Welfare implications of the renewable fuel standard with an integrated tax-subsidy policy

This paper derives the optimal integrated tax-subsidy policy where one input is taxed and revenues are used to subsidize the use of a substitute input to reduce greenhouse gas emissions given the existing policies under the Renewable Fuel Standard policies. We measure the welfare effects and impact on cellulosic ethanol production after implementing the tax-subsidy policy using a general equilibrium model. A revenue-neutral integrated tax-subsidy scheme leads to a small positive tax rate for crude oil and a large positive subsidy for cellulosic ethanol because the former has a larger emissions coefficient than the latter. The overall welfare effects of an integrated tax subsidy scheme are less than a 1% increase for the economy but the growth in the cellulosic ethanol industry could range from 28% to 238% because the revenues from taxing crude oil are directly used to subsidize cellulosic ethanol production.     

Biofuels and their potential to aid the UK towards achieving emissions reduction policy targets

The potential of biofuels contributing to the UK emission reduction targets in the formulated UK Low Carbon Transition Plan (LCTP) and the UK’s obligation in the wider EU emissions reduction targets are assessed using four scenarios. The scenarios were evaluated using hybrid lifecycle assessment developed in a multi-regional input–output (MRIO) framework. In the hybrid MRIO LCA framework, technology-specific processes in the biofuels and fossil fuels LCA systems are integrated into a generalised 2-region (UK and Rest of the World) environmental-economic input–output framework in order to account for economy-wide indirect GHG emissions in the biofuels and fossil fuels LCA systems in addition to other indirect impacts such as indirect land use change. The lifecycle greenhouse gas emissions of biodiesel (soybean, palm, rape, waste cooking oil) and bio-ethanol (sugarcane, sugarbeet, corn) were assessed and compared to fossil fuel (diesel and petrol) baseline. From one of the scenarios, biodiesel production from waste cooking oil and bioethanol from sugarbeet offer the biggest potential for emissions savings relative to fossil fuel equivalent and offering a maximum emission savings of 4.1% observed with a biofuel market share of 10% reached in 2020. It was also established that under current biofuel feedstock mix, to achieve the 6% emissions saving primarily from biofuels as proposed in the LCTP, 23.8% of the transport fuels market would be required to be held by biofuels by 2020.     

Environmental and economic feasibility of palm oil biodiesel in the Mexican transportation sector

This study analyses the environmental and economic feasibility of producing palm oil-based biodiesel in Mexico in order to substitute of diesel fuel consumption using B5 until 2015 and B10 from 2016 to 2031 in the transportation sector. Two scenarios were created by projecting demand and costs for biodiesel as well as greenhouse gases emissions reduction over the next 26 years. In the environmental section, avoided emissions of Particulate matter, Total Hydrocarbons, Carbon Monoxide, Sulphur Dioxide, and Carbon Dioxide as well as the increase in Nitrous Oxide emissions were estimated for each scenario. In the economic section, a cost–benefit analysis of biodiesel substitution was implemented, and mitigation costs of Carbon Dioxide were estimated. Our results show that the feasibility of palm oil biodiesel use is directly related to the implementation of fiscal incentives, such as the exemption from tax (Special Tax on Production and Services).     

Second generation biofuels: Economics and policies

This study reviews economics of production of second generation biofuels from various feedstocks, including crop and wood/forestry residues, lignocellulosic energy crops, jatropha, and algae. The study indicates that while second generation biofuels could significantly contribute to the future energy supply mix, cost is a major barrier to its commercial production in the near to medium term. Depending upon type of biofuels, feedstock prices and conversion costs, the cost of cellulosic ethanol is found to be two to three times higher than the current price of gasoline on an energy equivalent basis. The median cost (across the studies reviewed) of biodiesel produced from microalgae, a prospective feedstock, is seven times higher than the current price of diesel, although much higher cost estimates have been reported. As compared with the case of first generation biofuels, in which feedstock can account for over two-thirds of the total costs, the share of feedstock in the total costs is relatively lower (30–50%) in the case of second generation biofuels. While significant cost reductions are needed for both types of second generation biofuels, the critical barriers are at different steps of the production process. For cellulosic ethanol, the biomass conversion costs needs to be reduced. On the other hand, feedstock cost is the main issue for biodiesel. At present, policy instruments, such as fiscal incentives and consumption mandates have in general not differentiated between the first and second generation biofuels except in the cases of the US and EU. The policy regime should be revised to account for the relative merits of different types of biofuels.     

