Economy-wide impacts of biofuels in Argentina

Argentina is one of the world's largest biodiesel producers and the largest exporter, using soybeans as feedstock. Using a computable general equilibrium model that explicitly represents the biofuel industry, this study carries out several simulations on two sets of issues: (i) international markets for biofuel and feedstock, such as an increase in prices of soybean, soybean oil, and biodiesel, and (ii) domestic policies related to biofuels, such as an introduction of biofuel mandates. Both sets of issues can have important consequences to the Argentinean economy. The simulations indicate that increases in international prices of biofuels and feedstocks would increase Argentina's gross domestic product and social welfare. Increases in international prices of ethanol and corn also can benefit Argentina, but to a lesser extent. The domestic mandates for biofuels, however, would cause small losses in economic output and social welfare because they divert part of biodiesel and feedstock from exports to lower-return domestic consumption. An increase in the export tax on either feedstock or biodiesel also would lead to a reduction in gross domestic product and social welfare, although government revenue would rise.     

Biomass energy in Vojvodina: Market conditions,environment and food security

In this study, the policy, market conditions and food security of biomass energy sources are assessed for supplying the future needs of Vojvodina. The Autonomous Province of Vojvodina is an autonomous province in Serbia, containing about 27% of its total population according to the 2002 Census. It is located in the northern part of the country, in the Pannonia plain, in southeastern Europe.Vojvodina is an energy-deficient province. Vojvodina also has a large potential for renewable energy, especially energy from biomass (biodiesel and bio-ethanol). The lack of knowledge about renewable energy technologies by most policy-makers, potential consumers, and energy firm managers has played against renewable energy developments. The environmental impacts of programs that encourage biofuel production, farmland land requirements and the impacts on food production are also discussed, considering the life cycle analysis (LCA) as a tool.It is concluded that the rise in the use of biofuels is inevitable and that international cooperation, regulations and certification mechanisms must be established regarding the use of land, the mitigation of environmental and social impacts caused by biofuel production. It is also mandatory to establish appropriate working conditions and decent remuneration for workers of the biofuels production chain.     

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.     

Impacts of a United States’ biofuel policy on New Zealand's agricultural sector

The rise in oil prices has spurred interest in biofuels. Policies in the United States like the renewable fuel standard (RFS) have led to an expansion of ethanol production, while the New Zealand government has mandated a minimum level of biofuel sales.The research used a partial equilibrium model of international trade to quantify the price and farmgate income effects of the US RFS policy. The goal was to examine the competition between food and biofuel production and to quantify the impact of the policy on the agricultural sector in New Zealand.The RFS policy has a significant impact on corn prices, but a small effect on livestock prices and production. There thus appears to be little conflict between food and fuel uses for corn at the level of the RFS mandate. New Zealand's pasture-based livestock sector benefits from the use of corn for ethanol production: it receives better prices for its products, but does not face the same input cost increases as competitors. The results suggest that New Zealand faces an interesting decision: it could support investment in biofuels research, or benefit from the biofuels boom through the indirect impacts on demand and prices for meat and milk.     

Oil price,biofuels and food supply

The price of oil could play a significant role in influencing the expansion of biofuels, but this issue has yet to be fully investigated in the literature. Using a global computable general equilibrium (CGE) model, this study analyzes the impact of oil price on biofuel expansion, and subsequently, on food supply. The study shows that a 65% increase in oil price in 2020 from the 2009 level would increase the global biofuel penetration to 5.4% in 2020 from 2.4% in 2009. If oil prices rise 150% from their 2009 levels by 2020, the resulting penetration of biofuels would be 9%, which is higher than that would be caused by current mandates and targets introduced in more than forty countries around the world. The study also shows that aggregate agricultural output drops due to an oil price increase, but the drop is small in major biofuel producing countries as the expansion of biofuels would partially offset the negative impacts of the oil price increase on agricultural outputs. An increase in oil price would reduce global food supply through direct impacts as well as through the diversion of food commodities and cropland towards the production of biofuels.     

Land use change in a biofuels hotspot: The case of Iowa, USA

This study looks at the land use impact of the biofuels expansion on both the intensive and extensive margin, and its environmental consequences. We link economic, geographical and environmental models by using spatially explicit common units of analysis and use remote sensing crop cover maps and digitized soils data as inputs. Land use changes are predicted via economic analysis of crop rotation choice and tillage under alternative crop prices, and the Environmental Policy Integrated Climate (EPIC) model is used to predict corresponding environmental impacts. The study focuses on Iowa, which is the leading biofuels hotspot in the U.S. due to intensive corn production and the high concentration of ethanol plants that comprise 28% of total U.S. production. We consider the impact of the biofuels industry both on current cropland and on land in the Conservation Reserve Program (CRP), a land set-aside program. We find that substantial shifts in rotations favoring continuous corn rotations are likely if high corn prices are sustained. This is consistent with larger scale analyses which show a shift of the current soybean production out of the Corn Belt. We find that sediment losses increase substantially on the intensive margin, while nitrogen losses increase less. Returning CRP land into production has a vastly disproportionate environmental impact, as non-cropped land shows much higher negative marginal environmental effects when brought back to row crop production. This illustrates the importance of differentiating between the intensive and extensive margin when assessing the expansion of biofuel production.     

