The price for biofuels sustainability

The production and usage of biofuels has increased worldwide, seeking goals of energy security, low-carbon energy and rural development. As biofuels trade increased, the European Union introduced sustainability regulations in an attempt to reduce the risks associated with biofuels. Producers were then confronted with costs of sustainability certification, in order to access the EU market. Hopes were that sustainably-produced biofuels would be rewarded with higher prices in the EU. Based on a review of recent literature, interviews with traders and price data from Platts, this paper explores whether sustainability premiums emerged and if so, did they represent an attracting feature in the market for sustainable biofuels. This article finds that premiums for ethanol and biodiesel evolved differently between 2011 and 2012, but have been in general very small or inexistent, with certified fuels becoming the new norm in the market. For different reasons, there has been an apparent convergence between biofuel policies in the EU and the US. As market operators perceive a long-term trend for full certification in the biofuels market, producers in developing countries are likely to face additional challenges in terms of finance and capacity to cope with the sustainability requirements.     

Lessons from first generation biofuels and implications for the sustainability appraisal of second generation biofuels

AimsThe emergence of second generation (2G) biofuels is widely seen as a sustainable response to the increasing controversy surrounding the first generation (1G). Yet, sustainability credentials of 2G biofuels are also being questioned. Drawing on work in Science and Technology Studies, we argue that controversies help focus attention on key, often value-related questions that need to be posed to address broader societal concerns. This paper examines lessons drawn from the 1G controversy to assess implications for the sustainability appraisal of 2G biofuels.ScopeWe present an overview of key 1G sustainability challenges, assess their relevance for 2G, and highlight the challenges for policy in managing the transition. We address limitations of existing sustainability assessments by exploring where challenges might emerge across the whole system of bioenergy and the wider context of the social system in which bioenergy research and policy are done.ConclusionsKey lessons arising from 1G are potentially relevant to the sustainability appraisal of 2G biofuels depending on the particular circumstances or conditions under which 2G is introduced. We conclude that sustainability challenges commonly categorised as either economic, environmental or social are, in reality, more complexly interconnected (so that an artificial separation of these categories is problematic).     

Recent developments of biofuels/bioenergy sustainability certification: A global overview

The objective of this paper is to provide a review on the latest developments on the main initiatives and approaches for the sustainability certification for biofuels and/or bioenergy. A large number of national and international initiatives lately experienced rapid development in the view of the biofuels and bioenergy targets announced in the European Union, United States and other countries worldwide. The main certification initiatives are analysed in detail, including certification schemes for crops used as feedstock for biofuels, the various initiatives in the European Union, United States and globally, to cover biofuels and/or biofuels production and use. Finally, the possible way forward for biofuel certification is discussed. Certification has the potential to influence positively direct environmental and social impact of bioenergy production. Key recommendations to ensure sustainability of biofuels/bioenergy through certification include the need of an international approach and further harmonisation, combined with additional measures for global monitoring and control. The effects of biofuels/bioenergy production on indirect land use change (ILUC) is still very uncertain; addressing the unwanted ILUC requires sustainable land use planning and adequate monitoring tools such as remote sensing, regardless of the end-use of the product.     

External governance and the EU policy for sustainable biofuels,the case of Mozambique

Growing demand for transport biofuels in the EU is driving an expansion of the industry in developing countries. Large-scale production of energy crops for biofuel, if mismanaged, could cause detrimental environmental and social impacts. The aim of this study is to examine whether the newly adopted EU Directive 2009/28/EC and its sustainability certification system can effectively ensure sustainable production of biofuels outside the EU. Mozambique, a least developed country with biofuels ambitions, is selected as empirical case. The effectiveness of the EU policy in analysed employing ideal models of external governance (hierarchical, market and network governance) as analytical framework. The findings show that the EU attempts to impose its rules and values on sustainable biofuels using its leverage through trade. The market approach adopted by the EU is expected to produce only unstable (subject to abrupt changes of market prices and demand) and thin (limited to climate and biodiversity issues) policy results. Stronger emphasis on a network oriented approach based on substantial involvement of foreign actors, and on international policy legitimacy is suggested as a way forward.     

