable global supply of basic foodstuffs provides for intense disagreement. Still, the food/energy interface clearly is a major factor in commodities markets. The legislation and subsidy-driven growth of so-called biofuels as an alternative or additive to fossil fuels has driven more cropland to be used for the production of crops for energy generation, rather than food. In the short run, surging energy costs also add to the cost of agricultural production and distribution.34
The chorus of ethanol-dissenters grows louder with every cent more that Europeans pay for their milk, and with every new third world hunger story. The international development community, only occasionally accused of giving ideological cover to "big business" or to the stigmatized "free market" has contributed to the growing realization that biofuels may be one of the dumber of the grand, well-intentioned ideas of this decade.
This rhetorical concern has reached the political community too, yet that did not stop Congress from larding up its new farm bill with new ethanol subsidies, coupled with a token hit at the old ethanol tax credit. Biofuels deserve to take some hits. They are grossly over-subsidized given their potential, and even climate change activists are coming around to the view they don't help much on greenhouse gas emissions and may even do harm. Ethanol, for example, has to be trucked around the US, as it is too corrosive to flow through pipelines. Rainforest clearance and excessive monoculture rear their ugly heads35.
In truth: the world can live with that, and still feed the hungry everywhere. Markets adjust and agricultural production for food, too, will adjust to meet global food demand. It will do so much faster though, and prevent much hunger and malnutrition, if governments stop manipulating agricultural production (including biofuels) with subsidies, tax breaks, tariffs, and regulatory demands. On that score, no one clamoring about the food crisis has clean hands. The World Bank has subsidized biofuel production through its International Finance Corporation for years, the US protects biofuels from import competition and subsidizes domestic production, and Europe and Brazil are heavy into agricultural-subsidies for energy production. Combined with the inspired subsidies doled out to EU farmers not to produce foods and the requirements for keeping land fallow, this brings price spikes that a truly free market could flatten much quicker.
Western Agricultural policy is, sadly, a behemoth fighting with outdated means problems from years past. Once only a - very costly - regulating tool, its inflexibility now causes market distortions and supply shortages that do measurable, definitive harm. In light of this, Mr. Zoellick and his colleagues would do well to call for mutual disarmament in the biofuels-subsidy wars. Failing that, unilateral disarmament would be nice. At a time when free trade in agriculture is, perversely, on the defensive, the Doha Round ruined by unwillingness to phase down farm subsidies, a renewed commitment to freeing up world markets for foods, would be a great breakthrough.
Alas, the only signals at the moment come from France and Germany, both of which want Africa to duplicate the EU's Common Agricultural Policy, - the most protectionist policy in the world. Indeed, this should help African food prices climb to new highs, and require Africans to subsidize their farmers to overproduce and dump the excess. Once a recipe to help inefficient European farmers produce non-competitively priced food, it is not exactly a cure for starvation. For agriculture, as for most critical human endeavors, well functioning free markets are the answer. But who today will speak that truth on behalf of the world's poor?[31]
To take those concerns into account, EU policymakers and parliamentarians agreed to a set of rules aimed at making sure that only environmentally-friendly biofuels are counted towards the overall target.[32] Biofuels Linked to Soaring Food Prices. High food prices have led to riots in the developing world. Debate continues to rage over food shortages, rising costs and the link to biofuel production.36 Skyrocketing prices of commodities like rice, wheat, corn and milk have led to riots in developing countries around the world this month, including Indonesia, Egypt, the Philippines and Haiti. Some experts and government leaders are blaming the price fluctuation on increased biofuel production, which requires a fair amount of agricultural land.
High energy prices and inflation are also seen as culprits.37 EU leaders agreed last year to obtain a tenth of all transport fuel from biofuels by the year 2020 as part of a comprehensive package aimed at fighting climate change. Biofuels are made from crops like corn, wheat, sugar and palm oil, which are refined into ethanol or oil. They are used as an environmental friendly alternative to gasoline and diesel as they release lower quantities of CO2 when burned. Both Europe and the US subsidize biofuel production.