Dynamic impacts of high oil prices on the bioethanol and feedstock markets

This study investigates the impacts of high international oil prices on the bioethanol and corn markets in the US. Between 2007 and 2008, the prices of major grain crops had increased sharply, reflecting the rise in international oil prices. These dual price shocks had caused substantial harm to the global economy. Employing a structural vector auto-regression model (SVAR), we analyze how increases in international oil prices could impact the prices of and demand for corn, which is used as a major bioethanol feedstock in the US. The results indicate that an increase in the oil price would increase bioethanol demand for corn and corn prices in the short run and that corn prices would stabilize in the long run as corn exports and feedstock demand for corn decline. Consequently, policies supporting biofuels should encourage the use of bioethanol co-products for feed and the development of marginal land to mitigate increases in the feedstock price.     

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.     

Biofuel investment in Tanzania: Omissions in implementation

Increasing demand for biofuels as a component of climate change mitigation, energy security, and a fossil fuel alternative attracts investors to developing countries like Tanzania. Ample unused land is critical for first generation biofuels production and an important feature to attract foreign direct investments that can contribute towards agricultural modernization and poverty reduction initiatives. Despite the economic justifications, the existing institutional and infrastructural capacities dictate the impacts of biofuels market penetrations. Furthermore, exogenous factors like global recessionary pressure depressed oil prices below the level at which biofuel production were profitable in 2007, making Tanzania’s competitiveness and potential benefits questionable.     

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.     

The impact of oil prices on bioenergy,emissions and land use

We evaluate how alternative future oil prices will influence the penetration of biofuels, energy production, greenhouse gas (GHG) emissions, land use and other outcomes. Our analysis employs a global economy wide model and simulates alternative oil prices out to 2050 with and without a price on GHG emissions. In one case considered, based on estimates of available resources, technological progress and energy demand, the reference oil price rises to $124 by 2050. Other cases separately consider constant reference oil prices of $50, $75 and $100, which are targeted by adjusting the quantity of oil resources. In our simulations, higher oil prices lead to more biofuel production, more land being used for bioenergy crops, and fewer GHG emissions. Reducing oil resources to simulate higher oil prices has a strong income effect, so decreased food demand under higher oil prices results in an increase in land allocated to natural forests. We also find that introducing a carbon price reduces the differences in oil use and GHG emissions across oil price cases.     

The GHG balance of biofuels taking into account land use change

The contribution of biofuels to the saving of greenhouse gas (GHG) emissions has recently been questioned because of emissions resulting from land use change (LUC) for bioenergy feedstock production. We investigate how the inclusion of the carbon effect of LUC into the carbon accounting framework, as scheduled by the European Commission, impacts on land use choices for an expanding biofuel feedstock production. We first illustrate the change in the carbon balances of various biofuels, using methodology and data from the IPCC Guidelines for National Greenhouse Gas Inventories. It becomes apparent that the conversion of natural land, apart from grassy savannahs, impedes meeting the EU's 35% minimum emissions reduction target for biofuels. We show that the current accounting method mainly promotes biofuel feedstock production on former cropland, thus increasing the competition between food and fuel production on the currently available cropland area. We further discuss whether it is profitable to use degraded land for commercial bioenergy production as requested by the European Commission to avoid undesirable LUC and conclude that the current regulation provides little incentive to use such land. The exclusive consideration of LUC for bioenergy production minimizes direct LUC at the expense of increasing indirect LUC.     

Biofuels versus food production: Does biofuels production increase food prices?

Rapidly growing fossil energy consumption in the transport sector in the last two centuries caused problems such as increasing greenhouse gas emissions, growing energy dependency and supply insecurity. One approach to solve these problems could be to increase the use of biofuels.Preferred feedstocks for current 1st generation biofuels production are corn, wheat, sugarcane, soybean, rapeseed and sunflowers. The major problem is that these feedstocks are also used for food and feed production.The core objective of this paper is to investigate whether the recent increase of biofuels production had a significant impact on the development of agricultural commodity (feedstock) prices. The most important impact factors like biofuels production, land use, yields, feedstock and crude oil prices are analysed.The major conclusions of this analysis are: In recent years the share of bioenergy-based fuels has increased moderately, but continuously, and so did feedstock production, as well as yields. So far, no significant impact of biofuels production on feedstock prices can be observed. Hence, a co-existence of biofuel and food production seems possible especially for 2nd generation biofuels. However, sustainability criteria should be seriously considered. But even if all crops, forests and grasslands currently not used were used for biofuels production it would be impossible to substitute all fossil fuels used today in transport.     

