Chatham House report warns against expansion of UK biofuels

A London think tank study warned against expansion of biofuel use in the UK as the requirement rose to 5% by volume in transportation fuel on Apr. 15 and faced European pressure to increase further.

Expansion needed to meet two European Union directives raises problems of sustainability, warns a report by Rob Bailey, senior research fellow of the Energy, Environment, and Resources Department of Chatham House.

The current standards, according to Bailey, do not ensure biofuel use is sustainable. And biofuels are not a cost-effective means for reducing emissions from road transport.

Agricultural biofuel use increases the level and volatility of food prices, hurting low-income food-importing countries, Bailey explains. It also indirectly changes land use in ways that raise greenhouse gas emissions, possibly by enough to offset emissions savings from increased use of biofuels.

Bailey says biodiesel from waste products such as used cooking oil and tallow offers the greatest sustainability advantages, but the risk of indirect emissions increases at higher use.

And he points out that UK sustainability criteria address neither indirect land-use change nor food security.

“In the absence of such safeguards, increasing biofuel consumption could have significant environmental and social consequences outside the United Kingdom,” he says. “It is unclear whether such safeguards will be agreed at the EU level.”

UK, EU requirements

The UK mandates biofuel use through its Renewable Fuel Transportation Obligation (RFTO), applicable to suppliers of at least 450,000 l./year of fuel.

RFTO is the mechanism by which the UK plans to meet the two EU requirements. One of those is the Renewable Energy Directive, which requires countries to meet 10% of their transportation energy demand with renewable energy by 2020. The other is the Fuel Quality Directive, which requires a reduction in emissions intensity of transport fuels of at least 6% by 2020.

The two EU directives require that biofuels offer emissions reductions of at least 35% compared to conventional fossil fuels, rising to 50% in 2017 and 60% in 2018 for new refineries.

“Achieving these targets will require increasing UK biofuel use well beyond current levels,” Bailey says.

Because biofuels have lower energy densities than fossil fuels, a 10% biofuel requirement means volumetric targets of about 14% for ethanol in gasoline and 11% for biodiesel in diesel. Most recent UK data indicate ethanol volumes represented 4.1% of gasoline supplied and biodiesel volumes 1.6% of diesel, according to Bailey.

UK biofuel supply has been mainly biodiesel from used cooking oil and tallow and ethanol from corn, with ethanol recently overtaking biodiesel in market share.

Biofuel costs, consequences

Bailey calls current biofuels “an expensive means of reducing emissions from road transport.”

He estimates carbon-abatement costs, exclusive of emissions from indirect land-use change, at $165-1,100/tonne of carbon dioxide equivalent (CO2e).

“This compares unfavorably with an appraisal price of around $87/tonne,” he says.

When emissions from indirect land-use change are accounted for, abatement costs for agricultural biofuels increase to $330-8,500/tonne of CO2e, depending on the feedstock.

“Biodiesel from vegetable oils is found to be worse for the climate than fossil diesel,” Bailey says.

The cost to UK motorists of meeting the 5% biofuel target will be about $700 million in the current fiscal year. The cost in the UK to meet the EU requirements would be about $2 billion/year by 2020, according to Bailey.

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