Some embrace it, others raise a dubious eyebrow. Some want to tax it, others say it needs more time to grow. Whichever way you look at it, the biofuels industry is making waves.
The United Nations’ Food and Agriculture Organisation says that by 2026 up to 25% of the world’s energy requirements will be fuelled by agricultural produce and waste.
With biofuel technology still in its infancy, this may seem a hefty prophecy, but many of the big players are already jumping on the biofuelled bandwagon.
Oil giants BP, Chevron and Shell are investing millions of dollars in research to improve the energy and production efficiency of biofuels. Earlier this month BP announced plans to spend $500 million over the next 10 years to establish a dedicated biosciences energy research laboratory.
In another landmark deal, BP and DuPont will partner to develop biobutanol, a next-generation biofuel set to take biofuel efficiency up a few notches. BP is also pumping $US9.4 million ($A12.8 million) into assessing the biofuel potential of jatropha, a drought-resistant oil-bearing non-edible shrub.
Chevron is also interested in biofuels research, working with the Georgia Institute of Technology on next-generation cellulosic biofuels and biofuel feedstocks. Chevron has also invested in Galveston Bay Biodiesel, a Houston-based company scheduled to complete construction of a biodiesel plant which will have the potential to double current biodiesel production in the US.
Chevron is tabled to spend $US400 million on alternative and renewable projects, up from about $US100 million a year over the past five years.
Shell is also out for its piece of the action, investing in a collaboration between biotechnology firm Iogen and the Volkswagon Group to build a demonstration cellulosic ethanol plant. It’s also working with biofuels manufacturer CHOREN Industries to build a commercial plant that will produce biodiesel “SunFuel” from wood chips and straw.
Yet, many say biofuel is not yet the golden child it’s made out to be.
“The jury’s still out a bit about whether there’s a significant net benefit,” Alan Bailey from Exxon Mobil said.
“You can’t produce biofuels without expending some energy, especially at the moment when they’re produced from crops. If you look at it on a cradle-to-grave basis there are very few biofuel sources that one would regard as significantly environmentally positive.”
Bailey said Exxon Mobil affiliates were marketing biodiesel in Europe and Brazil, where ethanol is mandated for use, but the company would primarily stick with oil and gas.
“We don’t see either of those energy resources running out any time soon,” he said.
“Long term our view is that conventional biofuels production from crops will find it difficult to compete economically. The best prospect would be to see whether you can develop new technology to make biofuels from waste material, the stalks and so on - so-called cellulosic conversion. Ultimately, if biofuels are going to be competitive there has to be something done in that area.”
And indeed most investment dollars are being directed to these next-generation celluosic biofuels. Where conventional ethanol is produced by fermenting crops such as corn, sugarcane, sorghum or soy, these new and improved biofuels are produced from cellulosic feedstocks such as sewage sludge, plant stalks and grasses.
This technology makes biofuel production much more competitive and also has the potential to further reduce overall CO2 emissions.
Another much-lauded alternative is biodiesel, produced by converting the triglycerides in vegetable and animal oils into highly oxygenated compounds. Biodiesel can be produced from oils including canola, soy, palm and coconut, as well as used cooking oils and animal fats produced during meat processing.
The energy content of biodiesel depends on the feedstock, but its energy content varies between 88% and 99% that of diesel.
Biodiesel has other advantages, including increased biodegradability, an attractive property for marine fuel use, a much higher flashpoint than petroleum diesel, making it safer for use in mining applications, and lubricant properties that are already seeing it included in many premium diesel blends.
Increasing pressure on oil reserves means biodiesel is becoming increasingly competitive, and it is now in commercial production in many countries including the US, Germany, Italy, France and the Czech Republic. Global consumption is up around three billion litres of biodiesel per annum, which is barely 1% of the market in the US alone.
In the ethanol market, China, India and Thailand are emerging as significant producers, and Brazilian consumers have been filling up with ethanol blends since the late 1970s.
In the US, UK, Brazil and Sweden you can also buy flexible fuel vehicles (FFVs), able to run on E10 to E85 blends as well as 100% petrol. E10 blends are available in Australia and can be used in ordinary engines without the need for modification.
In Australia the official government target for biofuel use by 2010 is 350 million litres, a volume that will replace around 0.75% of the nation's vehicle fuel use.
More than half of the Australian target will be provided by BP through tallow-derived biodiesel produced at its Bulwer refinery, wheat-derived ethanol purchased from a new plant planned for WA, and sugar-derived ethanol purchased from CSR’s Sarina distillery.
“We’ll be providing Australian consumers with over 200 million litres of biofuels per annum by 2008” Chandran Vigneswaran of BP Australia said.
“Over the last year and a half we’ve sold about 22 million litres of (ethanol blended fuel) E10, and the biofuels component of that is 2.2 million litres. We’re increasing what we’re doing by about 100-fold.”
Caltex Australia is also selling ethanol blended fuel in Australia, and recently signed a supply deal with the Dalby bio-refinery to take sorghum-derived ethanol after production starts in 2007.
Shell's 5% ethanol mix will become increasingly available and is already selling in Sydny, Melbourne, Brisbane and Canberra.