Insights into biofuel development in Burkina Faso: Potential and strategies for sustainable energy policies

In many African countries, the upswing in oil prices is one factor that favours the adoption and implementation of a national biofuel policy. This trend has a major impact on state budgets and domestic trade balances, while also limiting the access of rural inhabitants to modern energy services. Contribution of biofuels in stabilizing the energy sector, influences ongoing negotiations on the global dynamics of climate change, the reduction in greenhouse gas (GHG) emissions and sustainable development. The question of biofuels as an alternative energy thus depends on international, national and local considerations. Biofuels represent opportunities, e.g., energy independence and security, new national income and employment sources, as well as potential food security problems. African policy makers therefore need to make the right choices to guide the development of biofuel production and use.This article aims to support the development of a biofuel policy by reviewing the latest technical, economic, environmental and social knowledge so as to be able to evaluate the potential and limits of biofuels in Burkina Faso.     

Current state and environmental impact assessment for utilizing oil palm empty fruit bunches for fuel,fiber and fertilizer – A case study of Malaysia

This paper describes the trend of utilizing oil palm residue, i.e. the empty fruit bunches (EFB) left after extraction of the palm oil, using a case study of Malaysia, which is one of the world's major palm oil producers, and discusses the environmental performance of recycling technologies being developed in Malaysia for fuel, fiber, and fertilizer. Seven technologies are analyzed: ethanol production, methane recovery, briquette production, biofuel for combined heat and power (CHP) plants, composting, medium density fiberboard (MDF) production, and pulp and paper production. The life cycle assessment (LCA) method is used to discuss the environmental impacts of these technologies for adding value to this biomass. Sensitivity analyses are conducted to determine the land use effects for the various technologies utilizing EFB and to estimate the energy generation potential of raw EFB in CHP plants and methane production. Among the technologies for energy production, CHP plants have the best performance if the electricity generated is connected to the national grid, with superior benefits in the majority of impact categories compared to briquette, methane, and ethanol production. Overall, we find that methane recovery and composting are more environmentally friendly than other technologies, as measured by reduction of greenhouse gas emissions. Pulp and paper, and MDF production are favorable technologies for land use impacts; however, they have intense primary energy requirements, chemical use in the processes, and emissions from their waste treatment systems. Our results provide information for decision makers when planning for sustainable use of oil palm biomass.     

Biofuels and their by-products: Global economic and environmental implications

Recently a number of papers have used general equilibrium models to study the economy-wide and environmental consequences of the first generation of biofuels (FGB). In this paper, we argue that nearly all of these studies have overstated the impacts of FGB on global agricultural and land markets due to the fact that they have ignored the role of biofuel by-products. Feed by-products of FGB, such as dried distillers grains with solubles (DDGS) and oilseed meals (VOBP), are used in the livestock industry as protein and energy sources. Their presence mitigates the price impacts of biofuel production. More importantly, they reduce the demand for cropland and moderate the indirect land use consequences of FGB.This paper explicitly introduces DDGS and VOBP into a global computational general equilibrium (CGE) model, developed at the Center for Global Trade Analysis at Purdue University, to examine the economic and environmental impacts of regional and international mandate policies designed to stimulate bioenergy production and use. We show that models with and without by-products reveal different portraits of the economic impacts of the US and EU biofuel mandates for the world economy in 2015. While both models demonstrate significant changes in the agricultural production pattern across the world, the model with by-products shows smaller changes in the production of cereal grains and larger changes for oilseeds products in the US and EU, and the reverse for Brazil. Models that omit by-products are found to overstate cropland conversion from US and EU mandates by about 27%.     

The REFUEL EU road map for biofuels in transport: Application of the project's tools to some short-term policy issues

The current hot debate on biofuels calls for a balanced and realistic long-term strategy for biofuels. The REFUEL project provides several ingredients for such a strategy. Analyses in this project indicate that domestically produced biofuels can cover a significant share of EU fuel demand in the coming decades, with the EU-12 new member states and Ukraine as most promising regions. This potential can be realised with residual streams and on existing agricultural land, without conversion of e.g. nature reserves. Second generation biofuels are essential for the long-term success of biofuels due to their superior performance in many ways. But generally, the key challenge for the near future would be how to enhance the development of biofuels in a responsible way, i.e. stimulating the production chains with the best performance, and preventing negative impacts e.g., by paying careful attention to possible system impacts of biofuel production such as indirect land use changes and rising food prices. Finally, 2nd generation biofuels require specific policy: the precursor role of 1st generation is overrated, both in technical terms as well as in their role as market precursors. When it comes to synergies, 2nd generation biofuels might benefit more from other developments in the energy sector, such as initiatives in co-firing of biomass for (heat and) power, than from 1st generation biofuels, also because of the public resistance that the latter induce.     

