Biofuels: challenges and opportunities

By Dr Muhammad Ishaque and Muhammad Ahmad

BIOFUEL can be defined as solid, liquid, or gas fuel consisting of or derived from biomass. It is a material derived from organisms such as plants, animals and their by-products. Manure, garden waste and crop residues are all sources of biomass.

The definition used here is narrower, biofuel is defined as liquid or gas transportation fuel derived from biomass. It can also be used directly for heating or power; that is called biomass fuel. Biofuel is considered an important means of reducing greenhouse gas emissions and increasing energy security by providing a viable alternative to fossil fuels.

Biofuel can be produced from any carbon source that can be replenished rapidly e.g. plants. Different plants and plant-derived materials are used for manufacturing biofuel. Biomass is a renewable energy source based on the carbon cycle. Agricultural products specifically grown for biofuel production include corn and soybeans, in the United States; rapeseed, wheat and sugar beet in Europe; sugarcane in Brazil; palm oil in Southeast Asia; and jatropha in India.

Biodegradable outputs from industry, agriculture, forestry and households can be used for biofuel production, either using anaerobic digestion to produce biogas or using second generation biofuel processes; examples include straw, timber, manure, rice husks, sewage, and food waste. The use of biomass fuels can therefore contribute to waste management as well as fuel security and climate change.

Biofuels and other forms of renewable energy aim to be carbon neutral. This means that carbon released during the use of fuel, e.g. through burning to power transportation or generation of electricity is reabsorbed and balanced by the carbon absorbed by new plant growth. These plants are then harvested to make the next batch of fuel.

Carbon neutral fuels lead to no net increases in atmospheric carbon dioxide levels, which mean that global warming will not get any worse. Biofuels, hailed by many as the green solution to offset a coming oil shortage and reduce greenhouse gas emissions, are not a cure-all solution. Biofuels, which are made from crops, require huge quantity of water, a resource that is already in short supply in many parts of the world. Bio-energy could thus end up diverting water resources desperately needed for food crops.

Bio-fuels today have the connotation of an energy source of the future. These are made from plant material distilled into alcohol that can be blended into gasoline or used as energy source in flexible fuel cars. Biofuels produced from crops such as corn and soya provide a small but fast-growing share of motor fuel.

Most pundits agree that bio-fuels are here to stay and they are going to get bigger over time. The real issue in the debate seems however, on how big could be the contribution of biofuels in the global energy mix within a given frame of time and at what cost?

The increases in world oil and food prices have devastated the economies of low and middle-income oil importing countries. With soaring oil and food import bills and not much to export to pay for the costly oil and food, these countries are now looking at multilateral aid agencies for help.

But there is said to be an upside as well to this steep increase in the world prices of these two essentials. And those developing agricultural countries which so far had found it economically unprofitable to invest in food crops because of the heavy subsidies that the rich countries were giving to their farmers would now find it commercially viable to grow food commodities for home consumption as well as for export.

Most growth in bio-fuel sector over the past two years has been politically-driven. Europe is one of the world’s top producers of biofuels, which can substitute fossil fuels and are seen as a way to cut emissions of greenhouse gases that are believed to contribute to global warming. The EU wants to replace 10 per cent of its transport fuel with biofuels by 2020. China is aiming at 15 per cent. The US seems to be on track of doubling the volume of ethanol used in motor fuel to 7.5 billion gallons (28.4 billion liters) by 2012.

The demand for commodities such as industrial metals is expected to moderate on slower economic growth, while the supply response to high food prices has historically been quicker than in energy markets. The upshot is that as general inflationary pressures ease; speculative positions in oil should also be unwound, potentially leading to a very sharp correction.

Political rhetoric apart, there are some unintended consequences of the biofuels rage. And the most important of these is the increased price of foodstuffs derived from grains predominantly used to produce ethanol. Wheat price in the global markets has gone up as is evident in Pakistan too. Diverting corn or wheat into ethanol production is thus paradoxically forcing up prices of low-cost feed grain too.

Consequently products, such as beef, milk, mutton and eggs, may register sharp rise in the world. It looks as if the drive for energy security could be matched by an increasing level of food insecurity, especially for the poor of the world.

One would certainly find it hard to disagree with the argument that the declining dollar could have forced the exporters to push up the prices of their commodity to protect the purchasing parity of the currency they receive in exchange for their oil. But the increase in the price of oil is decidedly too high compared to the dollar’s decline.

Global production of biofuels amounted to 0.8EJ (quintillion joules) in 2005, or roughly one per cent of the total road transport fuel consumption. Technically up to 20EJ from conventional ethanol or biodiesel, or 11 per cent of total demand for liquid fuels in the transport sector has been judged by 2050. It means cure is worse than the disease.

Thus despite all the growth, biofuels share in the global energy mix would at most be around 10 per cent. And with the rate of global consumption projected to go up rapidly, in the overall analysis, the world would still depend on still greater supplies of fossil fuel. In absolute numbers, the demand for fossil fuels is to grow significantly.

Source: Daily Dawn, 7/7/2008

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