Publications

Survey of Energy Resources 2007

Biofuels

Ethanol
2006 was the year in which biofuels for transportation came into very public prominence, as rising world crude oil prices stimulated the US President in his January state-of-the-union address to advocate increased support for ethanol, both in its current production from maize and the future option of producing it from the extensive lignocellulosic resources contained in agricultural straws and wood. The US Congress supported what at the time seemed to be a very ambitious and large Renewable Portfolio Standard (RPS) of 28.4 hm3 by 2012. In fact, the rate of increase in ethanol production had just reached 25% per year and the amount produced in 2005 in the USA stood at 16.2 hm3 as shown in Fig. 9-4 , suggesting that the RPS goal could be reached within 3 years, by 2008.

The continued increases in the price of crude oil in 2005 and 2006 resulted in a reversal of the traditional relationship between the price of biomass energy and that of crude oil, something not seen since the 1930s. Fig. 9-5 shows the trend in nominal price terms of the higher heating values of Illinois yellow corn (maize) and of the average cost of imported crude into the USA each month since before the first energy crisis. As a consequence of the high prices of traded crude oil, many countries advanced their biofuel goals and, in the case of Brazil and the USA, large production gains occurred. The proportion of the world's gasoline pool provided by the 2006 estimate of ethanol output is about 2.5% (1.1 EJ of ethanol and 37.5 EJ of gasoline). The potential of biofuels for transportation is however quite finite; current global food production corresponds to a primary energy content of about 30 EJ/yr, while crude oil alone is around 160 EJ/yr. Thus the projected large growth of ethanol from maize in the USA could use the equivalent of 40% of today's crop (up from around 16%). The USA is the swing producer of maize, contributing about 40% to internationally-traded corn and it is hardly surprising that a drought in Australia that impacts on the production of wheat at a time of increased demand for fuel grain would drive the corn price up very rapidly, as is seen at the end of 2006 and in the early part of 2007 in Fig. 9-5.

The expansion of biofuels is not without controversy, as the production of ethanol from corn is only marginally energy-positive at about 1.4:1, while that from sugarcane in Brazil has a ratio of about 8 units of renewable liquid fuel to one of fossil energy input. And whereas Brazil has foregone most agricultural subsidy to its sugar industry, the agricultural sectors of both the USA and the EU countries are engaged in vast subsidies on agricultural commodities in general, and on ethanol or other biofuels specifically. The US subsidy regime for ethanol costs about US$ 5 billion per year at present. Agricultural subsidies have been challenged during the Doha round of World Trade Organization negotiations as being bad for the environment (by encouraging intensive agriculture) and for their negative effects on the development of  agriculture in third-world countries. Many of these countries would be capable of becoming major players (using Brazilian biofuels as an example) if there were neither subsidies nor tariff barriers such as the  US$ 143/m3 (54 c/US gal) imposed by the USA on Brazil.

Biodiesel
The other significant biofuel is biodiesel, which is currently produced from vegetable oils, animal fats and grease by esterification. The vegetable oils with carbon chain lengths of between 16 and 22 carbon atoms are generally in the form of triacyl glycerides (TAG) which on transesterification with methanol produce glycerol as a by-product and FAME (fatty acid methyl ester) as the precursor to biodiesel. After  FAME purification  and testing for compliance with either EN 14214 or ASTM D6751 standards the product can be sold as biodiesel and used as blends - typically B5 (5% biodiesel) to B20, depending on the engine warranties.

The second-generation biodiesel is often called 'renewable diesel' and is produced by treating vegetable oil with hydrogen over catalysts in oil refineries, to either blend or be co-processed with 'fossil diesel'. The resultant product can be used in the range of B5 - B50. As a fuel, the FAME biodiesel has about 90-95% of the volumetric energy content of regular diesel, and in combustion reduces some of the particulate and carbon monoxide emissions. The effect on NOx is not so clear cut, with many studies showing a slight increase.

In addition to vegetable oils, animal fats such as tallow and waste grease can also be converted to FAME; they are the lowest-cost resources available, mainly in urban areas.

The commercial resource base for vegetable oils comprises about 20 different species with soybean oil, palm/palm kernel oil, sunflower, rapeseed (Colza), and coconut oils being the largest sources.  According to the FAO Food Outlook series reports the 2004/2005 production of oils and fats was about 142 mt, with consumption running at around 138 mt and a 22% annual reserve stock ratio to consumption (www.fao.org/waicent/portal/statistics_en.asp).

World consumption for all purposes is increasing at about 4% per year, however the largest growth rates are in palm oil which together with soy oil comprise 50% of the annual vegetable oil production. Biodiesel production is increasing rapidly, but the statistics are not yet reliable enough to determine total production. However, FAME/biodiesel production capacity is better estimated and is the primary basis of production statistics.

Despite the current minority position of biodiesel relative to ethanol, the adoption of mandates in several countries will fuel a large growth in the near future. Brazil, for example, has a nationwide mandate for B2 in 2008 resulting in an estimated 1.1 hm3 demand for biodiesel (935 kt). The EU mandates for 5.75% biofuels in the transportation sector by 2010 are driving the rapid growth of biodiesel in the major EU economies and, like ethanol, production has leapt in the last few years (Fig. 9-6 ).
The estimated output for 2006 at 7.5 mt is equivalent to 6.8 mtoe or 0.3 EJ energy equivalent. While the energy balance for rapeseed biodiesel is around 4 units of energy for each unit of fossil input, it can be as high as 8:1 for high-yielding palm oil biodiesel. The processing of both rapeseed and soy produces considerable quantities of co-product meal which is used as an animal feed. The growing fuel market is introducing distortions into the animal-feed supply system, which is also having to accommodate increasing amounts of dried distillers' grains and solubles (DDGS) from the corn-ethanol production system. The two largest producers of palm oil are Malaysia and Indonesia and in 2006, owing to the number of proposed biodiesel facilities, the two countries agreed on a limit of 6 mt of palm oil capacity while the impacts of the anticipated expansion could be evaluated.

The agricultural commodity base of the current biofuels has ramifications for the sustainability of the food and animal-feed supply system, and many countries are looking to other biomass resources and second-generation biofuels for sustained growth.

The second-generation biofuels include renewable and green diesels. The former is a technology that incorporates vegetable oils into the crude oil-derived diesel production process to produce a renewable carbon-based diesel with no oxygen content and a very high cetane number, while the latter is the production of middle distillate by means of Fischer-Tropsch catalysts, using synthesis gas produced by the gasification of biomass. Fischer-Tropsch-like catalysts (Synthol process) can also produce ethanol and mixed alcohols. Alternative biotechnology approaches produce butanol in place of ethanol by the fermentation of sugars.