The policy and practice of sustainable biofuels: Between global frameworks and local heterogeneity. The case of food security in Mozambique

This study explores the relationship between different biofuel production systems, the context in which they operate, and the extent to which various types of frameworks and schemes are able to monitor and promote their sustainability. The paper refers to the European Union Renewable Energy Directive and two international certification schemes (Roundtable on Sustainable Biofuels and NTA 8080/81) that can provide a ‘licence to sell’ biofuels on the EU market, and to the Mozambican policy framework for sustainable biofuels that provides a ‘licence to produce’ biomass for biofuels in Mozambique. Food security is used as a case study, and the food security impacts of two agro-industrial and two smallholder biofuel projects in Mozambique are described and analysed. The sustainability frameworks and schemes used in this study are able to address some, but not all, of the heterogeneity between and within different biofuel production systems. The emphasis is on monitoring agro-industrial projects while smallholder projects tend to slip through the net even when their negative impacts are evident. We conclude that globally applicable sustainability principles are useful, however, they should be operationalised at local or production system levels. This approach will support balancing between global frameworks and local heterogeneity.     

The future of bioenergy and rural development policies in Africa and Asia

This special issue has presented some of the specific findings of the RE-Impact Project which was commissioned and funded by the EuropeAid Cooperation Office from 2007 until its conclusion in 2010. The project aimed to provide impact assessment frameworks and influence relevant policies through direct involvement in bioenergy projects and policy analysis in South Africa, Uganda, India and China. The papers summarised here have covered issues related to Jatropha curcas and forest-based bioenergy in these countries. Taking an overall look at the project findings we can identify a number of general conclusions relevant for the future of bioenergy and rural development in Africa and Asia. First, only local and context-specific sustainability assessment can identify the risk and responsibilities of the different groups and the exact impact on the environment. Second, many initiatives both in biofuels and forest-based bioenergy are marred by a lack of understanding of the life-cycle financial analysis. Third, careful consideration of local physical and social conditions and the economics of the production chain can identify real opportunities for rural development using bioenergy. The current global impasse in bioenergy policies could actually be advantageous to the development of bioenergy in developing countries. Without the pressure from America and Europe to develop bioenergy systems for climate change mitigation, countries in Africa and Asia may have the breathing room to shape bioenergy systems for their own internal energy supply in an orderly fashion. However, in order to avoid environmental and social impacts it will be necessary to articulate together elements of a number of measures including market-based certification, national policy formulation, national legislation, impact assessments, sustainability planning, land use planning, research, monitoring and evaluation taking into account country and project specific sustainability criteria. Unfortunately, many of the countries in Africa and Asia where bioenergy can play an important role still lack institutional structures able to articulate this sustainable development.     

International experiences of ethanol as transport fuel: Policy implications for India

The need for biofuels, particularly liquid ones like ethanol and biodiesel, for transport has been felt by most of the countries and their governments have been trying to promote these fuels. Compared to petroleum, the use of biofuels for transport is still quite low in nearly every country. By far the largest production and use is of ethanol in the United States and Brazil, where similar volumes are used—many times higher than in any other country. Even then, ethanol represents less than 3% of transport fuel in USA and a little more than 50% of gasoline demand (by volume) in Brazil. However many countries, including the USA, Canada, several European countries (and the European Union), Australia and Japan including India are considering or have adopted a variety of policies that could result in much higher biofuels use over the next decade. This paper makes an attempt to draw upon the cross-country international experiences of ethanol as transport fuel to suggest policy implications for India     

Spatial scale and social impacts of biofuel production

The prospect of biofuels going ‘mainstream’ has drawn more attention to the social impacts of the production and use of transport biofuels. Since 2007, many media stories have appeared about alleged negative impacts of biofuels, notably the price of food going up or land-grab by plantation developers. These stories stand in stark contrast with the rosy picture painted by some academics involved in the technical development of bioethanol or biodiesel. This paper explores the questions when and why negative social impacts are likely to occur and under what circumstances more positive impacts might be expected. These impacts are discussed for three geographically defined biofuel supply chains; north-north, south-north and south-south. These three systems differ in the spatial scale of production and consumption and with that comes a different distribution of environmental, social and economic impacts. In the case of domestic production and consumption in developed countries, the social impacts are relatively minor and can be mitigated by social policies. Large scale, export-oriented production systems in developing countries could theoretically yield positive social impacts, but this would require on the one hand the tailored design of ‘pro-poor’ social innovations and interventions on the ground and on the other hand a certification of the supply chain feeding into consumer demand for ‘ethical’ fuel. The latent existence of this demand might be significant but recent NGO campaigns have severely undermined the ethical credentials of biofuels. It would require a persistent and collaborative effort to restore the brand value of ‘green’ fuel, an effort which will require better legislation and radically improved monitoring and enforcement practices in countries where the very absence of these has led to, and is still causing, the large scale destruction of habitats that are carbon sinks of global importance. The significant levels of government funding for biofuels stand in strong contrast with the problematic environmental and social governance of international biofuels supply chains. Notwithstanding the ‘must tackle climate change’ rhetoric by policy makers and in policy documents, this suggests that biofuels policy may be primarily driven by other concerns, especially regarding energy security. We argue that policies that are designed for a rather narrowly defined purpose of ‘security of supply’, cannot be realistically expected to yield high social or environmental benefits, and certainly not abroad.     