Biofuel: A Culprit in Food Crisis
Current Biofuels Threaten Food Security.38 The use of first-generation biofuels will increase food insecurity in the world’s poorest countries and is unlikely to deliver any significant greenhouse gas mitigation benefit for at least 30 years.39 There are clear evidences that current biofuels may have serious unintended consequences, particularly for developing nations, and could work against the Millennium Development Goal of reducing world hunger40. biofuels are being promoted as a potential solution to reducing greenhouse gas emissions, enhancing energy security and fostering rural development. However, the current biofuels development is being pursued without a thorough assessment of the potential consequences on issues such as food security and deforestation, or the stated potential to mitigate greenhouse gas emissions.41
The study reviews the global status of biofuels development, policy regimes and support measures and quantifies the agro-ecological potential of first-and second-generation biofuels crops. It presents a comprehensive evaluation of the social, environmental and economic implications of biofuels development on transport fuel security, greenhouse gas emissions, agricultural prices, food security, land use change and sustainable agricultural development. If the current biofuels targets imposed by developed and developing countries are achieved, net greenhouse gas savings in the period to 2050 may amount to 15 to 27 Giga tons carbon dioxide equivalent (Gt CO2e) in comparison to 6 Gt CO2e annual emissions from transport fuels. Equally concerning is that current biofuels targets will result in an additional 140 million people being put at risk of hunger by 2020.
Also climate change itself if unabated will result in food production losses, further increasing the vulnerability of the poor. However, environmentalists do not support the notion that the development of biofuels will result in increased rural development. On the contrary, it indicates only a modest increase in income for farmers in developing countries, and when this is balanced against the increasing cost of food, it is not the anticipated win-win situation. On food prices increased demand for first-generation biofuels, which are largely based on cereal, sugarcane and vegetable oil crops, is driving the price of food up, due to the competing demand for food, feed and fuel. It is estimated, for example, that achieving a 6 percent use of biofuels in the transport sector would lead to a 34 per cent increase in world cereal prices. Such an increase will cause a serious deterioration in food security in developing countries.
Achieving the 2020 biofuels targets using first-generation biofuels will require an additional 150-240 million tons per annum of cereal crops, which in turn would require an additional 30 million hectares of land for production. The results also highlight deforestation of some 15 million hectares by 2020, with the inherent risks of biodiversity loss. Deforestation on this scale also releases substantial carbon and removes a critical carbon sink42. The study emphasises that there is substantial potential for the commercial production of second-generation biofuels feedstocks in tropical grasslands and woodlands. This offers opportunities to develop innovative and mutually beneficial private sector and local community partnerships that would combine biofuels production for the market with food production by and for the local community.
Such partnerships would need to be well designed, monitored and legally binding to minimize social and economic risks of exploitation. Food security and energy security are co-dependent, and if biofuels are to be seen as part of the fuel security, or climate change mitigation, an early transition to second-generation biofuels technologies and a shift away from the use of food staples is needed urgently to avert a growth in world hunger and unsustainable agricultural practices. It is noted that Brazil has successfully implemented a biofuels strategy based on ethanol from sugarcane grown under rainfed conditions in former pastoral and grasslands areas.