Implications of local lifecycle analyses and low carbon fuel standard design on gasohol transportation fuels

State and regional policies, such as low carbon fuel standards (LCFSs), increasingly mandate that transportation fuels be examined according to their greenhouse gas (GHG) emissions. We investigate whether such policies benefit from determining fuel carbon intensities (FCIs) locally to account for variations in fuel production and to stimulate improvements in FCI. In this study, we examine the FCI of transportation fuels on a lifecycle basis within a specific state, Minnesota, and compare the results to FCIs using national averages. Using data compiled from 18 refineries over an 11-year period, we find that ethanol production is highly variable, resulting in a 42% difference between carbon intensities. Historical data suggests that lower FCIs are possible through incremental improvements in refining efficiency and the use of biomass for processing heat. Stochastic modeling of the corn ethanol FCI shows that gains in certainty due to knowledge of specific refinery inputs are overwhelmed by uncertainty in parameters external to the refiner, including impacts of fertilization and land use change. The LCA results are incorporated into multiple policy scenarios to demonstrate the effect of policy configurations on the use of alternative fuels. These results provide a contrast between volumetric mandates and LCFSs.     

第二代和第三代生物燃料发展现状及启示

第二代生物乙醇以生物质为原料,包括纤维素乙醇和纤维素生物汽油两种产品。目前已建有示范装置和/或工业装置的纤维素乙醇生产技术包括硫酸/酶水解-发酵技术、硫酸水解-发酵技术、酸水解-发酵-酯化-加氢技术、酶水解-发酵技术。业内专家认为,用酶替代硫酸水解是纤维素乙醇生产的发展方向。目前已经和准备进行示范装置试验的纤维素生物汽油生产技术包括快速热解-加氢改质技术和BioForming技术。第二代生物柴油主要以动植物油脂为原料,通过催化加氢生产非脂肪酸甲酯生物柴油,它是理想的优质柴油调合组分。生产第二代生物柴油的加氢技术包括加氢脱氧、回收丙烷和其他轻烃气体、脱水、异构化和裂化、蒸馏等5个步骤,主要有NExBTL可再生柴油生产技术、Ecofining绿色柴油生产技术、Haldor Topsoe可再生柴油生产技术、EERC可再生柴油生产技术。第三代生物燃料有两种:一种是以海藻油为原料生产乙醇、丁醇、喷气燃料和柴油,海藻培养(生长)和萃取海藻油是核心步骤,目前尚处于初期阶段;另一种是以生物质原料通过气化合成生产汽油、喷气燃料和柴油,重点是开发生物质气化技术,降低生产成本。我国应借鉴国外发展第二代和第三代生物燃料的做法,把技术开发工作做深做细做透,搞清楚原料的供应情况;目前我国生物柴油主要采用酯交换法生产脂肪酸甲酯,应考虑开发和采用加氢法生产第二代生物柴油,并努力扩大除麻风果油以外的原料来源;同时应加大海藻生物燃料和生物质气化合成生物燃料的开发力度。     

Economic feasibility of algal biodiesel under alternative public policies

The motivation for this research was to determine the influence of public policies on economic feasibility of producing algal biodiesel in a system that produced all its energy needs internally. To achieve this, a steady-state mass balance/unit operation system was modeled first. Open raceway technology was assumed for the production of algal feedstock, and the residual biomass after oil extraction was assumed fermented to produce ethanol for the transesterification process. The project assumed the production of 50 million gallons of biodiesel per year and using about 14% of the diesel output to supplement internal energy requirements. It sold the remainder biodiesel and ethanol as pure biofuels to maximize the rents from the renewable fuel standards quota system. Assuming a peak daily yield of 500 kg algal biomass (dry basis)/ha, the results show that production of algal biodiesel under the foregoing constraints is only economically feasible with direct and indirect public policy intervention. For example, the renewable fuel standards' tracking RIN (Renewable fuel Identification Number) system provides a treasury-neutral value for biofuel producers as does the reinstatement of the renewable fuel tax credit. Additionally, the capital costs of an integrated system are such that some form of capital cost grant from the government would support the economic feasibility of the algal biodiesel production.     

