Biofuels meet doubt

Sept. 24, 2007
Finally, the worldwide biofuels frenzy has encountered quasi-official doubt. Even better, the doubt emerged in a forum dedicated to sustainable development.

Finally, the worldwide biofuels frenzy has encountered quasi-official doubt. Even better, the doubt emerged in a forum dedicated to sustainable development.

“Biofuels: Is the Cure Worse than the Disease?” asks the title of a paper issued this month by the Round Table on Sustainable Development at the Organization for Economic Cooperation and Development (OECD), Paris. Attention to the question is overdue.

Countries around the world seem determined to join the US as it jumps over the biofuels cliff. The US government, of course, has installed a generous system of tax credits, tariffs, and sales mandates to expand markets for fuel ethanol and biodiesel. The supposed reasons are to extend supplies of vehicle fuel, moderate air pollution, and reduce emissions of greenhouse gases. The real reason is to enrich grain growers, distillers, and biodiesel makers.

Political motives behind the US biofuels push haven’t discouraged governments elsewhere, including Europe and China, from lavishing biofuels with incentives of their own. The US isn’t the only country in which agriculture exerts strong political force.

Support and promise

Richard Doornbosch and Ronald Steenblik, who wrote the OECD group’s paper, usefully relate government support to a reasonable assessment of biofuels’ promise. “Biofuels may well play a part in expanding the range of energy sources available in the future,” they write, noting that the role will depend largely on feedstock and production costs. “But in view of the fact that even the most optimistic studies posit no more than 13% of liquid fuel needs in 2050 being supplied by biofuels, it must be asked whether the diversion of such large amounts of public funds in support of this single technological option can be justified.”

The projection they cite comes from the International Energy Agency. The authors call it realistic but possibly optimistic. They note that conventional ethanol and biodiesel are considered technically able to expand their combined share of the market to 11% in 2050 from 1% in 2005. But such growth would have “significant impacts on the wider global economy,” including the elevation of food prices already in evidence.

Second-generation technologies, such as ethanol from cellulose, are considered technically able to meet 12% of liquid-fuel needs by 2050. But they depend on uncertain technical development and must overcome the costs of moving biomass to large production plants. “This leads some to believe that the second-generation biofuels will remain niche players, produced mainly in plants where the residue material is already available in situ, such as bagasse (cellulosic residue from sugarcane processing) and wood-process residues,” Doornbosch and Steenblik write.

The authors challenge environmental arguments made in support of biofuels. They cite land-use strains and increased fertilization associated with expanded production of biomass feedstocks. And they argue that substantial cuts in greenhouse-gas emissions come only from ethanol produced with sugarcane or as a byproduct of cellulose production and from biodiesel made from animal fat and used cooking oil.

The paper further challenges the efficiency of government policies encouraging and protecting domestic production of biofuels. Usage mandates or blending percentages and fuel-tax preferences usually don’t account for differences in environmental costs and benefits among various feedstocks and production methods. Those differences can be great, the paper notes, adding, “This implies that governments could end up supporting a fuel that is more expensive and has a higher negative environmental impact than its corresponding petroleum product.”

Costs high

As greenhouse-gas reducers and petroleum substitutes, biofuels are expensive, the authors say. They estimate the cost of reducing greenhouse-gas emissions through US subsidies of corn-base ethanol at “well over” $500/tonne of carbon dioxide equivalent avoided. And in terms of displacing fossil fuels, they say, “In most cases the use of biofuels roughly doubles the cost of transportation energy for consumers and taxpayers together.”

More withering words such as these fill the report’s 57 pages. They leave no doubt that the OECD’s Round Table on Sustainable Development judges the rush to biofuels to be environmentally and economically unsustainable. As evidence mounts of high costs and false promises, the craze should prove to be politically unsustainable as well.