This program was privatized in the late 1990s, after being strategically developed with public funding from the early 1970s. For more than thirty years, there have been countless debates on the concerns of feeding cereals to livestock in a world where over one-sixth of the population lives with chronic hunger and debilitating poverty. There is a risk that we might spend the next thirty years debating the merits of feeding cereals to cars.[33]
In recent years food prices have increased sharply. Biofuels are seen as one of several culprits. Land that used to be planted with food crops has been converted to biofuel production, which has increased prices.43 The production of biofuels is "a crime against humanity" because of its impact on global food prices44. The European Energy Agency argued that the EU will have to import biofuel from abroad, which will accelerate destruction of the rainforests. The agency also questioned biofuel's environmental benefits.45 Poverty, instability, etc. related to land, water… etc and later is increasingly being devoted to biofuel production. The concern has become acute now that rising food costs, particularly for staples such as rice and wheat, have sparked violent protests in a dozen countries in last year. The issue gained even more prominence during the International Monetary Fund and World Bank spring meetings.46
Biofuel Farming and Environment
It is a time of called for a drastic rise in European agricultural production, in a reverse of the bloc's previous agricultural policy, to counter rising world food prices and shortages. We need a farming renaissance, and an increase in agricultural production in Germany, in the whole of the European Union and, more especially, in the developing countries.[34] The EU had induced farmers to stop using 3.8 million hectares of arable land in recent years to counter surpluses in dairy, produce, wine and meat. This land should be brought into production once more. [35]
The United Nations World Food Program (WFP) has estimated that food prices have risen some 55 percent since June 2007 due to rising populations, strong demand from developing countries, the use of certain crops in producing biofuels, and the increasing frequency of floods and droughts amid concern over climate change. We have to produce more foodstuffs worldwide in order to prevent further price jumps. With an annual population growth of 80 million people, WFP expected food demand to rise 60 percent by 2030, according to the minister. We have to recognize once again that agriculture is a question of national interest in every country and not a peripheral issue.[36]
Agriculture is a matter of national interest. What will happen to subventions? Food prices have spiraled globally but also within the European Union, which subsidizes its agricultural production. German news weekly Der Spiegel wrote that the German Finance Ministry was planning to drastically reduce agricultural subventions in view of the surging food costs. However, farming in Europe still had to be protected. The common opinion in EU about agricultural that farming subventions should not be questioned at all, the way it's happening now. In 2006, European farmers received 50 million euros ($79 million) from the EU budget, 32 million euros of which were in direct payments.[37]
Earlier2009, the head of the International Monetary Fund warned that continued high prices of key foodstuffs could have dire consequences. Skyrocketing prices of commodities like rice, wheat, corn and milk have led to riots in developing countries around the world this month, including Indonesia, Egypt, the Philippines and Haiti. Some experts and government leaders are blaming the price fluctuation on increased biofuel production, which requires a fair amount of agricultural land. High energy prices and inflation are also seen as culprits.47
It found that around 20 percent was soy oil rather than rapeseed oil from the German harvest. But Green peace’s concern is that Germany's blending policy would not help to fight global warming since soy oil imports largely came from South America, where tropical rain forests were being slashed to cultivate soybeans. Huge areas of tropical rain forests are being destroyed for the new plantations, for example in Argentina. But, soy oil comes from North America, Argentina and Brazil. Soy oil from the US and Argentina does not have rain forest issues.
Imports from Brazil are largely handled by major trading houses such as ADM, Bunge and Cargill, which have voluntary agreements only to purchase soy oil from sustainable agriculture and not from areas using cleared tropical rain forests. Germany made the blending of biodiesel with fossil diesel at oil refineries compulsory in January 2007 as part of its policies to combat global warming. Fossil diesel must contain 4.4 percent biodiesel. Biofuel farming is also driving up world food prices, such as for corn and grains -- which are used to make ethanol.[38]
Biofuel Related Additional Notes and Information
*Dorneles claims that criticism of how biofuel production impacts food prices is not founded on scientific arguments and contains misconceptions. It does not distinguish the different raw materials used to produce ethanol. It ignores the challenge of global warming and how to mitigate its effects. It does not take into account how rising oil prices have impacted food prices. It does not approach the effects of the US dollar devaluation and financial speculation over agricultural commodity prices. It does not consider the impact of the fast growth in food demand in emerging economies. It ignores adverse climatic conditions in agricultural nations. It underestimates technological evolution.