Importance of biodiesel as transportation fuel

The scarcity of known petroleum reserves will make renewable energy resources more attractive. The most feasible way to meet this growing demand is by utilizing alternative fuels. Biodiesel is defined as the monoalkyl esters of vegetable oils or animal fats. Biodiesel is the best candidate for diesel fuels in diesel engines. The biggest advantage that biodiesel has over gasoline and petroleum diesel is its environmental friendliness. Biodiesel burns similar to petroleum diesel as it concerns regulated pollutants. On the other hand, biodiesel probably has better efficiency than gasoline. One such fuel for compression-ignition engines that exhibit great potential is biodiesel. Diesel fuel can also be replaced by biodiesel made from vegetable oils. Biodiesel is now mainly being produced from soybean, rapeseed and palm oils. The higher heating values (HHVs) of biodiesels are relatively high. The HHVs of biodiesels (39–41 MJ/kg) are slightly lower than that of gasoline (46 MJ/kg), petrodiesel (43 MJ/kg) or petroleum (42 MJ/kg), but higher than coal (32–37 MJ/kg). Biodiesel has over double the price of petrodiesel. The major economic factor to consider for input costs of biodiesel production is the feedstock, which is about 80% of the total operating cost. The high price of biodiesel is in large part due to the high price of the feedstock. Economic benefits of a biodiesel industry would include value added to the feedstock, an increased number of rural manufacturing jobs, an increased income taxes and investments in plant and equipment. The production and utilization of biodiesel is facilitated firstly through the agricultural policy of subsidizing the cultivation of non-food crops. Secondly, biodiesel is exempt from the oil tax. The European Union accounted for nearly 89% of all biodiesel production worldwide in 2005. By 2010, the United States is expected to become the world's largest single biodiesel market, accounting for roughly 18% of world biodiesel consumption, followed by Germany.     

Life cycle assessment of flax shives derived second generation ethanol fueled automobiles in Spain

Biofuel use seems to have certain environmental, energy and socioeconomic advantages versus fossil fuel consumption. The substitution of fossil fuels with biofuels can be a useful tool to fulfil the Spanish and European policy in relation to mitigation of greenhouse gas (GHG) emissions and increase the security in energy supply. The continuous increase in energy consumption, dependence on energy and high petroleum prices has motivated increasing support for renewable energy promotion. In Spain (the third ethanol producer in Europe in 2007), ethanol from lignocellulosic feedstocks could be one of the most valuable and interesting possibilities for renewable transportation fuels due to the limited competition with food production and high net reduction of GHG emissions. This study is focused on flax shives, obtained as an agricultural co-product from flax crops dedicated to fibre production for specialty paper pulp manufacture as lignocellulosic biomass to produce second generation ethanol involving the use of cellulosic technology. The life cycle assessment (LCA) methodology was used to evaluate the environmental impacts of the production and use in a flexi fuel vehicle (FFV) of ethanol blends (10 and 85% in volume of ethanol with gasoline) versus conventional gasoline, throughout their whole life cycle in order to highlight the main sources of these impacts. The system boundaries include cultivation, extraction, processing and final use of fuels. Mass and economic allocation were considered to determine the effect on the results of different allocation approaches.The results of the study show that the allocation methods are essential for outcomes and decision-making. Using ethanol as transportation fuel could present better environmental performance than conventional gasoline in terms of global warming and fossil fuel consumption according to mass allocation. However, environmental credits could be achieved in terms of acidification, fossil fuel consumption and human toxicity according to economic allocation. Contributions to other impact categories such as eutrophication and photochemical oxidants formation were lower for conventional gasoline regardless of the allocation procedure selected. Agricultural activities related to feedstock production are notable contributors to the environmental performance. Thus, high yielding varieties, reduction of tillage activities and reduction in fertilization should help to reduce these impacts.     