How much hope should we have for biofuels?

This paper revisits the recent developments in biofuel markets and their economic, social and environmental impacts. Several countries have introduced mandates and targets for biofuel expansion. Production, international trade and investment have increased sharply in the last few years. However, some analysts linked biofuels to the 2007-2008 global food crisis. Existing studies diverge on the magnitude of the projected long-term impacts of biofuels on food prices and supply, with studies that model only the agricultural sector showing higher impacts and studies that model the entire economy showing relatively lower impacts. In terms of climate change mitigation, biofuels reduces GHG emissions only if GHG emissions related to land-use change are avoided. When biofuel production entails conversion of forest to cropland, net reduction of GHG would not be realized for many years. Existing literature does not favor the diversion of food for large-scale biofuels production, but the regulated expansion of biofuels in countries with surplus lands and a strong biofuel industry cannot be ruled out. Developments in non-food based or cellulosic (or second generation) biofuels may offer some hope, yet they still compete with food supply through land use and are currently constrained by a number of technical and economic barriers.     

Status and perspectives of renewable energy policy and deployment in the European Union—What is needed to reach the 2020 targets?

This article evaluates the status of current RES deployment, policies and barriers in the EU-27 member states and compares it to the required to meet the 2020 targets. The evaluation relies strongly on the quantitative deployment status and policy effectiveness indicators. European RES deployment and policy has progressed strongly in recent years, but the growth here has been mainly driven by effective policies in a small or medium number of top runner countries. Across Europe, the highest average policy effectiveness over six years was reached for onshore wind (4.2%), biofuels (3.6%) and biomass electricity (2.7%), while in the heat sector, all technologies score below 2%. Comparing the recent progress to the required growth for meeting the 2020 target, it appears that some countries largely exceed the interim targets of the RES Directive 2009/28/EC. Despite this, Europe will need additional policy effort to reach the 2020 target. Critical success factors include implementing effective and efficient policies that attract sufficient investments, reducing administrative and grid related barriers, especially in currently less advanced countries, upgrading the power grid infrastructure, dismantling financial barriers in the heat sector, realising sustainability standards for biomass, and lowering energy demand through increased energy efficiency efforts.     

Biofuels in the U.S. – Challenges and Opportunities

Biofuels are of rapidly growing interest for reasons of energy security, diversity, and sustainability – as well as for greenhouse gas mitigation. In recent years, the U.S. has enacted regulations – and adopted aggressive goals – to encourage increased usage of biofuels. Individual States (especially California) have taken even stronger positions with respect to biofuels. Initial efforts have focused mainly on ethanol, produced via fermentation of sugars from grains (especially corn). Today's R&D focus is on “2nd Generation Biofuels” that are produced from a variety of biomass feedstocks utilizing a wide range of conversion technologies. This paper summarizes policy and regulatory drivers for biofuels in the U.S., describes usage trends and projections, and highlights major R&D efforts to promote development and commercialization of 2nd Generation Biofuels. R&D is being conducted in many areas, including biomass resource assessment, development of new biomass feedstocks, improved conversion technologies, and integration of systems. Other important considerations include fuel quality and specifications, as well as requirements for blending, distribution, and storage. Considerable R&D, policy, and regulatory efforts are also focused on the energy and environmental consequences of biofuels. This includes not only direct emissions associated with vehicular uses, but also the fuels' life-cycle impacts with respect to total energy usage, greenhouse gas emissions, and multi-media effects. Due to the wide diversity of biomass feedstocks, conversion technologies, and systems integration approaches, the life-cycle impacts of biofuels can vary widely.     