It ignores the benefits that biofuel production may bring to developing countries, such as renewable energies, less oil imports, diversification of farmers' income and job generation in rural areas. Relevant data related rice production all over world: 1. Areas with rice crops were reduced by 50 percent between 1976 and 2007, thus releasing approximately 3 million hectares for other crops. 2. Even so, rice production increased by 50 percent in the same period, from 8 to 12 million tons, due to agricultural productivity gains. 3. Coincidentally, areas with sugarcane crops for ethanol increased by 3 million hectares in the same period. 4. Brazil's production of grain crops and sugarcane grew by 217 percent from 1976 to 2007.[39]
Following a short period of adjustment, however, there will be little gain in net farm incomes. Moreover, the much higher crop prices will have at least three negative side effects. First, livestock producers will face much higher costs for their most important input — feed, resulting in higher costs of supplying meats and meat products and, probably, a lower overall level of meat production and consumption. Second, new entrants into farming will experience much higher costs of entry as land prices and other farm inputs escalate in price. Third and perhaps most seriously, food prices throughout the world will rise. Increased demand for cereals and oilseeds to support a booming biofuels industry in the United States and Canada, two of the largest exporters of food in the world, inevitably will lead to higher food prices for everyone and increased hunger for many of the world’s poorest.
Conclusion
The expansion of biofuel production will depend largely on government policies with ambitious goals, such as decreasing dependence on fossil fuels and reducing greenhouse gas emissions. According to the current data, biofuels alone will not enable these goals to be met. Their advantages, however, are expected to increase if technologies that allow for the use of feedstocks that are less demanding to produce become more attractive economically. The effect of future biofuel market expansions on agriculture should also be monitored. Despite strong hopes for higher grain prices, there is still much uncertainty about the effect of an increased demand for grains for biofuel production.
Food and feed markets could well be affected, and production adjustments may offset the higher prices to the farmer. There is a need to develop policies that maximize social welfare of common people and to estimate the trade-offs between environmental amenities (like cleaner air and lower greenhouse gas emissions) and overall economic growth. The developed nations might be willing to sacrifice some economic growth to encourage development of a biofuels industry; but, how much? There is need of sustainable development technological investment with the private sector in establishing large-scale facilities for the production of next-generation renewable fuels.
Over the next decade and beyond, world wide policy must focus on developing sustainable biofuels—rather than just more biofuels—that can play a role in the emerging new energy economy. These fuels should be seen as part of an expanded renewable energy portfolio that emphasizes greater fuel efficiency and reduced demand as well as the development of new sustainable energy technologies that may one day go beyond biofuels. But this can only succeed if we avoid the mistakes of the past. Biofuel production affects agricultural, energy, environmental, climate change, national security, rural development, and job-creation policies.
Notes:
1.In many European countries, a 5% biodiesel blend is widely used and is available at thousands of gas
stations.
2. Andrew Bounds (2007-09-10): OECD warns against biofuels subsidies
3. Canada Biofuel potential Market-Oct 2008
6. EurekAlert (2009): 15 new highly stable fungal enzyme catalysts that efficiently break down
that if algae fuel replaced all the petroleum fuel in the United States, it would require 15,000 square
13. The Biofuels Frenzy: What’s in it for Canadian Agriculture? Green Paper Prepared for the Alberta
Institute of Agrologists Presented at the Annual Conference of Alberta Institute of Agrologists Banff,
Alberta March 28, 2007 Kurt K. Klein Danny G. LeRoy Department of Economics the University of
Lethbridge Lethbridge, Alberta
14. Compared to fossil fuels, Chroen Industries plant of Sun Diesel actually lower the CO2 emissions in
the product lifecycle by over 90 percent. It is an enticing claim and one which industry leaders,
particular from car industries, are eager to support
15. Kior is working on their “biomass catalytic cracking process” while Coskata claims they can produce
ethanol for $1 a gallon using old tires as a feedstock. Mascoma is working to build a “super bug” that
and ADM have been developing genetically modified cultivars for years but amid intense competition
trees by design for biofuel and timber purposes
17. Car manufacturers are especially eager to see second-generation biofuels a reality. The Choren
Industries of German claimed for “the world's first commercial production plant to convert biomass
into synthetic diesel fuel
18. Environment Minister Jairam Ramesh said India could not follow Brazil, which is a world leader in
the use of ethanol as transportation fuel. “We have land limitation and huge population pressure. We
have to have food security,” he maintained and added that though “it (bio-fuel) may play a small role.