Woody biomass availability for bioethanol conversion in Mississippi

This study evaluated woody biomass from logging residues, small-diameter trees, mill residues, and urban waste as a feedstock for cellulosic ethanol conversion in Mississippi. The focus on Mississippi was to assess in-state regional variations and provide specific information of biomass estimates for those facilities interested in locating in Mississippi. Supply and cost of four woody biomass sources were derived from Forest Inventory Analysis (FIA) information, a recent forest inventory conducted by the Mississippi Institute for Forest Inventory, and primary production costs. According to our analysis, about 4.0 million dry tons of woody biomass are available for production of up to 1.2 billion liters of ethanol each year in Mississippi. The feedstock consists of 69% logging residues, 21% small-diameter trees, 7% urban waste, and 3% mill residues. Of the total, 3.1 million dry tons (930 million liters of ethanol) can be produced for $34 dry ton^?1 or less. Woody biomass from small-diameter trees is more expensive than other sources of biomass. Transportation costs accounted for the majority of total production costs. A sensitivity analysis indicates that the largest impacts in production costs of ethanol come from stumpage price of woody biomass and technological efficiency. These results provide a valuable decision support tool for resource managers and industries in identifying parameters that affect resource magnitude, type, and location of woody biomass feedstocks in Mississippi.     

Investigating pellet charring and temperature in ultrasonic vibration-assisted pelleting of wheat straw for cellulosic biofuel manufacturing

Biofuels are only alternative solution for liquid transportation fuels among different kinds of renewable energy. To avoid the competition with the food, cellulosic biomass has been proposed as feedstock for manufacturing of cellulosic biofuels. Costs associated with collection, transportation, and storage of cellulosic biomass account for more than 80% cost of the feedstock. By processing cellulosic biomass into high density pellets, handling efficiency of cellulosic feedstocks can be improved, leading to costs reduction in transportation and storage. Ultrasonic vibration-assisted (UV-A) pelleting is a recently developed pelleting method, which can not only produce higher density but also break the lignin shell, to some extent, to increase cellulose accessibility and then increase sugar and biofuel yield. The reported investigations on UV-A pelleting provided little information about the relationship between charring and pelleting temperature under different input variables of pelleting. In this paper, effects of different input variables of pelleting on both charring ratio and pelleting temperature were studied. This paper, for the first time, reported the relationship between charring ratio and pelleting temperature. The obtained results will be helpful in understanding the mechanism of UV-A pelleting and providing guide to control pellet charring for a higher biofuel yield.     

Cost-effective CO2 emission reduction through heat,power and biofuel production from woody biomass: A spatially explicit comparison of conversion technologies

Bioenergy is regarded as cost-effective option to reduce CO₂ emissions from fossil fuel combustion. Among newly developed biomass conversion technologies are biomass integrated gas combined cycle plants (BIGCC) as well as ethanol and methanol production based on woody biomass feedstock. Furthermore, bioenergy systems with carbon capture and storage (BECS) may allow negative CO₂ emissions in the future. It is still not clear which woody biomass conversion technology reduces fossil CO₂ emissions at least costs. This article presents a spatial explicit optimization model that assesses new biomass conversion technologies for fuel, heat and power production and compares them with woody pellets for heat production in Austria. The spatial distributions of biomass supply and energy demand have significant impact on the total supply costs of alternative bioenergy systems and are therefore included in the modeling process. Many model parameters that describe new bioenergy technologies are uncertain, because some of the technologies are not commercially developed yet. Monte-Carlo simulations are used to analyze model parameter uncertainty. Model results show that heat production with pellets is to be preferred over BIGCC at low carbon prices while BECS is cost-effective to reduce CO₂ emissions at higher carbon prices. Fuel production – methanol as well as ethanol – reduces less CO₂ emissions and is therefore less cost-effective in reducing CO₂ emissions.     

