Investments into forest biorefineries under different price and policy structures

Increasing scarcity of oil reserves and the high CO₂ emissions from using oil have contributed to the development of renewable biofuels. Pulp and paper mill integrated forest biorefineries offer one important means to increase biofuel production. This study analyzes the effects of policies to support biofuel production in the pulp and paper sector. We study the relative effectiveness of three biofuel supporting policy instruments, namely production subsidy, input subsidy and investment subsidy. We present a partial equilibrium pulp and paper market model with a biorefinery investment option. A numerical model is used to evaluate the impacts of policy instruments on wood prices, as well as input choices and investment strategies of pulp and paper industries. The data represent the Finnish pulp and paper sector. We evaluate the values and direct costs of the policy instruments in a situation of exogenous biofuel production targets. The direct costs of input and investment subsidies are higher than those of a production subsidy. With all the policy instruments, Finnish pulp and paper mills would invest in wood-gasifying technology, instead of black liquor based one. The number of biorefinery units is dependent on the subsidy type — investment and input subsidies are likely to result in more numerous but smaller biofuel production units than a production subsidy. With all the policy instruments the demand for wood increases in Finland leading to higher wood prices. This, in turn, could reflect negatively on the profitability of the pulp and paper industries. To a significant degree, the model and the results can be generalized to other countries and markets where integrated pulp and paper mills are operating.     

The net cost of biofuels in Thailand—An economic analysis

Biofuels are expected to represent a growing portion of liquid fuel consumption in Thailand due to environmental and social considerations in conjunction with policy goals supporting their domestic production and consumption. This paper reviews the economic costs associated with biofuel policy implementation in Thailand in the short term target year of 2011. Internal (production) and external (environmental, social, etc.) costs and benefits are evaluated, and, where possible, monetized. Domestic production of biofuel is calculated to be 9.5 billion THB (317 million USD) more expensive than importing the equivalent amount of petroleum. The environmental benefits from GHG savings as well as losses due to increased ground level ozone formation and government expenditure to support the biofuel industry yield a total “net cost” of 8.6 billion THB or 121 THB (4.04 USD) per capita for the year 2011. This result is contextualized with the (non-monetized) consideration that although biofuels are somewhat more expensive in the short term, their domestic production allows virtually all of the money to stay within the Thai economy as opposed to being sent abroad. This fact, coupled with significant uncertainty in future petroleum prices, could strongly influence the direction of Thai policy with respect to biofuels.     

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 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.     

Promoting biofuels: Implications for developing countries

Interest in biofuels is growing worldwide as concerns about the security of energy supply and climate change are moving into the focus of policy makers. With the exception of bioethanol from Brazil, however, production costs of biofuels are typically much higher than those of fossil fuels. As a result, promotion measures such as tax exemptions or blending quotas are indispensable for ascertaining substantial biofuel demand. With particular focus on developing countries, this paper discusses the economic justification of biofuel promotion instruments and investigates their implications. Based on data from India and Tanzania, we find that substantial biofuel usage induces significant financial costs. Furthermore, acreage availability is a binding natural limitation that could also lead to conflicts with food production. Yet, if carefully implemented under the appropriate conditions, biofuel programs might present opportunities for certain developing countries.     

Biofuel production and implications for land use,food production and environment in India

There is a large interest in biofuels in India as a substitute to petroleum-based fuels, with a purpose of enhancing energy security and promoting rural development. India has announced an ambitious target of substituting 20% of fossil fuel consumption by biodiesel and bioethanol by 2017. India has announced a national biofuel policy and launched a large program to promote biofuel production, particularly on wastelands: its implications need to be studied intensively considering the fact that India is a large developing country with high population density and large rural population depending upon land for their livelihood. Another factor is that Indian economy is experiencing high growth rate, which may lead to enhanced demand for food, livestock products, timber, paper, etc., with implications for land use. Studies have shown that area under agriculture and forest has nearly stabilized over the past 2–3 decades. This paper presents an assessment of the implications of projected large-scale biofuel production on land available for food production, water, biodiversity, rural development and GHG emissions. The assessment will be largely focused on first generation biofuel crops, since the Indian program is currently dominated by these crops. Technological and policy options required for promoting sustainable biofuel production will be discussed.     