19. According to projections in a report recently published by Brazil's RC Consulters agency.
*Almuth Ernsting, an expert at the industry monitoring organization Biofuelwatch.
20. In 2005, the Chhattisgarh Biofuel Development Authority was set up and, in 2006; a set of rules was
notified for biodiesel plantations in the state
21. The Orissa government’s Renewable Energy Development Agency is pushing the state’s draft
biofuels policy as a poverty alleviation programme.
22. “The Government of Canada is delivering a balanced biofuels policy that's good for environment,
good for economy, and good for our farm families," stated Federal Agriculture Minister Gerry Ritz
23. The “Corn Belt” consists of midwest states, notably Iowa, Indiana, Illinois and Ohio, as well as parts
of South Dakota, Nebraska, Kansas, Minnesota, Wisconsin, Michigan, Missouri and Kentucky
24. The provinces also offer similar tax incentives.
25. For a vehicle weighing less than 4.5 tonnes that consumes an average of 11 litres per 100 km and
travels 16,000 km annually (an average vehicle, according to the Statistics Canada Canadian Vehicle
Survey).
26. “How Biofuels Measure Up,” New Scientist, 23 September 2006.
27. Estimate obtained by using the Canadian average over the past 5 and 10 years of wheat and corn
seeded areas and yields (AAFC historical data).
28. We can meet the 10 percent target through biofuel production in the European Union [and imports of
raw materials, which do not lead to a conflict with food or rainforests," Gabriel on the sidelines of an
European Union.
29. Accelerated development of the United States’ biofuels industry, as called for in President’s State of
the Union Address on January 23, 2007 (which would involve an eight-fold increase in production of
biofuels by 2017) would displace only 15% of projected gasoline use in the United States
30. Faced with such stiff competition, many farmer-owned plants in the North America have either sold
out to large producers like Archer Daniels Midland or contracted with large firms like Broin
Companies or Delta-T Corporation for most of their plant operations.
31. We can meet the 10 percent target through biofuel production in the European Union [and imports of]
raw materials, which do not lead to a conflict with food or rainforests," Gabriel on the sidelines of an
EU environment meeting in Slovenia, “The big competition is not between the use of biomass for
energy and food but between feed and food," said Gabriel.
32. biofuel prodution countries have to move very carefully (the BBC/ EU Environment Commissioner
Stavros Dimas)
33. To take those concerns into account officials and parliamentarians agreed to a set of rules aimed at
making sure that only environmentally-friendly biofuels are counted towards the overall target, EU
34.Defenders of biofuels are on the defensive and rising awareness of biofuels' unintended consequences.
Even World Bank President Bob Zoellick calls biofuel production a "significant contributor" to the
food crisis.
35. Yet biofuels are here to stay, not just because of the farm communities in Brazil, Europe, and the US,
but also because of the zeitgeist that says source-diversification is the Holy Grail of energy policy
36. German cabinet ministers are not in complete agreement over how much biofuels are to blame for
food problems. Dominique Strauss-Kahn, head of the International Monetary Fund, warned of dire
consequences for people in developing countries should food prices remain high. "Thousands,
hundreds of thousands of people will be starving" and social unrest could lead to war, said Strauss-
Kahn on April 12/2008 at an IMF meeting in Washington.