Life cycle water use of low-carbon transport fuels

In society’s quest to mitigate climate change it is important to consider potential trade-offs in climate solutions impacting other environmental issues. This analysis explores the life cycle water consumption of alternative low-carbon energy sources for transportation. Energy sources analyzed include both biofuels used in internal combustion engines and low-carbon electricity generation methods used in conjunction with electric vehicles. Biofuels considered are corn-based ethanol, soybean biodiesel, cellulosic ethanol from switchgrass, and microbial biodiesel. Electricity sources analyzed are coal with carbon sequestration, photovoltaic cells, and solar concentrators. The assessment method used is hybrid life cycle assessment (LCA), which combines materials-based process method and the economic input–output (EIO) method. To compare these technologies on an even footing the life cycle water use to propel a passenger vehicle one mile is estimated. All technologies evaluated showed an increase in water consumption compared to unleaded gasoline when water use from vehicle manufacturing was included. Scale-up calculations showed that mass adoption of electric vehicles and some configurations of algae and switchgrass systems could potentially contribute to the decarbonization of transportation with tolerable increases in overall water consumption. Irrigated crop based biofuels however were found to have significant potential impact on water resources when scaled up to macroscopic production levels.     

Analyzing carbon pricing policies using a general equilibrium model with production parameters estimated using firm data

Policy simulation results of Computable General Equilibrium (CGE) models largely hinge on the choices of substitution elasticities among key input factors. Currently, most CGE models rely on the common elasticities estimated from aggregated data, such as the GTAP model elasticity parameters. Using firm level data, we apply the control function method to estimate CES production functions with capital, labor and energy inputs and find significant heterogeneity in substitution elasticities across different industries. Our capital-labor substitution elasticities are much lower than the GTAP values while our energy elasticities are higher. We then incorporate these estimated elasticities into a CGE model to simulate China's carbon pricing policies and compare with the results using GTAP parameters. Our less elastic K-L substitution leads to lower base case GDP growth, but our more elastic energy substitution lead to lower coal use and carbon emissions. In the carbon tax policy exercises, we find that our elasticities lead to easier reductions in coal use and carbon emissions.     

Trading greenhouse gas emission benefits from biofuel use in US transportation: Challenges and opportunities

Replacing petroleum fuels with biofuels such as ethanol and biodiesel has been shown to reduce greenhouse gas (GHG) emissions. These GHG benefits can potentially be traded in the fledgling carbon markets, and methodologies for quantifying and trading are still being developed. We review the main challenges in developing such carbon trading frameworks and outline a proposed framework for the US, the main features of which include, lifecycle assessment of GHG benefits, a combination of project-specific and standard performance measures, and assigning GHG property rights to biofuel producers. At carbon prices of 10 $ t⁻¹, estimated monetary benefits from such trading can be 4.5 M$ hm⁻³ and 17 M$ hm⁻³ of corn ethanol and cellulosic ethanol respectively.     

Economics of co-firing coal and biomass: An application to Western Canada

Co-firing biomass and coal in retrofitted power plants is an efficient means to reduce carbon dioxide emissions in the energy sector. Under IPCC reporting rules, the impacts of energy produced from biomass would not be reported in the energy sector, thereby effectively lowering the emission intensity of a power plant. In this study, a carbon tax is compared to a feed-in tariff for incentivizing conversion of coal plants to co-fire with biomass. In the application, a model of the Alberta electrical grid with an intertie to British Columbia is linked to a fiber transportation model for these provinces. Results indicate that there is an upper threshold on a carbon tax after which retrofitting of coal plants is less efficient than increasing natural gas generating capacity. This is not the case with a feed-in tariff as it specifically targets biomass energy. Although the optimal generating mix achieved with a carbon tax leads to lower aggregate emissions than the mix achieved using a feed-in tariff, it will result in higher average generating costs. Results indicate that it is optimal for Alberta to retrofit approximately 500 MW of current coal capacity (8.6%) to co-fire with biomass, although Alberta wood pellet production acts as a constraint on further conversions.     

Increasing biomass utilisation in energy systems: A comparative study of CO2 reduction and cost for different bioenergy processing options

Emissions of greenhouse gases, such as CO₂, need to be greatly reduced to avoid the risk of a harmful climate change. One powerful way to mitigate emissions is to switch fuels from fossil fuels to renewable energy, such as biomass. In this paper, we systematically investigate several bioenergy processing options, quantify the reduction rate and calculate the specific cost of reduction. This paper addresses the issue of which option Sweden should concentrate on to achieve the largest CO₂ reduction at the lowest cost. The results show that the largest and most long-term sustainable CO₂ reduction would be achieved by refining the woody biomass to fuel pellets for coal substitution, which have been done in Sweden. Refining to motor fuels, such as methanol, DME and ethanol, gives only half of the reduction and furthermore at a higher specific cost. Biomass refining into pellets enables transportation over long distances and seasonal storage, which is crucial for further utilisation of the woody biomass potential.     

