What are advanced biofuels?

What are the advantages of advanced biofuels?

Advanced biofuels can be made from non-food sources of biomass including organic waste material, agricultural and forestry residues and energy crops which are grown specifically for energy.

What a waste…

Europeans generate around 1 billion tonnes per year of waste paper, food, agricultural residues and other biomaterials. About a quarter of this could be used for energy – roughly 225 million tonnes per year. That amount of material could theoretically produce roughly 54.8 billion litres of biofuels, equivalent to 14.5% of the expected demand for liquid fuels for road transport in 2030[2].

Estimating other possible sources of feedstocks for advanced biofuel production in Europe is based on a considerable number of assumptions. One estimate of suitable land that would be available by 2030 to produce dedicated energy crops would yield 110-151 billion litres of gasoline-equivalent biofuel per year[3].

Are advanced biofuels available today?

Worldwide there are at least seven commercial scale cellulosic advanced biofuel plants, which focus on non-food feedstocks, with a total capacity of more than 490 million litres per year. Many more are in the planning and construction stages largely outside of the EU.

However, as advanced biofuels are a relatively new technology, it will be some time before they can be produced at a cost low enough to be commercially available in significant volumes.

As technology is improved through learning, costs reduce, which will make advanced biofuels more competitive and available to consumers at a reasonable price.

What is delaying advanced biofuels from being commercially available?

Uncertainty around long term EU biofuel policy is stopping advanced biofuels from reaching their full potential. Biofuels for Europe believes that a stable policy environment is critical to fostering investment in new technologies.

In the EU there is currently a proposal for an indicative target for ‘advanced biofuels’ and ongoing discussions as to whether there should be targets beyond 2020[6]. Italy has already introduced legislation for a mandatory 0.6% sub-quota for advanced biofuels by 2018, 0.8% by 2020 and 1% by 2022[7].

With adequate incentives and ambitious but achievable decarbonisation targets for transport fuels post 2020, the EU could ensure advanced biofuel technologies and feedstocks are able to compete with fossil fuel and contribute to the transport sector’s GHG reduction targets for 2020 and beyond[8].

However, Biofuels for Europe would like to highlight that policies to promote new technology are difficult to design as a balance is needed between promoting new technologies and costs imposed on consumers. Different policy instruments have higher value at different stages of the innovation curve. So, ideally, policies should be able to adapt to changes in technology advances, economic climate, the availability of credit, and new knowledge regarding impacts.

What affects the cost of advanced biofuels?

Like other energy markets, the price will always be subject to market fluctuations, geographic variation, feedstock quality, volume and contract terms. Yet, Biofuels for Europe underlines some key factors that will determine whether or not biofuels can compete with gasoline and diesel. A key influence is the price of oil, but other factors such as high capital and feedstock costs are important also.

Many forms of advanced biofuels have the potential to be competitive with diesel and petrol on a volume basis once the technologies are developed to a large-scale and all of the products are monetised.

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How can costs be reduced?

For advanced biofuels, inexpensive feedstock could be waste from industry and households.

Low-cost feedstocks from existing industry, such as bagasse from the sugar cane industry in Brazil, or co-location where production of heat and power, ethanol, biogas and waste is possible, are available.

Biofuels for Europe underscores that research shows that advanced biofuels have the potential to reach cost parity with petroleum-based fuels in the medium term, which would lead to cheaper transport fuels. Technological improvements and increases in scale can drive down costs of production in 10-20 years in terms of US$ per litres of gasoline equivalent (Lge).