37. The EU wants biofuels to cover 10 percent of its transportation needs by 2020. It is unacceptable for
the export of agro-fuels to pose a threat to the supply situation of the very people already living in
poverty, Development Minister Heidemarie Wieczorek-Zeul said Saturday in a statement prior to the
IMF meeting. The targets for [fuel] blends must be put to the test.
38. A study commissioned by the OPEC Fund for International Development (OFID) and prepared by the
International Institute for Applied Systems Analysis (IIASA)
39. The study, Biofuels and Food Security -- Implications of an Accelerated Biofuels Production, was
released at the 4th International OPEC Seminar was held on 3rd week of the March 2009
40. Suleiman Jasir Al-Herbish, the Director-General of OFID
41. IIASA’s Dr Mahendra Shah, one of the principal authors of the report
42. Guenther Fischer, another principal author of the report
43. UN Special Rapporteur for the Right to Food Jean Ziegler told German radio
44. The European Environment Agency (EEA), advisors to the European Commission, recommended
suspending its biofuel target.
45. Peter Brabeck-Letmathe, head of Nestle, the world's biggest food and Beverage Company, last month
argued that to grant enormous subsidies for biofuel production is morally unacceptable and
irresponsible. "There will be nothing left to eat," Letmathe said. A recent World Bank report blamed
biofuel production for having pushed up feedstock prices.
46. World Bank president Robert Zoellick said soaring food costs could potentially push 100 million
people deeper into poverty. A World Bank report 2009 said global wheat prices jumped 181percent
over the 36 months to February, with overall food prices up 83 percent.
47. It is "unacceptable for the export of agro-fuels to pose a threat to the supply situation of the very
people already living in poverty," Development Minister Heidemarie Wieczorek-Zeul said prior to the
IMF meeting. "The targets for [fuel] blends must be put to the test." “Thousands, hundreds of
thousands of people will be starving and social unrest could lead to war”, said Dominique Strauss-
Kahn on April 12/2008, at an IMF meeting in Washington.
* Ricardo Dorneles, the secretary for biofuels in Brazil's ministry for mines and energy
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[1] Financial Times. http://www.ft.com/cms/s/0/e780d216-5fd5-11dc-b0fe-0000779fd2ac.html, Retrieved on 2008-03-07.
[2]"With only 2/3 the energy of gasoline, ethanol costs more per mile", zFacts.com/2007-04-27, http://zfacts.com/p/436.html, retrieved on 2008-03-07.
[3] www.Hydrogensolar.com /Hydrogen Solar home [4]http://circa.europa.eu/Public/irc/env/fuel_quality/library?l=/stakeholder_october/presentations/copert_brusselsppt/_EN_1.0_&a=d COPERT Study: An assessment of the impact of ethanol-blendedpetrol [5]http://www.europarl.europa.eu/registre/docs_autres_institutions/commission_europeenne/sec/2007/0055/COM_SEC(2007)0055_EN.pdf Fuel Quality Directive Impact Assessment [6]http://www.usda.gov/oce/forum/2007%20Speeches/PDF%20PPT/CSomerville.pdf/ChrisSomervilleDevelopmentofCellulosicBiofuelsU.S.Dept.ofAgriculture Retrieved on 2008-01-15.
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[10] Bhojvaid, P. P. (2006): Biofuels: towards a greener and secure energy future.
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[12]Envirofuel/Australian Sustainable Mobility News/ 11 October 2007/Luke Hallam/Future biofuels - the fourth generation/
[14] French Ecology Minister Nathalie Kosciusko-Morizet said she was skeptical about using second generation biofuels. “That will take 10 to 20 years,” she told the news agency AFP, 29 April, 2008. IEA bioenergy,PressConferenceLaunchingInternationalBiofuelsForum".UnitedNationsDepartmentofPublicInformation.200703. http://www.un.org/News/briefings/docs/2007/070302_Biofuels.doc.htm. Retrieved on 2008-01-15; IPCC Third Assessment Report, accessed August 31, 2007. European Environment Agency (2006) How much bioenergy can Europe produce without harming the environment? EEA Report no.7; Marshall, A. T. (2007) Bioenergy from Waste: A Growing Source of Power, Waste Management World Magazine, April, p34-37.