Econometric estimation of the petroleum products consumption in Nigeria: Assessing the premise for biofuels adoption

The promotion and adoption of biofuels in Nigeria must be predicated on sufficient capacity for absorbing biofuels produced from the increasing investments in biofuels plantations, plants and processing facilities. This paper assesses the socioeconomic and related premises for biofuels development in Nigeria by conducting an econometric estimation of the petroleum products consumption. The paper first estimates aggregated petroleum product consumption, and then assess the response to specific petroleum products in terms of consumption, market (population), electricity generation, installed electricity generation capacity, and GDP. The result shows that all the petroleum products contribute significantly and about equally to aggregate petroleum consumption. The high proportion of petrol (about 44 percent) as a percentage of the aggregate petroleum product consumption validates the push for implementing the E10 petrol-ethanol blending for Nigeria. The consumption of diesel is also significant. Diesel is another petroleum product for which D20 biofuel blending policy has been proposed. The increase in population and GDP, coupled with the poor electricity situation, will keep driving the consumption of petroleum products. As the population increases, and the country continues to struggle to match electricity generation with population growth, the petrol-ethanol and diesel-biodiesel blending policy must be pursued tenaciously to ensure a reduction in carbon emission in Nigeria.     

Comparison of options for utilization of a potential steam surplus at kraft pulp mills—Economic performance and CO2 emissions

This paper compares different energy‐related investment options that can be implemented in a kraft pulp mill with a potential steam surplus. The options investigated include lignin extraction, electricity production, capturing of CO₂ and black liquor gasification with production of electricity or biofuels, here DME. The investment options are compared with respect to annual net profit and global CO₂ emissions for different future energy market scenarios. A further analysis of how different parameters such as policy instruments and investment costs affect the different technologies also is included. The results show that, generally, for reasonable levels of biofuel support, the best economic performance among the studied technologies is achieved by extraction of lignin valued as oil. However, if the level of support for biofuels is high, black liquor gasification with DME production generally has the best economic performance among the studied options. All the investment options investigated decrease global CO₂ emissions significantly. Capturing and storing CO₂ from the recovery boiler flue gases result in the highest CO₂ emissions reduction and also is an economically attractive option in scenarios with a high CO₂ emissions charge. Copyright © 2012 John Wiley & Sons, Ltd.     

Prospects of using microalgae for biofuels production: Results of a Delphi study

Advanced biofuels, such as those obtained from microalgae, are widely accepted as better choices for achieving goals of incorporating renewables and non-food fuel sources into the transportation sector, and for overcoming land use issues due to biofuel crops. Main challenges are currently the feasibility of large-scale commercialization of microalgae biofuels, since there are still some technical problems to overcome (e.g. the high energy consumption associated with biomass processing) and the majority of economic and financial analyses are based on pilot-scale projects. Therefore, this article presents the results of a Delphi study aiming to identify the main obstacles and most critical issues affecting the potential of large-scale commercialization of microalgae biodiesel and its incorporation into the fuel market. According to the authors' knowledge, this is the first Delphi study with this objective. The respondents are worldwide market specialists in the survey themes that ranged from biofuels economics to their environmental sustainability. One of the key findings is that most of the experts believe that production of microalgae biofuels will achieve its full commercial scale until 2020, and that from 2021 till 2030 it could represent from 1% to 5% of the worldwide fuel consumption. The study results also showed that environmental issues are where expert opinion differs more.     

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.     

Imported palm oil for biofuels in the EU: Profitability,greenhouse gas emissions and social welfare effects

We examine the social desirability of renewable diesel production from imported palm oil in the EU when greenhouse gas emissions are taken into account. Using a partial market equilibrium model, we also study the sectoral social welfare effects of a biofuel policy consisting of a blend mandate in a small EU country (Finland), when palm oil based diesel is used to meet the mandated quota for biofuels. We develop a market equilibrium model for three cases: i) no biofuel policy, ii) biofuel policy consisting of socially optimal emission-based biofuel tax credit and iii) actual EU biofuel policy. Our results for the EU biofuel market, Southeast Asia and Finland show very little evidence that a large scale use of imported palm oil in diesel production in the EU can be justified by lower greenhouse gas emission costs. Cuts in emission costs may justify extensive production only if low or negative land-use change emissions result from oil palm cultivation and if the estimated per unit social costs of emissions are high. In contrast, the actual biofuel policies in the EU encourage the production of palm oil based diesel. Our results indicate that the sectoral social welfare effects of the actual biofuel policy in Finland may be negative and that if emissions decrease under actual biofuel policy, the emission abatement costs can be high regardless of the land use change emissions.     