Multi-actor governance of sustainable biofuels in developing countries: The case of Mozambique

This paper describes and analyses the multi-actor governance process that made Mozambique the first African nation-state to develop a national policy framework for sustainable biofuels. The paper draws on findings from action research conducted in Mozambique between December 2008 and July 2012. We analyse interactions between the changing governance context, the course of the multi-actor governance process, and the choices in relation to governance framework characteristics and content for four successive stages of governance framework development. This provides the basis for reflection on the competences required for effective multi-actor sustainability governance, and a discussion about the role of the nation-state in sustainability governance of global economies such as biofuels.The governance framework for sustainable biofuels has contributed to a more transparent and secure investment climate for biofuels in Mozambique. Key factors for success were (1) the presence of different types of competences during the various stages of the governance framework development, (2) closing the gap between ‘licences to sell’ and ‘licences to produce’ across different governance levels, and (3) balancing between the short- and long-term objectives for biofuel production in Mozambique and requirements of global biofuel markets. Developing-country nation-states can provide an essential contribution to these success-factors for global governance of sustainable biofuels.     

Potentials and prospects for renewable energies at global scale

Renewable energies (RE) represent a cornerstone to steer our energy system in the direction of sustainability and supply security. Generating electricity, heat or biofuels from renewable energy sources has become a high priority in the energy policy strategies at national level as well as at a global scale. Challenging goals for these “new” supply options to meet our energy demands have been set, e.g. at European level by the commitment of meeting 20% of the overall energy demand from renewable energy sources by 2020.     

Development of a sustainability reporting scheme for biofuels: A UK case study

In 2008, the UK launched the first regulatory sustainability reporting scheme for biofuels. The development of the scheme, managed by the Low Carbon Vehicle Partnership for the Department for Transport, involved extensive stakeholder engagement. The scheme has significantly increased understanding by policy-makers, the biofuels industry and its supply chains on how to monitor and manage the sustainability risks of biofuels and increase their greenhouse-gas benefits. It is providing a practical model for similar developments globally. To receive certificates in order to meet volume obligations under the Renewable Transport Fuel Obligation (RTFO), suppliers must provide a monthly carbon and sustainability report on individual batches of renewable fuels they supply into the UK. The Renewable Fuels Agency produces aggregate monthly reports of overall performance and quarterly updates of individual supplier performance. This scheme is an important first step to assist the biofuels industry to demonstrate its environmental credentials and justify the subsidies received. The paper provides a case study of the development of the scheme, its initial outcomes and outstanding challenges.     

Assessment of biofuels supporting policies using the BioTrans model

The introduction of advanced, 2nd generation biofuels is a difficult to forecast process. Policies may impact the timing of their introduction and the future biofuels mix. The least-cost optimization model BioTrans supports policy analyses on these issues. It includes costs for all parts of the supply chain, and endogenous learning for all biofuels technologies, including cost reductions through scale. BioTrans shows that there are significant lock-in effects favouring traditional biofuels, and that the optimal biofuels mix by 2030 is path dependent. The model captures important barriers for the introduction of emerging technologies, thereby providing valuable quantitative information that can be used in analyses of biofuels supporting policies. It is shown that biodiesel from oil crops will remain a cost effective way of producing biofuels in the medium term at moderate target levels. Aiming solely at least-cost biofuel production is in conflict with a longer term portfolio approach on biofuels, and the desire to come to biofuels with the lowest greenhouse gas emissions. Lowering the targets because of environmental constraints delays the development of 2nd generation biofuels, unless additional policy measures (such as specific sub targets for these fuels) are implemented.     

Global assessment of research and development for algae biofuel production and its potential role for sustainable development in developing countries

The possibility of economically deriving fuel from cultivating algae biomass is an attractive addition to the range of measures to relieve the current reliance on fossil fuels. Algae biofuels avoid some of the previous drawbacks associated with crop-based biofuels as the algae do not compete with food crops. The favourable growing conditions found in many developing countries has led to a great deal of speculation about their potentials for reducing oil imports, stimulating rural economies, and even tackling hunger and poverty. By reviewing the status of this technology we suggest that the large uncertainties make it currently unsuitable as a priority for many developing countries. Using bibliometric and patent data analysis, we indicate that many developing countries lack the human capital to develop their own algae industry or adequately prepare policies to support imported technology. Also, we discuss the potential of modern biotechnology, especially genetic modification (GM) to produce new algal strains that are easier to harvest and yield more oil. Controversy surrounding the use of GM and weak biosafety regulatory system represents a significant challenge to adoption of GM technology in developing countries. A range of policy measures are also suggested to ensure that future progress in algae biofuels can contribute to sustainable development.     

Assessing biofuels: Aiming for sustainable development or complying with the market?