[15]German Chancellor Angela Merkel called for rainforest protection in Brazil as well as cooperation with the country on biofuels during the first day of her first Latin America tour, May 14, 2008.
[16] www.dw-world.de/popups/9-12-2008/EU Agrees to Expand Use of Renewable Energy/Europe will need more of these to meet its target
[17] 9/12/2008 Delhi/Indian government bureau.
[18] Tehelka Magazine, Vol 5, Issue 30, Aug 02, 2008
[19]For more information on the Government of Canada's renewable fuels strategy, visit www.ecoaction.gc.ca. June 26, 2008/ OTTAWA, Ontario/ News Release/
[22]http://www.thetimesofindia.indiatimes.com/world/USA Senator Dick Dubin of Illinois has called for authorizing emergency food aid, and even broached the link between food scarcity and ethanol subsidies nowadays, http://www.timesofindia.indiatimes.com/world/USA. However, as a report in The Hill indicates (http://thehill.com/leading-the-news/ethanol-patt-of-crisis--says-durbin-2008-4-28, Durbin was hesitant to reject current policies subsidizing corn-based ethanol production.
[23]EcoENERGY/2009-02/ 24/ http://www.ecoaction.gc.ca/increasing the retail availability of renewable fuels through regulation
[24] Supporting the expansion of Canadian production of renewable fuels .On July 5, 2007 Prime Minister Stephen Harper announced the ecoENERGY for Biofuels Initiative, which will invest up to $1.5 billion over 9 years to boost Canada's production of renewable fuels such as ethanol and biodiesel.
[25] http://www.ecoaction.gc.ca/Assisting farmers to seize new opportunities in this sector: On April 23, 2007, the Minister of Agriculture and Agri-Foods officially launched the ecoAGRICULTURE Biofuels Capital Initiative (ecoABC).
[26] Globalandmail.com/ London / 15/07/06 / PM brands Canada an 'energy superpower’/Jane Taber/ senior political writer; with a report from Canadian Press.
[27] http://www.dw-world.de/popups/ Germany's Environment Minister Sigmar Gabriel/ Gabriel said fodder prices have also been rising.
[28] http://www.dw-world.de/popups Michael Mann, spokesman for EU Agriculture Commission Mariann Fischer Boel downplayed the role of biofuels in the current crisis.
[29] http://www.dw-world.de/popups/the news agency AFP/ French Ecology Minister Nathalie Kosciusko-Morizet http://www.dw-world.de/popups/ Food production top priority/ and French Agriculture Minister Michel Barnier.
[30] Hiroko Tabuchi: Economic Crisis favourable to Biofuel”, The Hindu, April 17, 2009
[31] George A. Pieler is Senior Fellow with the Institute for Policy Innovation and Jens F. Laurson is
Editor-in-Chief of the International Affairs Forum. Atlantic-community.org/ Biofuel for Thought/J.
[32] http://www.dw-world.de/popups/AFP news agency.
[33] TheBioenergySite News Desk/24-3-9/
[34] Seehofer said in an interview to the mass-circulation Bild newspaper, April 20/2008.
[35] www.dw-world.de/popups/ German Minister Calls for Reversal of EU Agricultural
[36] http://www.dw-world.de/popups/ a global problem. Seehofer is against cutting agricultural subventions
[37] http://www.dw-world.de/popups/Dire consequences/the UN Food Program has issued serious warnings about the situation in the world
[39] www.dw-world.de//biofuels/5-10-8/EU and Source: Brazilian Ministry for Mines & Energy
*Suwa Lal Jangu: Research Scholar Department of Political Science & Kausik Ghosh: M A Student, Department of Geography, Banaras Hindu University.
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