Biofuel cell nanodevices

Looking at the past decades, intense efforts have been made on one of the flourishing technology called biofuel cells with respect to the power or energy crisis prevailing all over the globe. Global researchers are taking part in the development of biofuels cells by exploiting novel characteristics of unconventional materials at atomic and molecule level like nanotubes (carbon nanotubes), nanosheets, nanoparticles, conducting polymers, etc in order to generate effective electricity from the substrates of biological origin via utilizing various biocatalysts. With the advancement in the field of nanotechnology, significant discoveries with respect to the field of biofuel cells have been accomplished. But till date, there has been a significant challenge regarding the performance and efficiency of the biofuels cells. Nowadays, to generate high power, an efficient and skillful approach which consists of the implementation of nano-based materials and conducting polymers with respect to the assembly of the biofuel cells is being considered by many researchers. Bioenergy and biofuels is a potential contestant for alternative fuel and with regard to this nanotechnology is one such significant weapon to synthesize and modify the production of biofuel and bio-energy. It has been assumed that in the near future with such extensive research biofuel cells will take up the economy of a nation in a sustainable way. This review gives the insights of biofuel cells and their types, brief synopsis of applications of the biofuel cells along with the scrutiny of biofuel cells in the market. Significant discussions have been provided in this review relating to the nanomaterials being employed as an electrode in biofuel cells. Certain examples have been mentioned to justify the concept of biofuel cell nanodevices following the ethical considerations of the same.     

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.     

Biofuel subsidies versus the gas tax: The carrot or the stick?

This paper provides an analytical framework to examine the relative efficiencies of a revenue-neutral biofuel subsidy and a gas tax in the presence of pre-existing distortions and growing substitutability between fuels. Both policies are set to achieve a targeted reduction in gasoline use at the state level. The model is then calibrated for a small open economy such as Illinois which is one of the largest producers of biofuels such as ethanol in the U.S. The main result of the paper shows that raising the biofuel subsidy use reduces overall welfare by more than a higher gas tax, both aimed to achieve a targeted reduction in pure gasoline. The relative efficiency of the higher gas tax is primarily due to it exacerbating the pre-existing distortion in the biofuel market by less than the subsidy. Moreover, for current parameter estimates welfare improving policy combinations for achieving a targeted amount of energy security are higher gas taxes combined with lower biofuel subsidies and a lower tax on income. However, the preference for a gasoline–labor tax swap shrinks as the elasticity of substitution between the two fuels rises.     

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.     

Policies to support renewable energies in the heat market

Whereas the contribution from renewable energies in the electrical power market is increasing rapidly, similar progress in the heat market is yet to be made. A prerequisite for progress is the development of innovative support instruments that transcend the usual support through public subsidies or tax reductions. We present an overview of the various classes of possible instruments. Some particularly interesting instruments will be selected and evaluated, comparing them qualitatively and quantitatively for the case of Germany. The most favourable model is found to be a new, allocation-financed¹ model known as the Bonus Model. This model will be described in more detail.     

Biofuels: Environment,technology and food security

The imminent decline of the world's oil production, its high market prices and environmental impacts have made the production of biofuels to reach unprecedent volumes over the last 10 years. This is why there have been intense debates among international organizations and political leaders in order to discuss the impacts of the biofuel use intensification.Besides assessing the causes of the rise in the demand and production of biofuels, this paper also shows the state of the art of their world's current production. It is also discussed different vegetable raw materials sources and technological paths to produce biofuels, as well as issues regarding production cost and the relation of their economic feasibility with oil international prices. 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.     

State-of-the-art in bioresources for sustainable transportation

Achieving circularity in the transportation sector is the strongest need of the hour and one of the pathways to achieve this is by embracing sustainable bio-energy resources. Considering this need, we investigated and reviewed the state-of-the-art readiness of the current bioresources i.e., biofuels. We provide a fresh overview of various biofuels (bioethanol, biohydrogen, biodiesel) production pathways followed by the landscape of current global production and consumption. In these discussions, we alluded to the prospects of algae-derived biofuels together with the techno-commercial aspects of biofuels toward achieving competitiveness in costs, technology and system design. The review also discussed the limitations of existing batteries over biofuel cell technology in terms of vehicle weight, storage capacity, cost and greenhouse pollution. Next, we discussed the advancement in biofuel cells (BFCs) and the challenges to the successful implantation of biofuel cells in the automotive sector. The development of a new e-biofuel cell system infrastructure was also elaborated to reduce the existing BFCs current problems and their environmental-economical sustainability was discussed. The review concluded by summarizing the current market scenario, global forecast for green energy resources and future directions in the area.     

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.