Direct and indirect land use changes issues in European sustainability initiatives: State-of-the-art, open issues and future developments

Facing climate change and growing energy prices, the use of bioenergy is continuously increasing in order to diminish greenhouse gas emissions, secure energy supply and create employment in rural areas. Because the production of biomass or biofuels, wherever it takes place, comes along with externalities, positive or negative, the need for biomass and bioenergy sustainability criteria is more than ever felt. Research on sustainability criteria and certification systems has started through several national and international initiatives. Considering the benefits of an increased use of bioenergy but also the urge for limiting potential negative environmental and socio-economic impacts, the aim of these initiatives was to make the first move regarding bioenergy sustainability, while waiting for the European legislation to regulate this crucial issue. Land use changes, whether direct or indirect, are one of the most important consequences of bioenergy production. While direct land use changes are more easily assessed locally, indirect land use changes exceed the company level and need to be considered at a global scale. Methodologies for dealing with direct and indirect land use changes are proposed among others in the European, Dutch, British and German sustainability initiatives. This paper aims at presenting and comparing those four European initiatives, with a focus on their propositions for direct and indirect land use changes assessment. Key issues are discussed and recommendations are made for steps to overcome identified difficulties in accurately assessing the effects of indirect land use change due to bioenergy production.     

The emerging liquid biofuel market in Argentina: Implications for domestic demand and international trade

While the world's transport energy matrix is still strongly linked to limited and heavily polluting fossil fuels, new markets are appearing for the production and use of alternative transport fuels, such as liquid biofuels. Due to an interconnected global economy, such markets today are developing on a global scale with actors looking to meet local as well as potential international demand. The aim of this paper is to describe and evaluate the emergence of markets for liquid biofuels in Argentina. It reveals that biodiesel production for international supply is likely to emerge in the short run (up to 2010), giving the opportunity to be switched back to local supply in the medium run (post-2010). It also suggests that a bioethanol market (demand and supply) does not seem to be likely in the short run, and it is highly uncertain in the medium run as the most influential actors oppose its development. On the other hand, the current constellations of the biodiesel market appear to leave many uncertainties regarding its sustainability, especially in regard to a limited role of small and medium sized enterprises, and a suitable and diversified biodiesel feedstock. Currently, the focus lies solely on (very) large-scale production of biodiesel derived from soybean oil for the export market.     

Biofuels from microalgae—A review of technologies for production,processing, and extractions of biofuels and co-products

Sustainability is a key principle in natural resource management, and it involves operational efficiency, minimisation of environmental impact and socio-economic considerations; all of which are interdependent. It has become increasingly obvious that continued reliance on fossil fuel energy resources is unsustainable, owing to both depleting world reserves and the green house gas emissions associated with their use. Therefore, there are vigorous research initiatives aimed at developing alternative renewable and potentially carbon neutral solid, liquid and gaseous biofuels as alternative energy resources. However, alternate energy resources akin to first generation biofuels derived from terrestrial crops such as sugarcane, sugar beet, maize and rapeseed place an enormous strain on world food markets, contribute to water shortages and precipitate the destruction of the world's forests. Second generation biofuels derived from lignocellulosic agriculture and forest residues and from non-food crop feedstocks address some of the above problems; however there is concern over competing land use or required land use changes. Therefore, based on current knowledge and technology projections, third generation biofuels specifically derived from microalgae are considered to be a technically viable alternative energy resource that is devoid of the major drawbacks associated with first and second generation biofuels. Microalgae are photosynthetic microorganisms with simple growing requirements (light, sugars, CO₂, N, P, and K) that can produce lipids, proteins and carbohydrates in large amounts over short periods of time. These products can be processed into both biofuels and valuable co-products.This study reviewed the technologies underpinning microalgae-to-biofuels systems, focusing on the biomass production, harvesting, conversion technologies, and the extraction of useful co-products. It also reviewed the synergistic coupling of microalgae propagation with carbon sequestration and wastewater treatment potential for mitigation of environmental impacts associated with energy conversion and utilisation. It was found that, whereas there are outstanding issues related to photosynthetic efficiencies and biomass output, microalgae-derived biofuels could progressively substitute a significant proportion of the fossil fuels required to meet the growing energy demand.