The challenges to biofuel expansion

Global climate change and the need for clear rules regarding price formation in the global market are stumbling blocks, say specialists.

By Elton Alisson

Agência FAPESP – Recent resolutions by several countries, including the United States, to increase utilization of renewable fuels through 2021 – in addition to the general need to increase energy production and distribution worldwide – should boost global expansion of the biofuels industry in the coming years.

However, the sector must overcome myriad challenges to meet the greater global demand for bioenergy. These challenges include increasing cultivation of the agricultural crops that are utilized to generate biofuels without affecting food production; adapting to the impact of global climate change in agriculture; and competing on unequal footing with fossil fuels, which are strongly subsidized by innumerous countries, including Brazil.

These were some of the observations of researchers participating in the “Bioenergy and Sustainability: The Industry Perspective” workshop held at FASEP on November 18, 2013.

The meeting was in preparation for the Rapid Assessment Process regarding biofuels and sustainability that was held in December by researchers from FAPESP’s Bioenergy Research Program (BIOEN); the Characterization, Conservation, Recovery and Sustainable Use Research Program (BIOTA); and the Research Program on Global Climate Change in São Paulo (RPGCC).

The Rapid Assessment Process – conducted at the invitation of the Secretary of UNESCO’s Scientific Committee on Problems of the Environment – should result in a Policy summary containing a series of recommendations from academia, industry and governmental and nongovernmental institutions to support decision making about biofuels and sustainability by companies, governments and international institutions affiliated with the United Nations Organization.

“Keeping in mind that bioenergy production is expanding worldwide, the objective of the assessment is to contribute to recommendations for public policy that can stimulate biofuel production and eliminate some barriers to the advance of this industry globally,” Glaucia Mendes Souza, professor of the Chemistry Institute at Universidade de São Paulo (USP) and member of the BIOEN coordination team, said at the opening.

Ninety-five specialists in biofuels from 56 research institutions in 19 countries will participate in the study, which is expected to be published as an e-book in October 2014.

The main results of the study will also be published in a special edition of the Journal of Environmental Development and presented during the 2nd Brazilian Bioenergy Science and Technology Conference, which will be held in October 2014 in Campos do Jordão.

“The synthesis of knowledge about biofuels and sustainability that we produce will not be simply a revision of scientific literature or a tutorial about the topic,” Souza noted, adding “We intend to advance the discussion by approaching transversal issues related to biofuel production, such as food safety, energy, environment, climate, sustainable development and innovation.”

Energy demand

According to data obtained from the International Energy Agency (IEA) and presented by participating researchers, the demand for energy worldwide is projected to double in the coming decades, expanding from the current 500 exajoules (ej) to 1,000 exajoules in 2050.

However, the IEA notes that production of oil and gas – the sources of 60% of the world’s primary energy – should fall over the same period as the number of oil reserves shrinks and the cost of prospecting for and extracting oil and gas in new oil fields simultaneously increases.

Given this scenario and the need to meet growing energy demand worldwide, the IEA forecasts that by 2030 biofuels will account for 4% to 10% of the total energy utilized for the planet’s roadway transportation – depending on the introduction of second-generation ethanol production.

To this end, it will be necessary to utilize 3.8% to 4.5% of the arable land available worldwide for cultivating agricultural crops destined for the production of biofuels, compared with the 1% of the arable land available worldwide used at present for this purpose.

This expansion of biofuel production, however, should not compete with food production; worldwide demand for food will also increase over the next 40 years, according to researchers. “These numbers [referring to the potential participation of biofuels in the world’s energy grid] are still being discussed, but we are moving toward a consensus that the availability of arable land to grow crops focused on production of biofuels will not be a problem,” said Souza.

Since 2007, production of biofuels worldwide has increased 109%, noted researchers participating in the event.

The Organization for Economic Cooperation and Development and the United Nations Organization for the Food and Agriculture also project that bioethanol and biodiesel production worldwide can increase 60% in the coming years, leaping from current production levels of 149 billion liters to 222 billion liters by 2021.

According to specialists in the field, one of the reasons for this prediction is that 41 countries have announced decisions in recent years to pass laws that provide for increasing ethanol utilization in their vehicle fleets through 2021.

The United States, Goldemberg says, has stipulated that it will consume 79.8 billion liters more of the corn-derived fuel in 2021 than the 67 billion liters it currently utilizes. However, he added, U.S. legislation has established that this new supply should come from second-generation biofuels produced domestically.

Nonetheless, specialists in the field believe that this target will be difficult to achieve because of the industrial difficulties currently facing production of bioenergy obtained not only from the sucrose found in sugarcane – such as that of first-generation bioethanol – but also from sugar in the cellular walls of bagasse, leaves and other plant residue.

“If this this legislation is not changed, the United States will have to import this extra ethanol supply from some other producing country, affording an interesting opportunity for Brazil,” said José Goldemberg, professor in the Electrotechnic and Energy Institute at USP.

According to Goldemberg, it is estimated that Brazil will also utilize 24.2 billion liters more sugarcane-derived ethanol in 2021 than the 37.4 billion liters of biofuel it currently consumes annually.

Other countries also established targets for 2021, pursuant to which at least 10% of their total fuel should come from renewable fuels, which corresponds to an additional production of 34.8 billion liters of ethanol.

Goldemberg calculates, together, the additional ethanol production required to supply the United States, Brazil and other countries that established policies to increase biofuel consumption will total an additional 138 billion liters of ethanol in 2021. If this volume of ethanol were derived from sugarcane, he points out, some 25 million hectares of land would be required to grow the agricultural crops.

“There are several studies authored by Brazilian researchers indicating that it is possible to find this quantity of land in Brazil, particularly because of the improved efficiency in the Brazilian livestock industry, which is extremely efficient [in terms of pasture land use],” Goldemberg said.

“Brazilian livestock lives more comfortably than its counterparts around the world because each animal has roughly a hectare of pasture,” he comments.

Adverse conditions

Some of the most serious threats to expansion of biofuel production around the world are related to climate change and the lack of stable public policies that value and differentiate these renewable fuels and promote their adequate development, according to researchers participating in the event.

With respect to climate change, the gradual increase in global temperature and changes in rainfall levels observed in different regions of the world are likely to affect the agricultural crops utilized for biofuel production, such as sugarcane, corn, soybean, colza, beets and sunflower, warn studies recently published by researchers from the Brazilian Agriculture and Livestock Corporation (Embrapa) and other institutions.

“The growing areas of these agricultural crops should diminish because the rate at which climate changes are occurring is greater than the time that these species and socioeconomic systems of production would need to make a transition to a different climate standard from today’s,” said Paulo Artaxo, professor at USP’s Physics Institute, who also attended the workshop.

“Some of these agricultural crops are more sensible than others, and Brazil has to be attentive to this issue, which represents a major uncertainty for livestock,” he affirmed.

The lack of transparency in how fuel is priced on global markets and in public policies is affecting the financial sustainability of global sectors, say specialists.

According to data presented by Luiz Augusto Horta Nogueira, professor at Universidade Federal de Itajubá (Unifei), fossil fuels receive government subsidies of approximately US$ 440 billion per year around the world. By contrast, global investments to support renewable fuel production are currently US$ 100 million per year.

“Sugarcane ethanol has a series of environmental sustainability indicators and if commercialized in a minimally fair market with clear price formation rules, it would also have financial sustainability,” said Nogueira. “However,” he points out, “we cannot expect it to compete with fossil fuels such as gasoline, which receives subsidies of this magnitude.”