The growing interest in biofuels has led to increasing concern about their wider implications, particularly if grown for transport use in large scale. Such concerns include environmental, social and economic issues. To counterbalance the possible negative effects, a series of measures are being put in place to help their sustainability. Nevertheless, considering the different meanings of sustainability in different parts of the world and the need to expand productive rural activities, the differences between trying to assure a commodity and the benefits or impacts at local level raise the questions between the aims of sustainability and the need to comply with a market. The ideal situation would be to reconcile both aspects, which in practise represent a major challenge for governments and industry. This paper provides an overview on the sustainability assessment of biofuels to consider a possible way forward.     

Biofuels development in Sub-Saharan Africa: Are the policies conducive?

This paper analyses national, regional and international biofuels policies and strategies to assess whether these policies promote or undermine the development of biofuels sector in Africa. Despite having a huge comparative advantage in land, labour and good climatic conditions favourable for the growing of energy crops, few countries in Sub-Saharan Africa have included biofuels strategies in their energy or national development policies. Further results show that while developed countries commit huge financial resources for research, technology development and the provision of tax-incentives to both producers and consumers, there is little government support for promoting biofuels in Africa. Although the consequences of biofuels on food supply remain uncertain, the mandatory blending of biofuels with fossil fuels by industrialized countries will create demand for land in Africa for the growing of energy crops for biofuels. This paper urgently calls upon national governments in Sub-Saharan Africa to develop appropriate strategies and regulatory frameworks to harness the potential economic opportunities from biofuels sector development, while protecting the environment and rural communities from the adverse effects of land alienation from the mainstream agriculture towards the growing of energy crops for biofuels at the expense of traditional food crops.     

Critical analysis on hydrogen as an alternative to fossil fuels and biofuels for vehicles in Europe

In recent times, the global debate on the environment has been centered on CO₂ emissions. This gas is the major cause of the “greenhouse effect” and people are more concerned with the idea that the emissions of this gas should be minimized. As a result of this concern, the Kyoto Protocol was enacted and subscribed to by many countries, setting the maximum gas emissions for them.Fossil fuels are a major source of CO₂ emissions. For some years now The European Union has been seeking to promote some years now the use of biofuels as substitutes for diesel or petrol for transport purposes. As a result of this policy, in 2003 the European Union (EU) Directive 2003/30/EC [1] was developed with the aim of promoting the use of biofuels as a substitute for diesel or gasoline among European Union countries as well as to contribute to fulfilling the commitments acquired on climate change, security of supply in environmentally friendly conditions and the promotion of renewable energy sources.In order to achieve these goals, the directive forces all EU members to ensure that before December 31 of 2010 at least 5.75% of all gasoline and diesel fuels sold for transport purposes are biofuels. European Union countries have social and economic characteristics unique to themselves. The energy dependence on foreign sources, the features of the agricultural sector or the degree of industrialization varies greatly from one country to another. In this context, it is questionable whether the obligation imposed by this directive is actually achieving in its application uniform and/or identical goals in each of the countries involved and whether the actions of the various governments are also aligned with these goals. All these ideas were developed in a previous report (Sobrino and Monroy (2009) [2]).This report examines the possibility of using hydrogen as an alternative to fossil fuels and biofuels from a technical, economic and environmental point of view in the specific case of a European Union country: Spain.     

Stakeholders' perceptions on challenges and opportunities for biodiesel and bioethanol policy development in Thailand

Thailand is Southeast Asia's largest promoter of biofuels. Although, Thailand promotes the use of biofuels, it has yet to achieve its policy targets. This paper focuses on the first generation biofuel development in Thailand and examines the perceptions of seven stakeholder groups to guide further policy development. These stakeholders were feedstock producers, biofuel producers, government agencies, car manufacturers, oil companies, non-profit organizations and end users. It combines a Strengths, Weakness, Opportunities and Threats (SWOT) framework with an Analytical Hierarchy Process (AHP) framework and a TOWS Matrix for analysis of stakeholder's perceptions to propose priorities for policy development. Five policies were of high priority for development of biofuel. These are: (1) promoting biofuel production and use in long term through government policies, (2) revising government regulations to allow sale of biofuel products to other domestic industries while keeping retail prices of blended biofuels below those of regular ethanol and biodiesel, (3) improving farm management and promoting contract farming, (4) expanding cultivation area and yield without affecting food production and environmental sustainability, and (5) balancing biofuel feedstock use between the food and energy industries.