Impacts of facility size and location decisions on ethanol production cost

Cellulosic ethanol has been identified as a promising alternative to fossil fuels to provide energy for the transportation sector. One of the obstacles cellulosic ethanol must overcome in order to contribute to transportation energy demand is the infrastructure required to produce and distribute the fuel. Given a nascent cellulosic ethanol industry, locating cellulosic ethanol refineries and creating the accompanying infrastructure is essentially a greenfield problem that may benefit greatly from quantitative analysis. This study models cellulosic ethanol infrastructure investment using a mixed integer program (MIP) that locates ethanol refineries and connects these refineries to the biomass supplies and ethanol demands in a way that minimizes the total cost. For the single- and multi-state regions examined in this study, larger facilities can decrease ethanol costs by $0.20–0.30 per gallon, and placing these facilities in locations that minimize feedstock and product transportation costs can decrease ethanol costs by up to $0.25 per gallon compared to uninformed placement that could result from influences such as local subsidies to encourage economic development. To best benefit society, policies should allow for incentives that encourage these low-cost production scenarios and avoid politically motivated siting of plants.     

Integrated biomass energy systems and emissions of carbon dioxide

Electric Power Research Institute (EPRI) and the US Department of Energy (DOE) have been funding a number of case studies under the initiative entitled “Economic Development through Biomass Systems Integration”, with the objective of investigate the feasibility of integrated biomass energy systems, utilizing a dedicated feedstock supply system (DFSS) for energy production. This paper deals with the full fuel cycle for four of these case studies, which have been examined with regard to the emissions of carbon dioxide, CO₂. Although the conversion of biomass to electricity in itself does not emit more CO₂ than is captured by the biomass through photosynthesis, there will be some CO₂ emissions from the DFSS. External energy is required for the production and transportation of the biomass feedstock, and this energy is mainly based on fossil fuels. By using this input energy, CO₂ and other greenhouse gases are emitted. However, by utilizing biomass with fossil fuels as external input fuels, we would get about 10–15 times more electric energy per unit fossil fuel, compared with a 100% coal power system. By introducing a DFSS on former farmland the amount of energy spent for production of crops can be reduced, the amount of fertilizers can be decreased, the soil can be improved and a significant amount of energy will be produced compared with an ordinary farm crop. Compared with traditional coal-based electricity production, the CO₂ emissions are in most cases reduced significantly by as much as 95%. The important conclusion is the great potential for reducing greenhouse gas emissions through the offset of coal by biomass.     

Applying life-cycle assessment to low carbon fuel standards—How allocation choices influence carbon intensity for renewable transportation fuels

The Energy Independence and Security Act (EISA) of 2007 requires life-cycle assessment (LCA) for quantifying greenhouse gas emissions (GHGs) from expanded U.S. biofuel production. To qualify under the Renewable Fuel Standard, cellulosic ethanol and new corn ethanol must demonstrate 60% and 20% lower emissions than petroleum fuels, respectively. A combined corn-grain and corn-stover ethanol system could potentially satisfy a major portion of renewable fuel production goals. This work examines multiple LCA allocation procedures for a hypothetical system producing ethanol from both corn grain and corn stover. Allocation choice is known to strongly influence GHG emission results for corn-ethanol. Stover-derived ethanol production further complicates allocation practices because additional products result from the same corn production system. This study measures the carbon intensity of ethanol fuels against EISA limits using multiple allocation approaches. Allocation decisions are shown to be paramount. Under varying approaches, carbon intensity for corn ethanol was 36–79% that of gasoline, while carbon intensity for stover-derived ethanol was −10% to 44% that of gasoline. Producing corn-stover ethanol dramatically reduced carbon intensity for corn-grain ethanol, because substantially more ethanol is produced with only minor increases in emissions. Regulatory considerations for applying LCA are discussed.